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Chamber of Commerce CEO Tom Donohue says pulling out of NAFTA would mean 'absolute destruction' for the economy

  • Chamber of Commerce CEO Tom Donohue says pulling out of NAFTA would mean "absolute destruction" for the economy.
  • NAFTA keeps American borders safe, Donohue says.
  • Eliminating NAFTA could affect millions of American jobs.

The head of the U.S. Chamber of Commerce said Wednesday that NAFTA is a vital part of the U.S. economy, and scrapping it would be a mistake.

"To pull out of NAFTA would be an absolute destruction to the advances we've made on the economy and economic growth," Tom Donohue said on CNBC's "Squawk Alley."

"We can't do that. We can improve it. We can change it. But we can't get out of it. We can't destroy it," he said.

President Donald Trump has repeatedly threatened to pull the plug on the North American Free Trade Agreement. Negotiations enter a sixth round on Jan. 23 in Montreal, leaving many wondering about the future of the deal with Mexico and Canada.

On Monday, Trump told the American Farm Bureau Federation's convention that changes to NAFTA could hurt farmers.

"Think about it: When Mexico is making all of that money, when Canada is making all of that money, it's not the easiest negotiation," Trump said. "But we're going to make it fair for you people again."

But Donohue, whose organization bills itself as world's largest business group, representing more than 3 million businesses, said he believes Trump understands the importance of the agreement.

"The bottom line is growth will be weakened, not strengthened or sustained, if we pull back from trade," he said.

Before his appearance on CNBC, Donohue stressed the importance of NAFTA in his annual State of American Business speech in Washington. In his speech, Donohue also warned about a growing backlash against technology.

Donohue told CNBC that progress is being made on NAFTA and in trade talks with South Korea.

He said the 24-year-old NAFTA pact helps secure America's borders and that it affects 14 million American jobs and involves about $1.3 trillion in trade.

"It's a program that keeps us safe within on our borders because of the people we're in a trading arrangement with," he said.