A deal on an overhaul of the North American Free Trade Agreement (NAFTA) appears to be within reach, as Canada and the US were to continue negotiations yesterday aimed at getting the pact done by the end of the week.
The two sides were to resume their talks with a face-to-face between Canadian Minister of Foreign Affairs Chrystia Freeland and US Trade Representative Robert Lighthizer as they seek a breakthrough.
Despite US President Donald Trump’s threats to leave Canada on the sidelines after announcing a breakthrough with Mexico on Monday, Trump and Canadian Prime Minister Justin Trudeau expressed optimism that a deal was close.
The White House today plans to notify the US Congress of its intention to enter into a new free-trade agreement, to provide the required 90 days’ notice that would allow NAFTA 2.0 to be signed by Dec. 1, when Mexico is to install a new president.
However, that would mean compromises on both sides on issues that have created friction between the two, notably Canada’s dairy trade rules and mechanisms to settle disputes.
“I think they’re going really well,” Trump said of the Canada talks, which are “probably on track” to meet the deadline today.
“I think Canada very much wants to make the deal,” he said, but again raised the possibility of doing a separate deal with Mexico.
The crucial phase of talks began on Tuesday continuing late into the night, and Trudeau expressed optimism the countries could reach agreement by the end of the week.
“There is a possibility of getting to a good deal for Canada by Friday,” Trudeau said.
However, “no NAFTA deal is better than a bad NAFTA deal,” he said.
Mexico on Monday paved the way by agreeing to a NAFTA 2.0 with the US.
“Our officials are meeting now and we’ll be meeting until very late in the night,” Freeland told reporters on Wednesday. “We have agreed at the ministerial level, we will reconvene to review the work of officials overnight tomorrow morning.”
She declined to comment on the state of the talks, saying: “Given the extreme intensity and the very fast pace of this conversation, we are not going to conduct our negotiation in public.”
If the White House notifies Congress by today, it then would have until Sept. 30 to submit the final NAFTA agreement.
The new NAFTA includes a higher percentage of locally produced components in automobiles, a requirement that a percentage of vehicles must come from high-wage factories, tougher worker protections and a provision to review the 16-year deal every six years.
Trudeau vowed not to give in to Washington’s demands to alter the system under which Ottawa sets dairy production quotas and prices, with steep tariffs on imports.
However, Ottawa could offer US dairy farmers a small increase in market share as it did with the EU in a free-trade pact last year, in exchange for US concessions on the NAFTA chapter on dispute resolution.
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