Donald Trump and Justin Trudeau
Talks between Canada and the United States are intensifying as the two countries push to hammer out a deal on a revamped North American Free Trade Agreement by a Friday deadline, with both sides upbeat about the progress made so far.
Despite some contentious issues still on the table, the increasingly positive tone contrasted with U.S. President Donald Trump's harsh criticism of Canada in recent weeks, raising hopes that the year-long talks will conclude soon with a trilateral agreement.
Negotiations entered a crucial phase this week after the United States and Mexico announced a bilateral deal on Monday, paving the way for Canada to rejoin talks to salvage the 24-year-old accord that accounts for over $1 trillion in annual trade.
Trump has set a Friday deadline for the three countries to reach an agreement, which would allow Mexican President Enrique Pena Nieto to sign it before he leaves office at the end of November. Under U.S. law, Trump must wait 90 days before signing the pact.
Canada and United States are set to tackle their contentious issues in bilateral talks on Wednesday, as the two nations work to salvage the North American Free Trade Agreement amid signs Ottawa was open to taking a more conciliatory approach.After more than a year of talks, Mexico and the United States announced a bilateral deal on Monday, setting the stage for Canada to rejoin negotiations to modernize 24-year-old NAFTA which accounts for over $1 trillion in annual trade between the three nations.Canadian Foreign Minister Chrystia Freeland told reporters on Tuesday that Mexico's concessions on auto rules of origin and labour rights was a crucial breakthrough, clearing the way for Ottawa to resume talks with United States this week.Trump says 'big deal looking good with Mexico'After being sidelined from the talks for more than two months, Freeland will be under pressure to accept terms the United States and Mexico worked out. The U.S. Congress also wants a deal that includes Canada."The fact that agreement on those difficult issues for Mexico was able to be reached definitely clears the way for us to have significant, substantive, and I hope productive, conversations with the U.S. this week," Freeland said after a brief meeting with U.S. Trade Representative Robert Lighthizer.She dodged questions on what points Canada would be willing to concede on, noting that Ottawa's key issues are well known.Mexico-US NAFTA agreement close, but item still pending"We will, as we have done throughout this negotiation, stand up for the Canadian national interest and for Canadian values, while looking for areas where we can find a compromise that everyone can live with," she said.U.S. President Donald Trump warned he could proceed with a deal with Mexico alone and levy tariffs on Canada if it does not come on board with the revised trade terms.Despite the optimism, there are some sticking points. One of the issues for Canada in the revised deal is the U.S. effort to dump the Chapter 19 dispute resolution mechanism that hinders the United States from pursuing anti-dumping and anti-subsidy cases. Lighthizer said on Monday that Mexico had agreed to eliminate the mechanism.Mexico minister says trying to get NAFTA deal as soon as possibleOther hurdles include intellectual property rights and extensions of copyright protections to 75 years from 50, higher threshold than Canada has previously supported.But with even these hurdles, this is the closest the three nations have come to clinching a deal, and they race towards a Friday deadline to reach an in-principle deal."I think that what they probably need by Friday is some indication from Canada to the Americans that it's ready to play ball, that they're ready to negotiate in good faith," said Mark Warner, a trade lawyer with MAAW Law, which specialises in Canadian and U.S. law."If Chrystia Freeland goes down there and she starts going on and on about red lines again, then I think it's all over," he added.US tariffs to have negative impact on economy: Survey
Canada, US set for second day of NAFTA talks amid growing optimism
The U.S. president has warned he could try to proceed with a deal with Mexico alone and levy tariffs on Canadian-made cars if Ottawa does not come on board, although U.S. lawmakers have said ratifying a bilateral deal would not be easy.
Negotiators were expected to work through the night ahead of more talks on Thursday morning between Canada's lead negotiator, Foreign Minister Chrystia Freeland, and U.S. Trade Representative Robert Lighthizer.
Trump and Canadian Prime Minister Justin Trudeau expressed optimism on Wednesday about reaching an agreement by Friday, although much work remains on specific issues.
One sticking point for Canada is the U.S. effort to dump the Chapter 19 dispute-resolution mechanism that hinders the United States from pursuing anti-dumping and anti-subsidy cases. Lighthizer said on Monday that Mexico had agreed to eliminate the mechanism.
U.S. President Donald Trump on Monday suggested the United States and Mexico were close to a "big deal" on trade after days of negotiations between the two partners in the North American Free Trade Agreement."A big deal looking good with Mexico!" Trump wrote in a post on Twitter.The Mexican economy minister said on Monday that Mexican and U.S. officials were nearing an agreement on bilateral issues, but a major issue still needed to be settled. Mexico-US NAFTA agreement close, but item still pending
Trump says 'big deal looking good with Mexico'
"I think the Canadian view on Chapter 19 is well known," Freeland told reporters late on Wednesday after a day of talks. "This is a very intense moment in the negotiations. We're trying to get a lot of things done really quickly. I think it will be most effective if we keep our negotiations on specific issues to the negotiating table."
Ottawa is also ready to make concessions on Canada's protected dairy market in a bid to save the dispute-settlement system, the Globe and Mail reported on Tuesday. The dairy sector has repeatedly attracted Trump's fury.
That compromise is likely to upset Canadian dairy farmers, who have an outsized influence in Canadian politics, with their concentration in the vote-rich provinces of Ontario and Quebec.
"Ultimately, we've got huge issues that are still to be resolved," said Jerry Dias, head of Canada's influential Unifor labor union. "Either we're going to be trading partners or we're going to fight."