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Home / World / USA, Canada presses NAFTA late at night; No deal yet

USA, Canada presses NAFTA late at night; No deal yet



WASHINGTON (Reuters) – Top NAFTA Negotiators from Canada and the United States held a three-day dialogue on Thursday, agreeing to resolve the last differences before an appointment with Mexican counterparts to resume negotiations the following day.

Despite some contentious issues still on the table, the increasingly positive tone contrasted with US President Donald Trump's sharp criticism of Canada over the past few weeks and hoped to conclude the year-long talks on reshaping the North American Free Trade Agreement (NAFTA) soon with a trilateral agreement.

"Canada will eventually make a deal, it could be until Friday or it could be within a certain time," said US President Donald Trump to Bloomberg Television. "I think we are close to an agreement."

Negotiations entered a crucial phase this week after the United States and Mexico announced a mutual agreement on Monday, setting the rules for the auto sector and paving the way for Canada to modernize the 1

994 agreement, which regulates annual trade underpinned by more than 1 trillion dollars.

On a technical level, talks have already been held on three levels, and Mexican Secretary of Commerce Ildefonso Guajardo should soon reunite with US Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland.

There was no deal yet, said Freeland, who briefed the reporters at the end of the talks on Thursday. "I had a quick chat with Ambassador Lighthizer and his team, I had some things to say and we'll meet again in the morning."

Freeland earlier said she had a "long, intense conversation" with Lighthizer.

"We covered a lot of ground," she added. "The atmosphere remains constructive and there is a lot of goodwill."

Financial markets in the US, Canada and Mexico have risen sharply this week due to the expectations of a new NAFTA agreement.

The developing NAFTA deal is likely to bolster North America's manufacturing base by making it more expensive for automakers to import a large portion of their vehicle parts externally.

The most controversial automotive regulations could accelerate a shift in parts manufacturing from China.

A new chapter governing the digital economy, along with stronger intellectual property, labor, and environmental rights, could also benefit US companies and help Trump fulfill his campaign promise for American jobs.

Trump has set a Friday deadline for an agreement between the three countries that would allow Mexican President Enrique Pena Nieto to sign him before he leaves office at the end of November. Under US law, Trump must wait 90 days to sign.

The US president has warned he might try to proceed with an agreement with Mexico alone and levy tariffs on Canadian-made cars if Ottawa does not come aboard, even though US legislators do not consider the ratification of a bilateral agreement just explained.

MILK, DISPUTE

One issue in Canada is the United States' attempt to abandon the Chapter 19 dispute settlement mechanism that prevents the United States from prosecuting anti-dumping and anti-subsidy cases. Lighthizer said on Monday that Mexico has agreed to eliminate the mechanism.

Trump also wants a NAFTA deal that drops milk tariffs of up to 300 percent. He argues that he harms US farmers, an important political base for Republicans.

But any concession from Ottawa to Washington could shake the Canadian dairy farmers, who exert excessive influence in politics, with concentrations in the provinces of Ontario and Quebec.

"Ultimately, we have big issues that still need to be resolved," said Jerry Dias, head of influential Canadian union Unifor. "Either we will be trading partners or we will fight."

FILE PHOTO: Flags of the USA, Canada, and Mexico are flying together in Detroit, Michigan, USA, on August 29, 2018. REUTERS Rebecca Cook

Reporting by Julie Gordon and Sharay Angulo; Writing by Denny Thomas and David Lawder; Editing by Lisa Shumaker and Clarence Fernandez

Our Standards: The Thomson Reuters Trust Principles.

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