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NAFTA Talks to Continue as Trump Says They're on Track for Deal

Aug. 30, 2018
Canada's foreign minister sees spirit of compromise but ‘huge’ workload remains.

Talks to update NAFTA are edging toward their next deadline with signs of optimism from President Donald Trump and other key figures, as the U.S. and Canada push to resolve enough differences to trigger a countdown to sign a new deal.

Key U.S. and Canadian government figures met again Wednesday, book-ended by meetings of lower-level trade officials set to work through the night. Trump and Canadian Prime Minister Justin Trudeau signaled Wednesday an accord could be reached.

"We’re doing really well,” Trump told reporters at the White House. “They want to be part of the deal. And we gave till Friday and I think we’re probably on track.” Trudeau acknowledged the Friday deadline cited by Trump, said they were pushing toward it but will only sign the “right deal.”

The tone was distinctly more positive than a Monday news conference at the White House, where Trump called outgoing Mexican President Enrique Pena Nieto on speakerphone to announce a two-country deal to redo the North American Free Trade Agreement. He essentially urged Canada to take it or leave it, and threatened to apply new tariffs on Canadian auto exports otherwise.

Trump said again Wednesday it would be worse for Canada to not reach an accord.

Ministers Meet

The talks are being held in Washington, led by U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland. The pair met Wednesday and instructed officials to continue negotiations throughout the night, Freeland said. They will meet again Thursday.

Both countries have “a lot of goodwill” in negotiations, Freeland said. “We understand each other’s positions and what both sides need very, very well,” she said, adding: “This is a very intense moment in the negotiations, and we’re trying to get a lot of things done very quickly.”

The U.S. has stressed Friday’s deadline in its closed-door meetings with the Canadians, American officials familiar with the talks said after the first session Tuesday. The U.S. negotiators are showing a willingness to reach a deal, said two Canadian officials, speaking on condition of anonymity. But Trudeau did express caution.

“We’re seeing if we can get to the right place by Friday,” he said Wednesday. “We’re going to be thoughtful, constructive, creative around the table, but we are going to ensure that whatever deal gets agreed to is the right deal for Canada and the right deal for Canadians.”

Deadline Looms

The U.S. is pressuring Canada to strike a deal by week’s end, which is when the Trump administration hopes to inform Congress that it intends to sign a new trade pact to replace NAFTA. The U.S. is emphasizing the deadline, but there’s some wiggle room -- analysts have said they don’t necessarily need a full agreement by then, and Lighthizer has said he might be able to send a letter that leaves a door open to Canada joining

“I think there’s a really good chance” to get a “deal in principle” by Friday if both countries compromise, Bruce Heyman, a former U.S. ambassador to Canada, told Bloomberg Television on Wednesday. “What that means though is there’s a lot of blanks that will need to be filled in” quickly to meet congressional deadlines, he said.

Commerce Secretary Wilbur Ross said Tuesday it’s likely the deal will be voted on next year after American midterm elections in November.

‘Huge’ Work Left

Freeland has credited “significant” compromises from Mexico with clearing the way for a deal but said there is a “huge amount of work to do this week.” The Canadian dollar pared losses after some of Freeland’s comments.

Hurdles remain for Canada, although markets are betting an accord will be reached that includes Ottawa even as Trudeau’s political rivals begin to blame him for risking NAFTA’s collapse.

Two key issues for the U.S. and Canada are dairy and anti-dumping dispute panels. The U.S. wants to dismantle Canada’s dairy system and kill the panels; Canada has signaled it would compromise on dairy and wants to preserve the so-called Chapter 19 panels. “The Canadian view on Chapter 19 is well-known,” Freeland said late Wednesday.

There are warnings that U.S. trade law will prevent, or impede, Trump from forging ahead on a quick timeline with only a two-country accord, and key figures in Congress are calling for Canada to be included. Lighthizer has said he believes he can proceed without Canada. The Friday deadline would allow a signing before Mexico’s president-elect, Andres Manuel Lopez Obrador, takes office on Dec. 1.

By Josh Wingrove and Andrew Mayeda

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