US, Canada agreement on NAFTA 2.0 appears to be in reach


WASHINGTON, Aug 30, 2018 (BSS/AFP) – A deal on an overhaul of the North
American Free Trade Agreement appears to be within reach, as Canada and the
United States were set to continue negotiations Thursday aimed at getting the
pact done by the end of the week.

The two sides will resume their talks with a face-to-face between Canada’s
Foreign Minister 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 a deal was close.

The White House plans to notify Congress on Friday 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 December 1, when Mexico
will install a new president.

But that will mean compromises on both sides on issues that have created
friction between the neighboring countries, notably Canada’s dairy trade
rules and mechanisms to settle disputes, as the leaders each try to claim

“I think they’re going really well,” Trump said of the Canada talks, which
are “probably on track” to meet the Friday deadline.

“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 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. But “no NAFTA deal is better than a bad NAFTA deal.”

Mexico paved the way by agreeing to a NAFTA 2.0 with the United States on

“Our officials are meeting now, and we’ll be meeting until very late in the
night,” Canada’s Foreign Minister Chrystia Freeland told reporters Wednesday.
“We have agreed at the ministerial level, we will reconvene to review the
work of officials overnight tomorrow morning.”

But 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.”

– ‘High-level’ agreement –
If the White House notifies Congress by Friday, it then would have until
September 30 to submit the final NAFTA agreement.

The sticking points between Ottawa and Washington likely will center on
Canada’s managed dairy market and how to handle some disputes among NAFTA

Negotiators have worked for a year to update and rewrite the 25-year-old
free trade pact. But in the last five weeks, Washington and Mexico City held
talks to resolve their bilateral issues, especially on the auto industry
rules, without Ottawa.

While critics said Canada had been frozen out, Freeland has repeatedly
stressed that she remained in close touch with her US and Mexican
counterparts throughout the summer and had already achieved “a high-level
agreement with the US” on some the pending issues on autos and labor rights.

She also has met this week with her Mexican counterparts, who remained in
Washington after announcing the breakthrough with the United States.

Freeland praised Mexico’s willingness to make difficult concessions on auto
trade and labor issues, which helped pave the way for a three-party

The “significant compromises that Mexico was prepared to make to support
Canadian workers …set the stage for very intensive conversations” to
conclude NAFTA.

The new NAFTA includes a higher percentage of locally-produced components
in autos, 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.

But 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.