Trump, Justin Trudeau Had "Constructive Conversation" On Trade: Canada

Muriel Colon
September 1, 2018

The U.S. and Mexico have apparently agreed that 75 per cent of the content of cars sold must come from the U.S. or Mexico.

Canadian Prime Minister Justin Trudeau stressed in a phone call with Trump that the aim is to reach a new NAFTA deal.

To get to a deal, Canada is under pressure from the compromise on key issues - from opening access to its protected dairy sector, to getting rid of NAFTA's dispute settlement system, to introducing a clause that would call for the deal to be renegotiated again every 16 years.

"Some positions have moved since the last time we met face to face and we'll be looking closely at what those changes are and what they mean for Canada", said Freeland, who credited Mexico for making "tough decisions" to compromise on labour as part of its auto rules of origin talks with the U.S.

"Given the encouraging announcement today of further bilateral progress between the USA and Mexico, Minister Freeland will travel to Washington, D.C., tomorrow to continue negotiations", her spokesman said.

Freeland has credited the Mexicans for their hard decision to compromise on labour and wages as part of its auto rules of origin talks with the US, saying it has cleared the way for more substantive talks between Washington and Ottawa.

Canada's Foreign Minister, Freeland, released a statement prior to the USMTA news noting: "Canada is encouraged by the continued optimism shown by our negotiating partners. We've been, "Oh, at the eleventh hour something critical is going to happen on the NAFTA" and (then) it's like, "Oh no, not so much" and it goes back and resembles a normal trade negotiation". Canada can sign on up until that ratification, which could be at the end of November. "Well guess what? Good news for Canada".

American officials from the president on down have issued the warning repeatedly in recent days: Canada must agree to a revamped NAFTA deal by Friday or miss out on a crucial window of opportunity.

"Absolutely, the Friday deadline is a real thing. and we hope that Canada will be part of that", Hassett said.

When a US president intends to sign a trade deal with another country, he has to notify Congress in 90 days, and then Congress must approve it. "But I think we'll give them a chance to probably have a separate deal".

But Canada is a dominant exporter of crude oil to the United States: It accounts for 47 percent of the barrels imported to the United States, according to the U.S. Census Bureau.

But any agreement "will hinge on whether or not there is ultimately a good deal for Canada", Trudeau said at a student rally in northern Ontario. The trip included meetings with business officials to persuade them to invest in Nebraska in the future, as other companies in Canada and Europe have done after some of the governor's previous trade missions.

The administration wants Congress to approve at least $25 billion to build a wall on the U.S. -Mexico border.

On Tuesday, Trump's chief economic adviser, Larry Kudlow, warned that if the unable to strike a trade deal with Canada to include it in the NAFTA replacement, the president may consider imposing another round of tariffs on automobile imports.

Two key issues for the USA and Canada are dairy and anti-dumping dispute panels.

One of the criticisms of the 24 year-old North American Free Trade Agreement was that it no longer applies to the economy as it exists today. "The appearance of Canada as an irrelevant after-thought in NAFTA is a USA frame designed exclusively to wrestle concessions from the Canadian side", says Adam Taylor. On Monday, he suggested that the parties might be close to a new framework after more than a year of negotiations. Trump himself has avoided directly calling for the dismantling of supply management during his frequent attacks on Canadian dairy, including during Monday's announcement with Mexico.

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