NAFTA negotiations resume after Trudeau criticizes rule-breaker Donald Trump

Marcus Newton
September 8, 2018

Trump abruptly canceled an outing on Monday, a federal holiday in the USA, "to make calls specifically on trade and other worldwide issues", White House Press Secretary Sarah Huckabee Sanders said in an email.

Trump almost tore up the NAFTA pact a year ago after visiting farmers in Wisconsin, a major USA dairy producer that Washington says has been hurt by Canadian protectionism.

Canada rejoined the talks with the aim of reaching a three-way pact, but Canadian Foreign Minister Chrystia Freeland abruptly ended the last round of talks on Friday with no deal, after derogatory remarks by Trump about Canada were leaked.

With the "U.S. entertainment juggernaut" next door, Herman said Canada has little choice but to defend what he called a vitally important part of NAFTA.

But despite the public optimism, negotiators face a tough task ahead.

Trade experts say Canada and the U.S. need to present a text to the U.S. Congress by October 1 to join the deal the Trump administration signed with Mexico last week.

The talks to remake NAFTA resumed after hitting an impasse last week over 's high dairy tariffs and US moves to eliminate a dispute resolution system known as Chapter 19 that potentially favors Ottawa.

Toronto's main stock market and the Canadian dollar closed slightly lower Wednesday as investors again watched for signs of progress following a resumption of NAFTA talks by Canada and the United States. Justin Trudeau has seen the Canadian dollar fall on the back of the recently announced trade deal and the failure of the Liberal Government to negotiate a new deal.

The Canadian dollar strengthened against the greenback on Thursday, recovering from a almost seven-week low earlier in the day after a senior Bank of Canada official said the central bank had discussed the pace at which it could raise interest rates.

But Trudeau is also digging in and vowing that Canada won't be pressured into a deal.

Both Canadian and US negotiators insist they have been making progress.

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Canadian and US officials also face tough bargaining in any NAFTA end game.

The tone of the NAFTA renegotiation "has painted the USA as an antagonist that has to be handled", he says.

The North American auto industry is a sum of parts made and assembled in Mexico, the USA and Canada. But negotiators from all three countries have said they will continue to work toward a trilateral deal.

Derek Burney, who was former prime minister Brian Mulroney's chief of staff during the original 1988 Canada-U.S. free trade negotiations, said any direct impact was unlikely but Trump remained "the big wild card" in the negotiation. He told an Alberta radio station that Canada would insist on keeping a NAFTA provision for settling disputes "because that ensures that the rules are actually followed".

Freeland maintained the same upbeat tone she has held since arriving in Washington this week to reboot talks with the Trump administration. "That would not be good for Canada, it would not be good for our identity, it would not be good for our sovereignty".

Canada keeps strict import quotas on dairy products and applies steep tariffs on products coming in that exceed the quota.

After the U.S. and Mexico reached an agreement on new rules for auto trade, and tougher protections for workers and intellectual property, talks with Canada were hung up on the mechanisms used to resolve disputes among partners, and on Ottawa's strictly controlled dairy sector.

Overall, the NAFTA deal struck in 1994, has been good for United States dairy farmers because it opened up the market in Mexico.

USA and Canadian negotiators started a second day of talks aimed at rescuing NAFTA as the deadline for a deal this week, set out by Trump, inched closer.

Trump boasted about taking a hard line with Canada at the negotiating table, and has since threatened to cut America's northern neighbor out of a deal if it didn't cave to his demands.

President Donald Trump is threatening to move ahead on a deal that excludes Canada, but he also needs a win on trade ahead of midterm elections in November that will test his ability to keep control of Congress. She compared the trade negotiation to the advice a midwife gave her on giving birth: "You never knew for sure how many contractions it would take to give birth to your child but you knew that each contraction was one contraction closer to the end. The president can not pull America out of NAFTA without Congress' permission", Wyden said in a statement. "The president can not pull America out of NAFTA without Congress's permission", Wyden said.

Other reports by MaliBehiribAe

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