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Optimism mounts for an imminent NAFTA deal

01 October 2018

The administration of U.S. President Donald Trump said Canada must sign onto the text of the updated North American Free Trade Agreement by midnight EDT on Sunday (0400 GMT Monday) or face exclusion from the trilateral pact, which includes Mexico.

In an eyebrow-raising news conference Wednesday at the UN, Trump hinted at personal animus between Lighthizer and Freeland when he claimed that he rejected a Canadian request for a face-to-face meeting with Prime Minister Justin Trudeau, a request Ottawa flatly denied making.

The United States and Mexico want to push their deal through their respective legislatures before Mexican President-elect Andres Manuel Lopez Obrador takes office on December 1.

Some U.S. Democratic lawmakers said on Thursday they could not support a NAFTA deal without Canada.

A spokesperson for Trudeau told CTV News that "no meeting was requested. I must be honest with you, we're not getting along at all with their negotiators", Trump said.

"So far.so good. We will see if we can get there by 6 p.m.", he said, adding they have "pretty much" made deal on the Chapter 19 dispute settlement mechanism and USA dairy access but are still struggling with seeking an exemption from the Trump administration's invoking national security laws to hike tariffs on Canadian steel and aluminum.

The United States and Mexico Friday delayed the scheduled release of the text of a U.S. -Mexico trade deal with negotiators reporting progress on convincing Canada to join the accord before the expiration of an end-of-weekend deadline.

"We are in a very tough negotiation with the United States over NAFTA. there is no deadline on this".

Ottawa is also seeking assurances that the United States will not, after signing a new NAFTA deal, turn around and hit Canada with punitive auto tariffs.

Several Democrats questioned whether the Trump administration has the legal authority to proceed with a Mexico-only deal when prior notifications under the "fast-track" trade negotiating authority law were for a trilateral deal including both Mexico and Canada.

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So, what concessions are being made by the United States in efforts to settle the NAFTA deal?

Most news reports say the issues that are outstanding can be breached and there is an optimistic tone, so there could be an opportunity to buy the Canadian dollar if liquidity is ample and if it hasn't moved to far.

On top of that, Canada's 270 per cent tariffs on dairy products that exceed the established quota have long left a sour taste in the president's mouth. -Mexican deal or Washington and Ottawa could reach their own bilateral arrangement, according to trade experts.

Trump blames NAFTA for causing USA manufacturing jobs to move to low-wage Mexico and is demanding major changes.

Speaking separately, Canada's ambassador to Washington said that on a scale of 1 to 10, the chances of an agreement by the September 30 deadline were 5.

"In the next 48 hours, we will know if we are going to a text trilateral", added the minister.

The U.S. -Mexico deal would increase to 75 percent from 62.5 percent the share of each vehicle that must be produced in the United States to qualify for duty-free treatment.

But a Mexican source close to the talks said the United States had in turn agreed to drop a demand for tariffs to protect US seasonal produce growers.

One big uncertain question for USA and foreign automakers is whether US tariffs on Canadian steel will be lifted.

The president - to say nothing of everyone else in the U.S. capital - has likely been seized all week by the riveting testimony this week out of the Senate Justice Committee, which heard details of the allegations of sexual assault against U.S. Supreme Court nominee Brett Kavanaugh.

Optimism mounts for an imminent NAFTA deal