Friday, 16 November, 2018

Canada-U.S. NAFTA talks could bump up against midnight deadline

Clock ticks down on potential Sunday NAFTA deadline NAFTA talks run up against deadline; U.S. tariffs remain tough issue
Laurie Berry | 01 October, 2018, 10:55

The U.S. and Canadian governments agreed to a deal that would allow greater access to Canada's dairy market and address concerns about potential auto tariffs just hours before a self-imposed midnight deadline, the officials said.

Though, one of the senior US administration officials who briefed reporters on background Sunday night described Canada's concessions on dairy as "a big win" for American farmers. Canada also appears ready to accept assurances that steel and aluminum tariffs that Trump has imposed will be lifted, though it remains unclear whether the taxes would be replaced by quotas that limit metal imports.

Negotiators - still apart on matters such as dispute resolution and a USA demand for more access to Canada's dairy markets - are also tackling the matter of American tariffs.

The almost 25-year-old NAFTA deal governs more than one-trillion us dollars in annual trade between the three countries.

Trump complained about the behavior of Canadian officials, and said he rejected a meeting with Prime Minister Justin Trudeau, although Trudeau's office said no meeting was planned.

President Donald Trump has said he wants to go ahead with a revamped NAFTA - with or without Canada.

One source briefed on the talks said negotiators were looking to imitate the provisions of the bilateral Mexico-U.S. deal on NAFTA.

"Lots of progress but we're not there yet", he said.

Under the deal signed with Mexico in August, 75 percent of auto content will be made in the United States or Mexico, up from the original threshold of 62.5 percent.

"They're moving towards closing the deal - it's really not a question of if, it's a question of when", said Daniel Ujczo, an Ohio-based worldwide trade lawyer at Dickinson Wright who represents large USA automakers and auto-parts manufacturers. "So it's either going to be the text goes in with Mexico and the US, or the text goes in with all three countries".

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The U.S. and Mexico held off on a plan to publish the full text of their deal on Friday as American and Canadian negotiators rushed to narrow differences.

Canada has until now insisted it would not give ground on its key demand for a robust, independent rules-based dispute resolution system for trade disagreements.

Canada had agreed to provide United States dairy farmers access to about 3.5 per cent of its approximately $16 billion annual domestic dairy market, the sources said, adding that the Canadian government is prepared to offer compensation to dairy farmers hurt by the deal.

Other top Mexican officials also welcomed the deal.

"It's a good day for Canada", Prime Minister Justin Trudeau said as he left his office. That is more than the 2 million units now exported.

So much American trade depends on the 1994 agreement that US markets have been jittery about a possible collapse of negotiations - and because Mr. Trump made campaign promises to get rid of the agreement.

USA dairy farmers are subsidized and create a huge oversupply of milk. "We're going to call it the US-Mexico Trade Agreement".

Lopez Obrador, whose transition team participated in the negotiations as observers, has however given his blessing to the new NAFTA - which will be called the United States-Mexico-Canada Agreement (USMCA).

Trump campaigned on a promise to rewrite NAFTA - or get rid of it. Talks on a rewrite began more than a year ago.

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