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Friday, 31 August 2018

U.S. and Canada make late-night push for NAFTA. No deal yet


Top NAFTA negotiators from Canada and the
United States wrapped up a third day
of two-way talks on Thursday,
agreeing to meet the next day to
resolve final differences before a
deadline, with Mexican counterparts
on standby to rejoin negotiations.
Despite some contentious issues still
on the table, the increasingly positive
tone contrasted with U.S. President
Donald Trump’s harsh criticism of
Canada in recent weeks, raising hopes
the year-long talks to revamp the
North American Free Trade
Agreement (NAFTA) will conclude
soon with a trilateral deal.
“Canada’s going to make a deal at
some point. It may be by Friday or it
may be within a period of time,” U.S.
President Donald Trump told
Bloomberg Television. “I think we’re
close to a deal.”
Negotiations entered a crucial phase
this week after the United States and
Mexico announced a two-way deal on
Monday, setting auto content rules
and paving the way for Canada to
rejoin talks to modernize the 1994
accord that underpins annual trade of
more than $1 trillion.
Three-way talks were already
underway at the technical level and
Mexican Economy Minister Ildefonso
Guajardo was expected to soon rejoin
talks with U.S. Trade Representative
Robert Lighthizer and Canadian
Foreign Minister Chrystia Freeland,
people familiar with the process said.
There was no deal yet, said Freeland,
who briefed reporters at the end of
Thursday’s talks. “I had a brief
conversation with Ambassador
Lighthizer and his team. I had a
couple of things to say and we’ll
reconvene in the morning.”
Earlier Freeland said she had a “long,
intensive conversation” with
Lighthizer.
“We covered a lot of ground,” she
added. “The atmosphere remains
constructive. There’s a lot of
goodwill.”
Financial markets in U.S., Canada and
Mexico have broadly risen this week
on expectations of a new NAFTA deal.
The NAFTA deal taking shape is likely
to strengthen North America as a
manufacturing base by making it
more costly for automakers to import
a large share of vehicle parts from
outside.

The automotive content provisions,
the most contentious, could speed a
shift of parts-making away from
China.
A new chapter governing the digital
economy, along with stronger
intellectual property, labor and
environmental standards could also
benefit U.S. companies, helping Trump
fulfill his campaign promise of more
American jobs.
Trump has set a Friday deadline for
an agreement by the three countries,
which would allow Mexican President
Enrique Pena Nieto to sign it before
he leaves office at the end of
November. U.S. law requires Trump to
wait 90 days to sign.
The U.S. president has warned he
could try to proceed with a deal with
Mexico alone and levy tariffs on
Canadian-made cars if Ottawa does
not come on board, although U.S.
lawmakers have said ratifying a
bilateral deal would not be easy.

DAIRY, DISPUTE SETTLEMENT

Jim Carr, Canada’s minister for
international trade diversification,
who is not directly involved in the
NAFTA talks, said there were risks to
all if a deal were not reached because
the economies have been dependent
on one another for so long.
“There is a risk for everybody, and I
think all the nations are aware of that,
and that’s why we’re working literally
around the clock to do whatever is
possible to get the right deal, not any
deal, but the right deal for all three
countries,” Carr told Reuters in
Singapore on the sidelines of a
regional conference.
One sticking point for Canada is the
U.S. effort to dump the Chapter 19
dispute-resolution mechanism that
hinders the United States from
pursuing anti-dumping and anti-
subsidy cases. Lighthizer said on
Monday that Mexico had agreed to
eliminate the mechanism.
Trump also wants a NAFTA deal that
scraps dairy tariffs of up to 300
percent he argues are hurting U.S.
farmers, an important political base
for Republicans.
But any concession to Washington by
Ottawa is likely to upset Canadian
dairy farmers, who wield outsized
influence in politics, with
concentrations in the provinces of
Ontario and Quebec.
“Ultimately, we’ve got huge issues
that are still to be resolved,” said
Jerry Dias, head of Canada’s
influential Unifor labor union. “Either
we’re going to be trading partners or
we’re going to fight.”

Culled from Reuters

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