Sunday, 18 November, 2018

Canada reaches 11th-hour NAFTA deal with U.S., Mexico

Clock ticks down on potential Sunday NAFTA deadline Decision day dawns as intensive NAFTA effort nears U.S.-imposed deadline
Leonard Rios | 01 October, 2018, 12:59

The deal, which still has not been announced, comes after Prime Minister Justin Trudeau called a meeting with his Cabinet late Sunday after Canada and the US made substantial progress in free trade talks.

U.S. -Canada talks bogged down earlier this month, and most trade analysts expected the September 30 deadline to come and go without Canada being reinstated.

A special federal cabinet meeting was convened at 10 p.m. ET to discuss a trade accord that already includes Mexico, while an announcement was planned for 11 p.m.at the White House.

The trade impasse was overcome after both parties made some concessions, with Canada agreeing to grant U.S. farmers greater access to its dairy market and limit its automotive exports to the US.

Canada and the United States have reached a last-minute free trade deal to revamp the long-standing NAFTA pact between the two countries and Mexico.

A revised Nafta would be a landmark for Trump, who has called the current deal a "disaster" and vowed to reduce America's yawning trade deficit and revive manufacturing jobs.

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.

Some people familiar with the talks credited Trump senior adviser Jared Kushner for helping smooth the path toward a deal.

As part of any agreement, Canada looks set to offer increased access to its highly protected dairy market, as it did in separate pacts with the European Union and Pacific nations.

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In a big victory for his agenda to shake-up an era of global free trade that many associate with the signing of NAFTA in 1994, President Donald Trump coerced Canada and Mexico to accept more restrictive commerce with their main export partner. Trade officials on both sides rushed to hammer out differences before a Sunday midnight deadline.

A source within the administration told the Times that Canada and Mexico would receive "accommodations" if Trump imposes auto tariffs. The executives include two former Canadian ambassadors to the USA who now work for banks: Michael Wilson, chairman of Barclays Capital Canada Inc., and TD chairman Frank McKenna.

"We agreed to that", Lopez Obrador told reporters in Mexico City.

Canadian Prime Minister Justin Trudeau has said repeatedly that Chapter 19 is a "red line for Canadians" that can not be crossed.

But the US and Canada had trouble dealing with other areas in the pact, including Canada's dairy industry, its insistence on a strong dispute settlement mechanism and concerns about intellectual property and culture. That is more than the 2 million units now exported.

MacNaughton is flying back to Washington Sunday night, one official said. U.S. officials intend to sign the agreement with Canada and Mexico at the end of November, after which it would be submitted to the U.S. Congress for approval, a senior U.S. official said.

They had said a bilateral agreement would move forward without Canada, which had entered into tough negotiations with the United States in recent weeks.

Canada was left out when the USA and Mexico reached an agreement last month to revamp the North American Free Trade Agreement.

Reaching a pact with Canada allows the 24-year-old pact to remain trilateral and for the U.S.to check another box for its legislative process in the lead up to a congressional vote. "It provides no certainty for those Canadian businesses that hope to export tariff-free to the U.S. It provides no certainty for those who might invest in Canada".

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