U.S., Canada slug it out as deadline looms to clinch NAFTA

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Top U.S. and Canadian trade negotiators were set for a second day of talks on Thursday over a revised North American Free Trade Agreement after their subordinates worked late into the night to flesh out opportunities for a compromise deal.

Chrystia Freeland, Canada's foreign minister, returned to Washington on Tuesday for talks with U.S. Trade Representative Robert Lighthizer.

"It is very important to inform" Prime Minister Justin Trudeau in person about the latest developments, she added.

After her stop in Washington, Freeland is due to attend this week's meetings of the governing Liberal Party of Canada in Saskatoon, Saskatchewan.

Canada and the United States are attempting to put the final touch to a text that could be submitted to Congress at the end of the month and allow Canada to join the agreement signed by the administration Trump with Mexico.

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

The two sides have so far been unable to resolve their differences over USA access to the Canadian dairy market, a cultural exemption for Canada and the Chapter 19 dispute resolution mechanism.

After a meeting on Monday between US officials and EU Trade Commissioner Cecilia Malmstrom in Brussels, the Office of the US Trade Representative said they had made progress toward a partial deal. "There are nearly two dozen chapters closed" in the NAFTA deal including reducing red tape on cross-border trade, he said on Monday. Lighthizer said on Monday Mexico had agreed to cut the mechanism but Canada wants to keep dispute resolution in NAFTA.




He and other American politicians have long demanded Canada's system of domestic dairy protections either be abolished or heavily modified to give United States exports a bigger share. Canadian officials had said previously that they are working on the assumption that they have until the end of September to make a deal.

Trump has notified Congress he intends to sign the trade deal reached last week with Mexico by the end of November, and officials said the text would be published by around October 1.

Under that system, the US exports about $500 million of dairy products duty free to Canada - three times what it imports from here - but faces tariffs of up to 300 per cent for anything more.

"Even if we gave him everything he wanted - and there is no way we would ever do that - who can say whether he'd be satisfied?" said one source, who declined to be identified given the extreme sensitivity of the situation.

He also warned that the US and Mexico would move forward bilaterally without Canada.

"I think it's something that we obviously have to be aware the president is contemplating".

"There is no question Canada and Mexico are going to get a haircut and the best you can hope for when you get a haircut is that it looks stylish", Mr. Ujczo said.

"Our teams continued to work during the weekend".

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