With little time left ahead of a deadline to agree to a renewed NAFTA, Canadian and us trade officials on Sunday tried to settle differences on tough issues such as protection against American tariffs.
Chevrolet Equinox SUVs are parked awaiting shipment by CN Rail next to the General Motors Co (GM) CAMI assembly plant in Ingersoll, Ontario, Canada October 13, 2017.
The United States and Canada have agreed on a trade deal that would save the North American Free Trade Agreement (Nafta) as a trilateral bloc, according to three people familiar with the matter.
Pickup trucks built in both countries will be exempted entirely, the side-letter said. Canada, the United States' No. 2 trading partner, was left out when the USA and Mexico reached an agreement last month to revamp the North American Free Trade Agreement. The quotas are significantly above existing production volumes in each country, allowing for some export growth.
Mexican officials hailed a new North American trade accord Sunday as the United States and Canada announced they had reached an agreement to keep a three-country deal and rename the 24-year-old NAFTA.
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. "Lots of progress but we're not there yet", MacNaughton told reporters in Ottawa, where the Canadian team is gathered.
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.
Informed sources told The New York Times that Canada will now ease protections on its dairy market and provide access that is similar to what the United States would have gained through the Trans-Pacific Partnership, a trade treaty that Trump withdrew from previous year.
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Mexico agreed to remove NAFTA's Chapter 19, a dispute resolution mechanism for anti-dumping matters, which put Canada in a hard position. "It's either going to be the text goes in with Mexico and the US, or the text goes in with all three countries". Washington has already reached a bilateral deal with Mexico, the third NAFTA member.
Trudeau fired back: "We won't sign a bad deal for Canada".
Insiders got wind of a breakthrough just hours before USA and Mexican trade authorities were set to publish their own trade agreement without Canada as a signatory. However, they would also upend North American supply chains and complicate life for US companies.
Both Ujczo and Hassan Yussuff, the head of the Canadian Labour Congress and a member of the federal government's NAFTA advisory council who was also briefed on the talks Sunday, say the question of how to deal with the 232 tariffs remains the central issue.
The original NAFTA pact, signed by the United States, Canada, and Mexico, entered into force on January 1, 1994.
The pact underpins some $1.2 trillion in annual trade.
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. That is more than the 2 million units now exported.
Even Trudeau has been pulled into the fray: on what's usually a personal day for the prime minister, his itinerary said he'd be spending Sunday in "private meetings" and he was seen entering his office early Sunday evening. Talks to revamp NAFTA began in August a year ago.