Published: Sat, September 08, 2018
Finance | By Kristine Clayton

Canada braves Trump’s threats and insults in hopes of closing NAFTA deal

Canada braves Trump’s threats and insults in hopes of closing NAFTA deal

Some of the United States' 40,000 dairy farmers say they have also been hurt this year by tariffs imposed by China and Mexico in retaliation to those imposed by President Trump on imports of steel and aluminum.

NAFTA's Chapter 19 allows companies who feel wronged by anti-dumping, or countervailing duties, to have their issues settled by independent panels of experts from the countries caught in the dispute.

But for Canada there is no urgency, Leblond said.

Freeland expressed optimism late Wednesday.

"We will not sign a deal that is bad for Canadians, and quiet frankly, not having a Chapter 19 to ensure the rules are followed would be bad for Canadians", he said.

The tone of the NAFTA renegotiation "has painted the USA as an antagonist that has to be handled", he says.

The two sides are also arguing over U.S. demands for more access to Canada's closed dairy market.

While the Trudeau government has rejected Trump administration criticisms of Canada's high tariffs on dairy products, it has not explicitly stated that supply management - now a hot-button issue on Canada's political scene - is non-negotiable.

US officials did not comment after Wednesday's meeting, which came after Trump said he was willing to dump Canada from the $1.2 trillion three-country trade pact after he reached agreement with Mexico last week.

"It's not going to be the deal-breaker", he said.

Trump abruptly canceled an outing on Monday, a federal holiday in the US, "to make calls specifically on trade and other global issues", White House Press Secretary Sarah Huckabee Sanders said in an email.

Yet there were few signs that a deal was near, and comments by Canadian Prime Minister Justin Trudeau on Tuesday indicated there would be little compromise from Ottawa on its red-line issues.

The bank noted the strength of the US economy, a factor of huge significance to Canada, which sends 75 percent of its goods exports to the United States.

The White House notified Congress on Friday of its "intent to sign a trade agreement with Mexico - and Canada, if it is willing - 90 days from now".

Post-NAFTA, Canadians may dream they can rely on the Canada-U.

Canada and the U.S. need to present a text to the U.S. Congress by October 1 in order to join the deal the Trump administration signed with Mexico last week.

Benjamin Reitzes of BMO Capital Markets wrote in a note to clients that Wednesday's statement makes it clear the NAFTA talks are biggest issue for markets and the Bank of Canada at the moment.

Overall, the NAFTA deal struck in 1994, has been good for USA dairy farmers because it opened up the market in Mexico.

The notice had to be sent Friday for Mexico's outgoing government to sign the new deal before it leaves office December 1.

But with the economic fate of workers and industries in three North American countries hanging in the balance, the New York Times piece sparked questions about how the fallout would affect the bump-and-grind of the NAFTA negotiations.

He said on Twitter that "there is no political necessity to keep Canada in the new NAFTA deal".

Faced with an unpredictable US president ready to strike on Twitter, Trudeau said the dispute resolution mechanism in Chapter 19 ensures trade rules are followed.

"I think that it's not necessarily a disaster", she said.

"[Canada] and other countries have been taking advantage of the United States for many years and this is the president that has stopped it", Trump told reporters.

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