NAFTA DEAL IMMINENT, INSIDERS SAY
KUSHNER CREDITED WITH KEEPING IMPERILLED TALKS GOING, TARIFFS STILL STICKING POINT
The Trump administration was growing confident Sunday night that a trade deal with Canada was imminent and that a trilateral NAFTA agreement would be published before the midnight deadline, five people familiar with the matter said.
The two sides were discussing the last sticking points at press time, including greater market access for U.S. supplies into Canada’s dairy market, according to the people, who spoke on the condition of anonymity because the discussion are private.
Canada’s ambassador to Washington, David Macnaughton, echoed the sentiment early Sunday evening, saying talks are moving forward but not yet completed.
“Lots of progress but we’re not there yet,” Macnaughton told reporters in Ottawa, where the Canadian team is gathered. He said he didn’t know if a deal would be reached Sunday.
U.S. and Canadian negotiators were negotiating around the clock this weekend to make a midnight deadline that would allow the countries to sign the deal as the final act before Mexico’s outgoing President Enrique Pena Nieto leaves office.
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.
Several people familiar with the talks credited Trump senior adviser Jared Kushner for helping smooth the path toward a deal. When it looked like negotiations had stalled or broken down due to friction between the U.S. and Canadian sides, Kushner kept talks going with aides close to Prime Minister Justin Trudeau, including Gerald Butts and Katie Telford, three people said.
U.S. lawmakers and businesses have urged the administration to keep Canada in the deal but the trilateral nature had been in jeopardy after President Donald Trump on Aug. 27 announced he reached a deal with Mexico that Canada could join if it’s willing to make concessions. They agreed to publish the text by the end of September.
Central to the discussions Sunday has been an effort to secure some sort of assurances that will allow Canada to avoid the dreaded Section 232 tariffs on steel, aluminum and auto exports, which U.S. President Donald Trump has either threatened or already imposed on national security grounds.
“They’re moving toward closing the deal — it’s really not a question of if, it’s a question of when,” said Daniel Ujczo, an Ohiobased international trade lawyer at Dickinson Wright who represents large U.S. automakers and auto-parts manufacturers.
“There’s just a lot going on, and not a lot of time to do it in. … At the end of the day, U.S. negotiators are agreeing, but it still has to be the president that signs off, and who knows where he is on things.”
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.
Ujczo said while Canada would rather have tariff protection spelled out when the deal is announced, he expects
THERE’S JUST A LOT GOING ON, AND NOT A LOT OF TIME TO DO IT IN
that as a compromise, all three countries will say they plan to meet again in the near future to hammer out the details of a détente on the tariff threat.
Trump, who has already imposed tariffs on Canadian steel and aluminum, has also repeatedly threatened to impose even more crippling levies on auto imports if a deal can’t get done.
Ultimately, Ujczo said he expects Canada and the U.S. to reach a so-called “side letter” to the main deal that would resemble a similar agreement reached last month between Mexico and the U.S., which preserves duty-free access to the U.S. market for vehicles that comply with the agreement’s rules of origin.
Those rules require that a certain percentage of an imported vehicle’s components be manufactured in the United States.
Ujczo said the two sides have also largely settled on a dispute-resolution mechanism similar to that in the original NAFTA known as Chapter 19 — an issue that has long been a major stumbling block in the talks — and on a higher duty-free threshold for goods shipped into Canada: $100, up from $20.
Despite the fact it’s one of Trump’s favourite talking points, the politically sensitive question of greater U.S. access to Canada’s dairy market is also no longer a hurdle, say sources familiar with the talks.