PM chides Trump: He ‘doesn’t always follow the rules’

Trudeau changes his tone, calling NAFTA cultural exemption a key sticking point

WASHINGTON—Mexico and the U.S. hinted Wednesday that a NAFTA deal was possible within days — even as Prime Minister Justin Trudeau dug in on his key demands and criticized President Donald Trump as a breaker of trade rules.

Trudeau, who has usually taken pains to avoid direct shots at Trump over NAFTA, argued that Trump’s behaviour makes it especially important for Canada that any deal include an independent dispute resolution system.

“We need to keep the Chapter 19 dispute resolution because that ensures that the rules are actually followed. And we know we have a president who doesn’t always follow the rules as they’re laid out,” Trudeau told Edmonton's 630 CHED radio.

Trump did not respond directly. He suggested that he was optimistic about the talks, hinting that there could be a deal by the weekend.

“A lot of people are saying, ‘How are you doing with Canada?’ We’ll let you know. We should know over the next two or three days. Maybe even today.

But you will be the first to know,” Trump said at the White House.

Trump added, though, that it would be fine for the U.S. and “won’t be fine for Canada” if no deal were reached. Mexican chief negotiator Kenneth Smith Ramos told an aluminum industry event in Mexico that he hoped Canada and the U.S. would come to an accord by Friday or Saturday. He repeated the statement on Twitter.

Caution is warranted. Several previous eruptions of deal-is-near optimism over the past year have not been followed by a deal, and the Canadian government was unwilling to offer a prediction on Wednesday.

Foreign Affairs Minister Chrystia Freeland said the day’s talks had been constructive.

But Freeland declined to say how close the two sides were.

She said she would return to the table on Thursday morning after lower-level officials worked into the evening and “probably late into the night.”

“We are making good progress. We continue to get a deeper and deeper understanding of the concerns on both sides,” Freeland said after her second meeting of the day with U.S. Trade Representative Robert Lighthizer and other U.S. officials in Washington.

Trump said the U.S. has a “very strong position” in the talks with Canada. He argued that Canada and other countries “have been taking advantage of the United States for many years.”

“We’re really, right now, in very intense negotiations … with Canada. We’ll see how it works out. And if it doesn’t work out, that’s going to be fine for the country, for our country. It won’t be fine for Canada. But we love Canada. They’re our next-door neighbour. We’ve had a great relationship with them for many, many years,” Trump told reporters at a meeting with the emir of Kuwait.

Any Canada-U.S. agreement would not be the end of the process. Smith Ramos said Mexico would have to rejoin the talks at least briefly to complete a three-country deal. And any formal agreement would not be final until approved by the three countries’ legislatures — including the U.S. Congress, which has sometimes taken four years or more to vote on trade deals reached by the president. Trump seemed enthused about the possibility of a deal, telling reporters that he had come up with a new name to replace the North American Free Trade Agreement he dislikes. Trudeau called the Chapter 19 system one of his “red lines.” The system allows import duties imposed on Canada by the U.S. government to be challenged at independent panels made up of people from both countries rather than in the U.S. court system. The U.S. and Mexico can also use the Chapter 19 panels to challenge Canadian duties outside Canadian courts.

Trudeau said Wednesday, as he did Tuesday, that his other red line is the preservation of NAFTA’s “cultural exemption,” which allows Canada to maintain a system of regulations and subsidies meant to protect “Canadian content.” Trudeau said the exemption is needed to allow Canada to block American companies from trying to take over Canadian media entities.

Trudeau made clear that he was open to making incremental concessions to the U.S. on dairy.

He vowed again to defend Canada’s protectionist supply management system, which uses quotas and tariffs to shield Canadian farmers from foreign competition. But he noted that Canada has “shown a certain amount of flexibility” on dairy in other trade negotiations.

In the Trans-Pacific Partnership, Canada agreed to open 3.25 per cent of the domestic dairy market to imports.

“These are things we’re always willing to look at,” Trudeau said, though “that depends on the kinds of negotiations we have.”

Canada and the U.S. blew past a non-binding Trump deadline of last Friday for Canada to sign on to the preliminary deal between the U.S. and Mexico. Trump officially notified Congress on Friday of a deal with Mexico, starting a ticking clock that might allow him to sign a final deal with Mexico alone as soon as the end of November.

But it is not clear whether Congress would be willing to grant him permission to proceed with Mexico alone. Senior Republicans, along with business and labour leaders, have insisted that the deal include Canada, and they have said that a Mexico-only process could violate trade law.