Canada makes late push to join U.S.-Mexico trade deal

Americans issue ultimatum, threaten auto tariffs again

Canada has unexpectedly agreed to last-ditch talks this weekend to join the U.S.-Mexico trade agreement, with one source saying late Friday the Americans issued Ottawa an ultimatum: strike a deal by Sunday or face devastating tariffs on automobiles.

The United States and Mexico decided Friday to put off plans to release the text of the bilateral agreement they reached last month, opening the door for another push to include Canada in the revamped NAFTA pact.

Mexican Economy Minister Ildefonso Guajardo said the text was delayed due to a “very serious” attempt by Ottawa and Washington to reach a deal.

“In the next 48 hours we will know if we are going to get to a trilateral text or if we are going to have to put forward the text of the bilateral agreement,” Guajardo said in televised remarks to the Mexican Senate.

He said his U.S. and Canadian counterparts “specifically requested” a delay in publishing the text, which Mexican officials had said earlier Friday would be divulged at 7 p.m. ET.

Canada and the States have been immersed in tense, log-jammed negotiations for the last month, launched after the Trump administration unveiled its surprise twoway deal with Mexico in late August. The goal is to get the accord signed by Mexico’s outgoing president before he leaves office Dec. 1, which means, under American law, that a text has to be released by Oct. 1.

U.S. Trade Representative Robert Lighthizer said this week that time was running out to include Canada, but suggested negotiations could nevertheless continue with Canadian officials after Oct. 1.

But sometime in the last day or so, Lighthizer took a different stance, indicating that Sunday was the final deadline, and if Canada was not part of the accord by then, it would face dire consequences, said a U.S. source in close contact with administration officials.

The message was “you’re either in or you’re getting auto tariffs,” said the person, who asked for anonymity to preserve ties with government officials.

“It was enough to spook Canada,” said the source. “Ottawa kind of went apoplectic.”

U.S. President Donald Trump has threatened repeatedly to impose tariffs of up to 25 per cent on imports of vehicles from Canada if it didn’t make trade concessions, and his Commerce Department is now preparing a report that could recommend such levies on all autos brought into the States.

Given those threats from Trump, and pressure from other administration officials to meet various deadlines recently, Canada may want to consider whether the latest threat is genuine, or more posturing, said the source.

But “it’s enough that it got the Canadians’ attention.”

A spokesman for Foreign Affairs Minister Chrystia Freeland could not be reached for comment Friday on the latest development.

Meanwhile, Reuters news agency reported that Mexico’s presidentelect, Andres Manuel Lopez Obrador, told reporters in Mexico City that he would insist that all three countries be part of NAFTA and said Washington had made a new counter-proposal to Ottawa.

A spokesman for the U.S. Trade Representative’s office declined to comment on the status of the U.S.Mexico text and the talks with Canada.

Lopez Obrador told reporters that Trudeau asked him during a Thursday phone call “to intervene and call on the U.S. government to reach an agreement” with Canada, according to Reuters. “We agreed to that.”

But Reuters quoted him as saying the NAFTA language between Washington and Mexico City was now final. “We are not going to reopen the negotiation. That you can be sure of,” Lopez Obrador said.

The talks between the U.S. and Canada have stumbled over several issues. They include American demands to scrap one of NAFTA’s dispute-resolution mechanisms and gain additional access to the Canadian dairy market, as well as the tariffs the Trump administration imposed on steel and aluminum from Canada and the spectre of auto levies.

There’s no guarantee Congress would allow Trump to move forward with a two-country deal that excludes Canada, because it originally granted him the authority to negotiate a three-country pact.

Several members of Congress — including some Republicans — have said in recent days that they want Canada included in the agreement, a message they passed on to Lighthizer in meetings Thursday and Friday.

“Leaving Canada out of a new deal amounts to the president surrendering on fixing NAFTA,” Democratic Sen. Ron Wyden told reporters, according to the Inside U.S. Trade website.

(THE MESSAGE WAS) YOU’RE EITHER IN OR YOU’RE GETTING AUTO TARIFFS. IT WAS ENOUGH TO SPOOK CANADA.