U.S. to move ahead with Mexico trade pact, keep talking to Canada

By Julie Gordon, Sharay Angulo and Allison Martell

U.S. President Donald Trump notified Congress on Friday of his intent to sign a trade agreement with Mexico after talks with Canada broke up on Friday with no immediate deal to revamp the tri-nation North American Free Trade Agreement.

U.S. Trade Representative Robert Lighthizer said U.S. officials would resume talks with their Canadian counterparts next Wednesday with the aim of getting a deal all three nations could sign.

All three countries have stressed the importance of NAFTA, which governs billions of dollars in regional trade and a bilateral deal announced by the United States and Mexico on Monday paved the way for Canada to rejoin the talks this week.

But by Friday the mood had soured, partly on Trump's off-the-record remarks made to Bloomberg News that any trade deal with Canada would be "totally on our terms". He later confirmed the comments, which the Toronto Star first reported.

"At least Canada knows where I stand," he later said on Twitter.

Ottawa has stood firm against signing "just any deal."

Canada's lead negotiator and Foreign Minister Chrystia Freeland is scheduled to hold a press conference at 4:30 P.M. Eastern Time on Friday.

The Canadian dollar weakened to C$1.3081 to the U.S. dollar after the Wall Street Journal first reported that the talks had ended on Friday with no agreement. Canadian stocks remained 0.5 percent lower.

Global equities were also down following the hawkish turn in Trump's comments on trade.

Lighthizer has refused to budge despite repeated efforts by Freeland to offer some dairy concessions to maintain the Chapter 19 independent trade dispute resolution mechanism in NAFTA, The Globe and Mail reported on Friday.

However, a spokeswoman for USTR said Canada had made no concessions on agriculture, which includes dairy, but added that negotiations continued.

The United States wants to eliminate Chapter 19, the mechanism that has hindered it from pursuing anti-dumping and anti-subsidy cases. Lighthizer said on Monday Mexico had agreed to cut the mechanism. For Ottawa, Chapter 19 is a red line.

But Freeland said earlier on Friday her team is "not there yet" in resolving still big differences.

"We're looking for a good deal, not just any deal. And we'll only agree to a deal that is a good deal for Canada," Freeland told reporters.

Trump argues Canada's hefty dairy tariffs are hurting U.S. farmers, an important political base for his Republican party. But dairy farmers have great political clout in Canada too, and concessions could hurt the ruling Liberals ahead of a 2019 federal election.

At a speech in North Carolina on Friday Trump took another swipe at Canada. "I love Canada, but they've taken advantage of our country for many years," he said.

© (c) Copyright Thomson Reuters 2018.

©2018 GPlusMedia Inc.

Login to comment

There probably isn't a win-win solution, but there's a ok-ok solution for both sides. Find it.

0 ( +2 / -2 )

Concessions might hurt with the dairy industry but the US could decimate their automotive industry with tariffs as early as next week. Trump didn't have a particular beef with Canada but for whatever reason the Canadians sat this out for five weeks and have no one to blame for the last-minute ultimatum but themselves.

-5 ( +2 / -7 )

Walk away Mr. Trudeau.  

No deal is now the better option now and as for Mexico and their separate deal, let them enjoy being Trump's puppet. Canada needs to begin the painful process of aggressively pivoting away from the US.

As an American and someone who feels strong affection for our Canadian friends, I am disgusted by this regime's abhorrent behavior to our good and trusted ally.

The good people of Canada were at our sides after 9/11, they gave blood and treasure in our support when we needed it, without needing to be asked, they are there. I, for one, will not forget that.

4 ( +7 / -3 )


Thx for recognizing the good Cda did on 911 for the US, Cda & the world, that REALLY showed the truly special thing that US/Cda IS!

That aside I am sure things can be done to save NAFTA, Cda does have some rather odd ways, dairy & other industries have strange inter-provincial laws that are long over due for a re-think

The way trump goes about many things is so off the charts insane, it is causing great damage all around the planet.

IMO trump should have been led away in CUFFs after his remarks about violence if repubs lose some seat this fall, THAT was unbelievable, but sadly NOT anymore, he could seriously start a new civil war INSIDE the US, he truly is a THREAT to the US.

Myself & a great many worldwide look forward to the day he is GONE from office, don't care HOW, just GONE, in the meantime he continues to wreck havoc! INSANE!!

3 ( +5 / -2 )

U.S. Trade Representative Robert Lighthizer said U.S. officials would resume talks with their Canadian counterparts next Wednesday with the aim of getting a deal all three nations could sign.

You have to be a really bad businessman to not see that Canada definately has the upper hand here, and it's its starting to flex its muscles. So naturally if you know you're holding a weak hand, you would start talking trash about your partners. Yeah, that always works.

Lighthizer is under significant pressure by Turnip to get Canada to sign NAFTA 2.0 as soon as possible, as President elect Obrador assumes power on December 1 of this year. If the tri-nation agreement isn't finalized by that time, the revised trade deal can potentially be dissolved and force a complete restart of the negotiations. That'll give Turnip enough time to figure out how to blame everyone else for another one of his messes he likes to create.

3 ( +5 / -2 )

Canada's trade with the USA is fairly small when compared to the total US economy.

US trade with Canada is much more important to Canada. After all, we share a 2,000 mile border that doesn't actually have many official border crossings. In some towns in the NE, there's a sign at the border telling people where to stop in around the corner to get their passport-cards checked, but no guards.

The USA and Canada have been close allies for a very long time, helping each other out with overseas issues. Canada provided passports and hide some Americans during the Iranian hostage times. America manufactured aircraft and placed them on a shared border airport during WW2, before the USA had actually entered the war, which were "picked up" by Canadians and flown to Europe to fight. There are hundreds of similar examples. The people of both countries know these things and I don't see the big picture changing. Our cultures are 85% similar, especially in central and western CA. In certain sports, Canada is much more active internationally than the USA, so I cheer for Canada!

The only negative I have about Canada was that they helped the British during our revolution against them. Well, that and burning the White House, but the USA probably deserved it after looting York. Let's call that even.

-2 ( +1 / -3 )

"I even love their national anthem. It's called, very appropriately, 'O Canada.' Would you like me to sing it?"

Normally, this is the point at which your good friends escort you back to your hotel room.

0 ( +2 / -2 )

Just a few things, from this Canadian. First, Trump does not 'love' Canada. Second, as several of you have already stated, the respectful and co-operative Canada-USA relationship goes back a long, long way, and has survived some pretty testy political leaders on both sides of the border, which, @theFu, is a lot longer than 2000 miles - closer to 5000 - and it's still the longest undefended border in the world. This trade spat will pass, in one way or another. I'm glad Freeland didn't give away the house.

4 ( +6 / -2 )

As a foreign exchange trader for a living, I've been closely following this situation for few months now. Based on common sense economic fundamental standards, Mex and Merica have constituted a manufacturing accord that are reciprocally beneficial to both.

President elect Obrador is able to preserve his election promises by getting a significant victory for his labor policies as well as maintaining much of the current investments. On the other hand, Trump substantially boost American investments while at the same time causing the NAFTA loophole to be expunge as also one of Trump's promise kept.

The NAFTA loophole is where heavily dependent exporting countries China, TPP members, and EU uses Canada and Mexico as a broker for parts shipments and manufacturing the products. fatally flawed agreement loophole as a backdoor to export their finished products to American under the NAFTA regulation. As a result, global trade imbalances are distorted because of this unscrupulous backdoor approach.

Mex and Merica in their bilateral concordance have gotten rid of tariffs/subsidies as well in order to remove trade barriers which ultimately leads to instituting mutual beneficial terms of commerce.

Unfortunately, with Canada's current leadership is based on political viewpoint instead of economic perspective. Canadian counterpart in negotiations will not remove protectionist elements of trade barriers in the banking and telecom sectors. 

Trudeau also will not budge of eliminating protectionist tariffs on dairy products. Freeland will not yield to removing subsidies on aeronautics as well as lumber. Lastly but not the least, is Canada is unwilling or just cannot accept rules of origin in manufacturing issues regarding the NAFTA loophole because this would get rid of their abilitiy to exploit very cheap Chinese as well Asian and EU parts and assemble them in Canada. 

Canadian government practically is extremely reluctant to open up the country's government controlled markets to healthy capitalism element called competition as well as not wanting a reset of heavy industry.

2 ( +2 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites