U.S. Pushes Canada for Dairy Concessions as NAFTA Deadline Nears

August 31, 2018 10:48 AM
 
The Trump administration is pushing Canada to give ground on its politically sensitive dairy sector as talks to revise NAFTA approach a U.S.-imposed deadline of Friday for a tentative deal.

(Bloomberg) --

The Trump administration is pushing Canada to give ground on its politically sensitive dairy sector as talks to revise the North American Free Trade Agreement approach a U.S.-imposed deadline of Friday for a tentative deal.

“The negotiations between the United States and Canada are ongoing. There have been no concessions by Canada on agriculture,” a spokesperson for the office of U.S. Trade Representative Robert Lighthizer said Friday in an email.

Lighthizer still plans to send a notice to Congress on Friday of President Donald Trump’s intention to sign a deal to replace Nafta, as the administration has previously indicated, said a person familiar with the matter.

Trump is stepping up pressure on the Canadians to join a preliminary deal that he reached with Mexico earlier this week. It’s unclear whether the president’s tactics will be enough to spur concessions that bridge the final divides.

“Canada’s going to make a deal at some point. It may be by Friday or it may be within a period of time, but ultimately they have no choice,” Trump said Thursday in an interview with Bloomberg in Washington as bargainers struggled to resolve critical issues. “I think we’re close to a deal.”

Include Canada

It remains to be seen if the notice Lighthizer sends to Congress only mentions the deal with Mexico, or includes recent progress in talks with Canada. Members of Congress, including many in Trump’s own Republican Party, say a deal must include Canada to be approved under a legislative tool that allows a simple yes-or-no vote in Congress.

Meanwhile, an impasse continues on another core issue: Chapter 19 anti dumping panels. Canada will not give in to U.S. demands to kill the Chapter 19 panels, a Canadian official familiar with talks said Friday. Another person familiar with talks said preserving Chapter 19 remains very important to Canada.

That echoed differences of view on the overall progress of talks. Three people familiar said a preliminary agreement appeared likely to be announced as soon as Friday. Three others said too many issues remain unresolved to predict an outcome, even though there was positive momentum. They all spoke on the condition of anonymity because negotiations are private.

A breakthrough will likely require a trade-off between the two nations. An agreement where America softens its demands to eliminate a dispute-settlement panel in return for Canadian concessions on dairy may pave the way for a deal.

The people spoke the same day Canada’s Foreign Affairs Minister Chrystia Freeland met several times in Washington with Lighthizer to reach a deal on Nafta. Her country rejoined face-to-face negotiations on Tuesday, a day after the U.S. and Mexico announced a preliminary agreement in principle.

Trump said he believed Canada was showing interest in reaching an agreement. “They would love to make a deal. And I’m happy with that.”

Preliminary Agreement

The Trump administration wants Canada to sign on to the arrangement by Friday, when it will notify Congress of a deal that would allow current Mexican President Enrique Pena Nieto to sign before his successor takes over Dec. 1. Trump must notify Congress 90 days before signing the pact, which will need the approval of lawmakers. Talks of some kind with Canada are likely to stretch into September even if the preliminary agreement is announced Friday.

Trump and Canadian Prime Minister Justin Trudeau have struck an upbeat tone this week as Canada rejoined discussions after sitting on the sidelines for more than a month while the U.S. and Mexico squared away bilateral issues.

“We need stability, we need predictability. We want investors to know that when they’re making a deal with Canada under these rules, that those rules are going to be around for a while,” Canada’s Trade Minister Jim Carr said in an interview on Bloomberg Television in Singapore Friday. “There’s a possibility” an agreement will be reached on Friday, but Canada doesn’t want “a deal at any cost,” he said.

Difficult Issues

Freeland, the senior Canadian official in charge of Nafta, has said difficult issues must still be resolved, but that negotiators are making good progress.

Another key issue is U.S. tariffs on steel and aluminum imports, though it’s unclear whether relief from those will be included. Mexico didn’t get any reprieve in its own agreement on Monday.

Thursday’s talks ended on a sudden note following a brief final meeting. Freeland arrived just after 10 p.m. for her fourth visit of the day and emerged about five minutes later.

"I had a brief conversation with ambassador Lighthizer,” Freeland told reporters, without saying why the meeting was so short. “I had a couple of things to say, and we’ll reconvene in the morning.”

 

Copyright 2018, Bloomberg

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