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US and Canadian negotiators made progress in negotiations to save the North American Free Trade Agreement on Thursday, but some stubborn problems prevented an agreement, including milk quotas, the protection of Canadian media companies and the resolution of trade disputes.
An American source familiar with the Washington talks said it was still unclear whether the two sides could fill the gaps or whether President Donald Trump would opt for a bilateral trade deal exclusively with Mexico.
"We have three issues: chapter 19, cultural issues and dairy products. We have created leverage and brought Canada to the table, "said the source. "Part of our problem is that Canada has fallen back on its commitments (for dairy products)."
NAFTA Chapter 19 governs how disputes are resolved.
Discussions "make progress"
Trump has set a deadline for an agreement this week, urging employees of US Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland to work Thursday night to find ways to go to Washington. before.
Bloomberg News quoted a Canadian government official as saying that an agreement should not be reached this week.
"We are doing well," Freeland told the press after a brief meeting with Lighthizer at the USTR offices on Thursday night.
She reiterated her earlier statements that the day's discussions were "constructive and productive" in an atmosphere of "good will on both sides".
She declined to discuss specific issues being negotiated, but said negotiations would resume Friday.
The differences remain
The Republican Speaker of the US House of Representatives Committee on Ways and Means, Kevin Brady, a congressional trade critic, said the Canadian dairy quota system, the trade dispute settlement procedure and problems."
The Trump administration accuses Canada of discriminating against exports of US dairy products. He also wants to end the Chapter 19 arbitration panels for the settlement of anti-dumping disputes, which Canada has used to defend its softwood lumber exports to the United States, even though the United States
"They continue to push for the conclusion of this agreement. Much depends on Canada's seriousness in resolving these final disputes, "Brady said after speaking with Lighthizer earlier Thursday. "My feeling is that everyone is at the table with the intention of working on these last issues always difficult."
The third unresolved issue is Canada's insistence on preserving the old cultural exemptions from NAFTA that protect its publishing and media companies. Prime Minister Justin Trudeau said this week that he is important to Canada's national sovereignty and identity.
Lighthizer called the exemptions "cultural protectionism" because Canadian companies are free to buy American media.
Trump threatens bilateral agreement
Trump has threatened to continue with a bilateral deal with Mexico, which effectively killed the three-nation deal of NAFTA, which covers a $ 1.2 trillion trade.
The United States and Mexico reached an agreement on the revision of NAFTA early last week, exerting pressure on Canada to accept new conditions.
Trump said on Wednesday that he was expecting it to be clear if there would be an agreement to include Canada in a few days.
Canada also wants a permanent exemption from Trump's steel and aluminum tariffs and Washington eliminates the threat of auto tariffs in the United States.
But Freeland said the national security tariffs in Section 232 on metals were not part of the current NAFTA negotiations.
"Canada's position on the 232 tariffs is unchanged. These rates are unjustified and illegal, "she said Thursday.
Trump asserted that the 1994 NAFTA pact had caused the loss of hundreds of thousands of jobs in the United States, which most economists question.
Data released Wednesday showed that the US trade deficit reached its highest level in five months, at $ 50 billion. The deficit with Canada climbed 57.6%.
Trump informed Congress that he intended to sign the trade agreement reached last week with Mexico at the end of November, and officials said the text would be posted to October 1st.
Negotiators have exceeded several deadlines since talks began in August 2017. In Washington, some say that Trump can not withdraw from NAFTA without congressional approval.
