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Canada and the United States have tightened their differences on Saturday in the last-minute talks to save NAFTA, but there is no guarantee that an agreement will be reached, two sources in Ottawa said, an idea raised. by one of the key advisers to US President Donald Trump.
Both countries are trying to find a way to update the North American Free Trade Agreement and prevent it from collapsing.
The 1994 pact supports $ 1.2 billion in annual trade and its demise would be extremely damaging, economists say.
Trump threatens to impose car rates in Canada unless signing an agreement text by the end of Sunday. Washington has an agreement with Mexico, the third member of NAFTA.
Addressing to the UN delayed
As a sign of increasing pressure, Canadian Foreign Minister Chrystia Freeland postponed her country's annual address to the United States General Assembly on Saturday to return to Ottawa. Freeland, who spent several days in Washington last month, has no plans to return immediately, the official said.
The two sides are continually talking over the phone and a Canadian government source said the tone of the negotiations was positive and intense.
"The talks are continuing and show that there are problems to be solved. An agreement is not necessarily going to happen, "said the source, who requested anonymity given the sensitivity of the situation.
"Great problems solved"
Speaking Saturday in front of Fox News, Peter Navarro, Trump's trade and manufacturing advisor, gave an optimistic tone to the negotiations' progress.
"Most of the big problems are solved with Canada," said Navarro, adding that it would be "a very good deal for all three countries."
The United States attributes to NAFTA the fact that US manufacturing jobs have migrated to Mexico at low wages and require major changes.
"We will see what happens in Canada if they show up. They must be right, "Trump said Saturday at a rally in Wheeling, West Virginia, to complain about Canada's tariff, which is of particular concern to him.
"We have reached the agreement with Mexico, and it's a good deal for both countries," said Trump.
Prime Minister Justin Trudeau's office declined to comment on Saturday's talks. A spokesman for the USTR did not respond to requests for comments on the negotiations.
Point of collage
A second source in Ottawa said the two sides were still trying to resolve disagreements over a dispute resolution mechanism deemed essential by Canada and that the United States wanted to scrap.
In exchange for a compromise on the mechanism, Ottawa is ready to yield to US demand for much more access to Canada's protected dairy market, the source said.
A third source familiar with the negotiations said that the idea of a link between dispute settlement and access to dairy products was not being discussed.
The opening of the dairy market could cause problems for Trudeau, as the influential agricultural industry opposes it. The Dairy Farmers of Canada lobby did not respond to a request for comment.
Sources close to the talks told Reuters on September 11 that Canada was ready to give the United States limited access to dairy products. Ottawa has compensated farmers for their market share in two previous trade agreements.
Automobile manufacturers consulted
Automakers' executives informed of the plans announced Saturday that they were expecting a final deal similar to the one reached with Mexico, which would cap Canadian exports of auto and auto parts to a higher level than expected. Approximately 40 to 50% to existing imports.
The agreement would allow the United States to impose tariffs of up to 25% on vehicles above the ceiling. The USTR office has contacted automakers over the weekend to obtain information on the operation of cap and quota allocation of vehicles, said an auto industry official.
For both US and foreign automakers, a big question is whether US tariffs on Canadian steels will be lifted.
An agreement with NAFTA seemed unlikely on Wednesday when, after a month of slow talks, Trump said he was fed up with Trudeau, who had insisted he did not sign a bad deal .
On Thursday, US officials contacted Canada asking for details of Ottawa's bargaining demands and where it could compromise, Reuters reported.
Trump is under increasing pressure from US business groups and some US Congressmen, who say excluding Canada from NAFTA would hurt the increasingly integrated economies of the three member countries.
