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OTTAWA (Reuters) – Canadian and US trade officials tried on Sunday to settle their differences over difficult issues such as protection against US tariffs.
PHOTO: The flags of Canada, Mexico and the United States are visible on a lectern before a joint press conference following the seventh round of NAFTA talks in Mexico City, March 5, 2018. REUTERS / Edgard Garrido / File Photo
The administration of US President Donald Trump has stated that Canada must sign the text of the North American Free Trade Agreement updated no later than midnight EDT Sunday (4:00 GMT) or be excluded from the trilateral pact including Mexico.
NAFTA supports annual trade of $ 1.2 trillion and markets fear that its demise will cause serious economic disruption.
Two Ottawa sources familiar with the talks said an agreement could be very close, but pointed out that some difficult issues have yet to be resolved.
White House Commercial Counselor Peter Navarro said Sunday that everyone involved was working in good faith and reiterated Sunday's deadline.
"Either the text goes to Mexico and the United States, or the text is in all three countries," he told Fox News Channel.
The American business community is opposed to the transformation of NAFTA into a bilateral agreement, as the economies of the three countries have been closely linked since the entry into force of the original pact in 1994.
However, officials have exceeded several deadlines since negotiations began in August 2017 and a third Canadian source said that if both parties were close enough at midnight, negotiations could extend until Monday.
Negotiators – still separated on issues such as dispute settlement and US demand for better access to Canadian dairy markets – are also addressing the issue of US tariffs.
Trump has already imposed tariffs on Canadian aluminum and steel, citing national security, and threatens similar punitive measures against motor vehicle exports. Canadian Prime Minister Justin Trudeau said it was foolish to sign a new North American Free Trade Agreement only to face new tariffs and ask for guarantees.
"It's hard to understand and they're spending a lot of time right now," said the third Canadian source.
One solution might be to mimic the provisions of the Mexico-United States bilateral convention. deal with NAFTA.
The two countries signed an annex letter authorizing the US authorities to apply tariffs on annual imports of Mexican cars and SUVs of more than 2.4 million vehicles, a figure well above last year's total. The Mexican government said the letter provided insurance that allowed the auto industry to grow.
A fourth Canadian source directly aware of the negotiations said that any suggestion by Ottawa to accept a cap or quota for motor vehicle exports was totally inaccurate.
Canadian Foreign Minister Chrystia Freeland's office did not respond to requests for comment.
Reportage of David Ljunggren; Additional report by David Lawder in Washington; Editing by Lisa Shumaker
