United States, Canada clings to NAFTA as leaders hurry

Senior US and Canadian officials resumed Wednesday NAFTA negotiations to end at the end of the month, while their leaders this week reaffirmed that any compromise will be hard won.

"As I said, NAFTA is no better than a bad North American free trade agreement for Canadians," Prime Minister Justin Trudeau told reporters on Tuesday.

History continues below

President Donald Trump set the tone earlier this week by warning on Twitter that "there is no political need to keep Canada in the new NAFTA agreement."

"If we do not make a fair deal for the United States after decades of abuse, Canada will be absent," he said. tweeted.

The United States and Canada have not yet reached an agreement on difficult issues, such as the opening of Canada's dairy markets to US exports. On Wednesday, Canadian Foreign Minister Chrystia Freeland arrived on a hot and busy day for a second week of meetings with US Trade Representative Robert Lighthizer, with negotiations between the two countries resuming after five weeks of absence.

"We look forward to constructive conversations today," she said before starting her meeting with Lighthizer.

The White House went ahead and informed Congress Friday that she would sign a final agreement in 90 days – with or without Ottawa on board. The United States and Mexico signed a handshake agreement on their side of the deal last Monday, but talks last week with Canada failed without resolution.

The administration now has a little less than a month to conclude an agreement with Canada, because the law governing trade agreements requires that the text of an agreement be published 60 days before the signature of the president.

Stephen Moore, an economist at the Heritage Conservancy Foundation, close to the White House after being the campaign's economic advisor, said Wednesday that an agreement with Canada would likely be reached in the coming weeks.

"I think the Mexican agreement is a good start," Moore said Wednesday at a Senate hearing on Capitol Hill. "I think we will have an agreement in the coming weeks with Canada."

Trudeau, however, seemed undeterred by the timing, making it clear this week that Canada would not yield to at least two requests: a final deal would challenge US tariffs and allow Canada to block US companies. to resume its media industry.

"We will not sign an agreement that is bad for Canadians and, frankly, not having a chapter 19 to make sure the rules are respected would be bad for Canadians," said Trudeau. – countervailing and countervailing duties which they consider unfairly applied.

This dispute resolution process was a major demand from Canada during the first NAFTA negotiations and, in the past, Ottawa has used it energetically against US decisions regarding wood imports. resinous work. The Trump administration wants to eliminate it, arguing that it weakens the ability of the United States to defend itself against unfairly traded goods.

Trudeau also stated that a revised NAFTA agreement must preserve Canada's ability to protect its "cultural industries" by blocking the purchase of Canadian television stations or networks by US companies.

"It would be giving up our sovereignty and our identity and it's something we simply will not accept," he said.

The United States is also seeking concessions from Canada on topics that may be politically difficult.

Trump himself raised the issue of import restrictions on dairy products in Canada as a major target. US dairy farmers want to give up an agreement that broadens access to the Canadian market, where imports are limited as part of a politically sensitive program to protect farmers' incomes.

US producers also want Canada to get rid of a program that prevented them from exporting ultra-filtered milk, a new popular dairy product used in cheese production that was not subject to Canadian tariffs or quotas.

The United States requires the NAFTA countries to extend the term of their copyright until the life of the author plus 70 years. Canada currently has a term that extends to the life of the author plus 50 years. Ottawa agreed in the longer term to the signing of the Trans-Pacific Partnership, but ultimately did not have to amend its law after the suspension of the provision when the United States withdrew from the Asia Pacific Pact.

The United States and Mexico have also agreed to strengthen patent protection for a new class of biologic drugs by establishing a 10-year protection period. Canada, which has a national health care system, provides only eight years of protection before cheaper generic versions of drugs can be produced.

Business groups oppose Trump's insistence that there be "no political necessity" to keep Canada in the market. Republicans and Democrats as well as groups of workers have all been united in their claim that NAFTA remains a three-way agreement.

"If you stop a member of this agreement, you break everything, which would be bad news for American companies, for American jobs and for economic growth," said Tom Donohue, President and CEO of the Chamber of Commerce US. "Anything that is not a trilateral agreement will not get Congressional approval and will lose business support."

Sabrina Rodriguez and Megan Cassella contributed to this report.