Published: Fri, September 07, 2018
Global | By Craig Ferguson

NAFTA talks make progress; US, Canadian officials to work into night

NAFTA talks make progress; US, Canadian officials to work into night

Prime Minister Justin Trudeau says the USA president's aversion to following rules is a key reason Canada can't budge on a dispute settlement provision in a revamped North American Free Trade Agreement.

Trudeau made clear, however, he would insist on keeping the so-called Chapter 19 dispute-resolution mechanism that Washington wants to scrap.

In addition, the tentative deal would require that at least 75 percent of an automobile's value be produced in North America (as opposed to, say, China) if that vehicle is to qualify for duty-free importation into the US.

Dan Ujczo, an Ohio-based trade lawyer with Dickinson Wright, said while getting rid of the cultural exemption seems to fit with Lighthizer's philosophy, he can't see Trump holding up an otherwise good deal because of it.

After seeing the USA and Mexico create a new deal without taking Canada into account, Trudeau has found himself on the outside looking in at Canada's neighbors in North America. "As the Trump administration has been dealing with trade around the country, what I've been doing is, as it impacts Florida businesses, I've been talking to Bob Lighthizer, who's the federal trade representative, and letting him know the importance of free trade and how it's impacting Florida businesses", Scott said.

In fact, since the start of NAFTA talks in August 2017, Trudeau's government set out three "no-go" zones: Canada's quota system that controls dairy, poultry and egg production, a dispute settlement system to resolve complaints about unfair anti-dumping and counter-vailing duties, and the so-called "cultural exemption".

The U.S. and Mexico have struck a new NAFTA deal but Canada is still negotiating, with talks expected to resume Wednesday.

U.S. President Donald Trump has threatened to push ahead with a bilateral deal with Mexico, effectively killing the nearly 25-year-old three-country pact, which covers $1.2 trillion in trade.

Trump is embarking on a high-stakes gamble, cutting a deal with Mexico first, in hopes of forcing Canada to acquiesce.

"Congress should not interfere w/ these negotiations", Trump tweeted Saturday afternoon, "or I will simply terminate NAFTA entirely & we will be far better off..."

Trudeau said on Tuesday: "There are a number of things we absolutely must see in a renegotiated NAFTA", and reiterated he would not sign a bad deal.

While Donald Trump has waged a public war with defiant National Football League players, Canada's decision to allow the broadcast of glitzy American Super Bowl commercials has quietly festered at the NAFTA talks.

He called NAFTA "a very stupid deal".

Any deal with Canada would be "totally on our terms", the Toronto Star quoted Trump as saying in an off-the-record aside during an interview with Bloomberg News.

"It won't be fine for Canada, but we love Canada", he is quoted in the report as saying. "But they and other countries have been taking advantage of the United States for many years". Comments on Kentucky Medicaid changes largely negative Cohen draws fresh scrutiny from key Senate panel MORE (D-Ore.), the ranking member of the Senate Finance Committee, which oversees trade, said this week that the president can't unilaterally withdraw from NAFTA, a move Trump has repeatedly threatened to make.

Canada wants a permanent exemption from Trump's steel and aluminum tariffs and the threat of auto tariffs to be removed.

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One of the key issues dividing the USA and Canada is agriculture policy, and particularly United States demands over Canada's dairy market.

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