WASHINGTON — Canada's negotiating team in Washington is returning to the bargaining table to resume talks with their U.S. counterparts, hoping for a breakthrough to reach a new deal on the North American Free Trade Agreement.
Foreign Affairs Minister Chrystia Freeland said she is looking over the work that officials from both countries did during a long night of talks to move the needle on negotiations.
Canadian negotiators spent the morning huddled in the Canadian Embassy to discuss the outcomes of last night's lengthy conversations with their assessment setting the stage for this afternoon's face-to-face meeting between Freeland and her American counterpart, Robert Lighthizer, sources said on the condition of anonymity due to the sensitivity of the negotiations.
The two lead ministers on NAFTA held lengthy meetings in Washington on Wednesday.
Sources said both sides want a deal, but cautioned there remain disagreements on key issues, including dairy, culture and the Chapter 19 dispute resolution mechanism.
Canada also wants a permanent exemption from Trump's steel and aluminum tariffs, and removal of the threat of auto tariffs. It also wants to continue protections for its dairy industry and defend lumber exports to the United States, which have been hit with duties.
Freeland told reporters at the close of her Wednesday meeting with Lighthizer that she couldn't predict when the two sides would come to an agreement, saying nothing is settled until everything is settled.
On Thursday afternoon, Freeland described the atmosphere as "constructive" and "positive."
Canada and the U.S. need to present an agreed-upon text to the U.S. Congress by Oct. 1 in order to join the deal the Trump administration signed with Mexico.
NAFTA negotiations, now in their 13th month, are key to determining the economic and trade relationship among the three North American countries, with many workers' and industries' prospects hanging in the balance.
President Donald Trump is threatening to move ahead on a deal that excludes Canada, but he also needs a win on trade ahead of midterm elections in November that will test his ability to keep control of Congress.
Trump and Prime Minister Justin Trudeau traded barbs Wednesday, with each saying they were willing to walk away from NAFTA if they don't get what they want.
The goal of this week's talks is to reach a deal by Dec. 1 so Congress can give its approval to a revised three-country NAFTA before Mexico's new president takes office.
CANADA ‘CHEATING’ AMERICANS
But, as the two sides met Thursday, new economic data showed that the U.S. trade deficit with Canada grew to US$3.1 billion in July. This could provide ammunition to Trump, who has accused Canada of "cheating" Americans.
Trump nearly tore up the NAFTA pact last year after visiting farmers in Wisconsin, a major U.S. dairy producer that Washington says has been hurt by Canadian protectionism.
Trump has claimed that the 1994 pact has caused the loss of hundreds of thousands of U.S. jobs, something that most economists dispute.
Data released on Wednesday showed the U.S. trade deficit hit a five-month high of $50 billion. The shortfall with Canada shot up 57.6 percent.
Trump has notified Congress he intends to sign the trade deal reached last week with Mexico by the end of November, and officials said the text would be published by around Oct. 1.
Negotiators have blown through several deadlines since the talks started in August 2017. As the process grinds on, some in Washington insist Trump cannot pull out of NAFTA without the approval of Congress.
"Trump is relying on bluster and bullying in a desperate attempt to get Congress to swallow his half-baked deal. You can't fix NAFTA without fixing issues with Canada," said Senator Ron Wyden, the top Democrat on the Senate Finance Committee, which oversees trade.
Reuters contributed to this report.