U.S. and Canadian officials on Thursday frantically tried to hammer out final sticking points for a deal to replace the North American Free Trade Agreement, with one day left before President Trump’s deadline for an agreement.
Canadian Foreign Affairs Minister Chrystia Freeland huddled for hours with U.S. Trade Representative Robert Lighthizer to decide key issues for Ottawa to join a U.S.-Mexico deal that would scrap the three-way NAFTA.
“We have had very intensive work being done by officials who were meeting late into the night last night on a number of different issues,” Ms. Freeland told reporters as she arrived for the third day of trade talks in Washington.
As they haggled, Mr. Trump flexed his get-tough trade policies on another front.
The president is considering hitting China with tariffs on $200 billion of goods as soon as next week, Bloomberg News reported. The move would be a massive escalation of the trade war between the world’s two largest economies.
Trade talks last week between Washington and Beijing went nowhere. Mr. Trump has aggressively challenged China’s trade practices and theft of intellectual property — including exchanges of tit-for-tat tariffs — but China hasn’t budged.
The president also fumed that China was undermining the effort to denuclearize North Korea, a charge Beijing denies.
In the U.S.-Canadian deal, both sides have expressed optimism that an agreement is in reach.
“It’s a lot that we’re trying to do in a short period of time. We’re working very, very intensely,” Ms. Freeland said. “We continue to be encouraged by the constructive atmosphere that I think both countries are bringing to the table.”
Later, Ms. Freeland held a conference call with Canada’s premiers of provinces and territories to update them and get feedback.
“We had a very good call,” she said. “The fact that we’ve been able to have throughout a real Team Canada approach has been really, really important for our country.”
Canada is under intense pressure to join the U.S.-Mexico deal announced Monday.
Mr. Trump set a Friday deadline for Canada to sign on. Otherwise, the U.S.-Mexico deal will be submitted to Congress as is.
Mr. Trump threatened to hit Canada with a 25 percent tariff on autos if it doesn’t sign on.
Members of Congress from both parties, as well as major U.S. business interests including automakers, want Canada included to preserve the more than $1 trillion in trade under the current trilateral agreement.
Without Canada, the deal would face a more arduous bid for ratification in Congress.
Replacing the 24-year-old NAFTA is a top priority for Mr. Trump, who calls the landmark trade agreement “the worst deal ever made.” The negotiations to rewrite a complex trade agreement have dragged on for a year.
Canada stayed on the sidelines this summer while the U.S. and Mexico executed the hard bargaining.
The U.S.-Mexico deal sought to end the exodus of manufacturing from the U.S., especially with automakers.
It would raise the minimum level of North American components in an automobile to qualify for tariff-free treatment under NAFTA from 62.5 percent to 75 percent.
The agreement also would boost wages for Mexican workers, keep agricultural products tariff-free, increase environmental standards in Mexico and overhaul rules for copywriters and trade dispute resolutions.
The agreement would last 16 years, with an opportunity to review it and adjust the terms after six years.
A major sticking point for Canada is that the deal would eliminate the settlement system for anti-dumping disputes, NAFTA’s Chapter 19.
The U.S. wanted to nix the system and Mexico agreed, but Canada wants the mechanism to fight the Trump administration’s tariffs on softwood lumber, paper and other products.
Meanwhile, Mr. Trump wants Canada to end its tariffs on dairy products, which can run nearly 300 percent.
Ottawa offered to sacrifice its dairy tariffs in exchange for a dispute-settlement system, The Globe and Mail reported.
• S.A. Miller can be reached at smiller@washingtontimes.com.
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