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US, Canada fail to reach a deal on rewriting NAFTA

The fate of NAFTA became uncertain Friday when the United States and Canada failed to come to an agreement o...

Posted: Sep 1, 2018 11:35 AM
Updated: Sep 1, 2018 11:35 AM

The fate of NAFTA became uncertain Friday when the United States and Canada failed to come to an agreement on rewriting the three-nation trade pact.

But negotiations will resume on Wednesday.

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"We know a win-win-win agreement is within reach and that's what we're working towards," said Canadian Minister of Foreign Affairs Chrystia Freeland at a press conference Friday.

The US Trade Representative's office said talks with Canada would continue and that President Donald Trump has formally notified Congress of the trade deal he struck with Mexico earlier this week.

"Today the President notified the Congress of his intent to sign a trade agreement with Mexico -- and Canada, if it is willing -- 90 days from now. The agreement is the most advanced and high-standard trade agreement in the world," the statement said.

Talks came to a head on Friday as officials rushed to beat a US-imposed deadline that would allow them to sign the deal before Mexico's president-elect, Andres Manuel Lopez Obrador, takes office on December 1.

The United States and Mexico announced a preliminary bilateral deal on Monday after resolving an issue over auto manufacturing. Canadian officials rejoined the talks this week.

Officials from both the US and Canadian negotiating teams confirmed Friday that they will continue working towards a trilateral deal, and that good progress has been made over the past year at revamping the 24-year-old trade deal.

"The government of Canada will not sign an agreement unless it's good for Canada and good for Canadians," Freeland said Friday.

At issue is Canadian concessions on agriculture.

Trump has said he wants Canada to end its steep tariffs on US dairy products, claiming they hurt US farmers. Canadian Prime Minister Justin Trudeau has pledged to protect his country's dairy industry.

During Friday's negotiations, Canadian officials reportedly brought up remarks made by President Trump on Thursday during an off-the-record conversation with Bloomberg News . The Toronto Star reported that Trump said he would not make any compromises at all in the talks with Canada.

The deal with Canada would be "totally on our terms," he reportedly said.

During an event in North Carolina on Friday, Trump said he would move ahead with a bilateral agreement with Mexico.

"If we don't make a deal with Canada, that's just fine. I say, affectionately, we'll just have to tariff those cars coming in."

"That's a lot of money coming into the coffers of the United States," he added.

When asked about Trump's comments on Friday, Freeland said that her negotiating counterpart is US Trade Representative Robert Lighthizer, and not President Trump.

"This week, and from the beginning of negotiations, Ambassador Lighthizer and his team have been negotiating in good faith and with good will," she said.

Officials from Canada and Mexico have repeatedly made it clear that they want a trilateral deal.

The White House must give Congress an official 90-day notice before entering into a new trade deal. Since administration notified Congress Friday, Trump will be allowed to sign the deal by November 30.

Even then, Congress could still block the deal. It's unlikely any rewrite of NAFTA would come up for a vote until 2019. (Procedure rules allow the president to sign the trade deal first, before Congress votes on it.)

The text of the agreement does not have to be submitted to Congress until September 30.

"Those 30 days is where they could have some wiggle room to revise the text and bring in Canada," said Rob Scott, the director of trade and manufacturing policy research at the Economic Policy Institute.

The governments of Canada and Mexico must also ratify the agreement. If they don't, there's no deal.

Paula Newton and Jeremy Diamond contributed reporting.

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