US-Canada Talks Stall

White House Advances Mexican Trade Deal to Congress; Could Add Canada Later

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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Trade talks between the U.S. and Canada continue, but the Trump administration announced it was prepared to send a bilateral deal with Mexico to Congress on Friday and possibly include Canada later. (Graphic by TheMexicanGentleman, public domain)

OMAHA (DTN) -- The White House plans to send a report to Congress before the end of Friday stating that the U.S. reached a trade deal with Mexico, but it will not include Canada.

Talks with Canada were more strained Friday after the Toronto Star reported comments Trump made to Bloomberg News that Trump said were "off the record." The Star reported Trump said any deal between the U.S. and Canada would have be "totally on our terms."

Trump later tweeted Friday, ""Wow, I made OFF THE RECORD COMMENTS to Bloomberg concerning Canada, and this powerful understanding was BLATANTLY VIOLATED. Oh well, just more dishonest reporting. I am used to it. At least Canada knows where I stand!"

Speaking on background, senior White House officials on Friday afternoon said they gave Congress the proper notice under Trade Promotion Authority to send an agreement on Mexico with intentions to follow up with Canada.

The White House then sent a brief notice to Congress with the president stating, "I have notified the Congress of my intention to enter into a trade agreement with Mexico -- and with Canada if it is willing, in a timely manner, to meet the high standards for free, fairy and reciprocal trade contained therein."

President Trump has criticized in comments and tweets Canada's supply management on dairy policy and its after-quota tariffs that can be as high as 300% on some dairy products. Supply management is highly political among Canadian provinces and the country's dairy industry is determined to keep its policies.

Another area Canada and the U.S. have been unable to reach a deal on is keeping, eliminating or replacing Chapter 19 of the NAFTA trade agreement that deals with arbitration panels by industries or companies hit with anti-dumping duties from one of the other trade partners. This has been a major battle in areas such as lumber trade between the U.S. and Canada.

Congress gets 90 days to review an updated North American Free Trade Agreement under Trade Promotion Authority. Getting a trade deal to Congress on Friday gives Congress its 90 days, but would still allow the U.S. and Mexico to complete a trade deal before Mexico's new president takes office Dec. 1. The Trump administration will send the full language of the deal to Congress within the next 30 days.

White House officials said they continue holding talks with Canada "on whether they want to be part of this historic agreement, but that remains our intention."

Shortly after on Friday, Canadian Foreign Minister Chrystia Freeland, in a livestreamed press conference, reiterated that progress was being made "but we're not there yet." Freeland said the Canadian government would not sign a deal that wasn't good for Canadian citizens. She said her government believes the trade deal should benefit all three countries in NAFTA now.

"We know that a win-win-win agreement is within reach and that's what we're working towards," Freeland said.

Freeland declined to talk about specific sticking points in the talks such as dairy trade, saying she and U.S. Trade Ambassador Robert Lighthizer agreed not to talk about such topics in public during the heat of talks. Freeland declined to comment on Trump's comments, but also said Lighthizer and his team "are negotiating in good faith and goodwill."

She added, "As I said, it's going to take flexibility on both sides to get a deal in the end."

After being asked multiple questions about dairy supply management, Freeland said she understands the frustration of reporters asking about specific issues. She then reiterated that Canadian national interests and values were at the core of the government's negotiating priorities.

"The core Canadian positions are well-known, I think, by everyone, and certainly by our negotiating partners," Freeland said.

Freeland did note autoworkers in both the U.S. and Canada have feared how a deal might go. She said it was important to work out a deal that is good for workers in both countries. She said Mexico agreeing to make changes on rules of origin for automobiles was a significant piece in completing a three-way trade deal.

In a statement issued by Lighthizer, the ambassador called the agreement with Mexico "the most advanced and high-standard trade agreement in the world. Over the next few weeks, Congress and cleared advisors from civil society and the private sector will be able to examine the agreement. They will find it has huge benefits for our workers, farmers, ranchers, and businesses."

Lighthizer added, "We have also been negotiating with Canada throughout this year-long process. This week those meetings continued at all levels. The talks were constructive, and we made progress. Our officials are continuing to work toward agreement. The USTR team will meet with Minister Freeland and her colleagues Wednesday of next week."

Chris Clayton can be reached at Chris.Clayton@dtn.com

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(ES/CZ )

Chris Clayton