Foreign Affairs Minister Chrystia Freeland said Wednesday the United States and Canada have made progress in talks to revise the North American Free Trade Agreement (NAFTA), and officials from the two sides would work together into the night to flesh out areas for further discussion.
Freeland sounded upbeat as she emerged from a day of talks with top U.S. trade negotiator Robert Lighthizer, although she cautioned that no trade deal was done until the last issue was nailed down.
U.S. President Donald Trump has threatened to push ahead with a bilateral deal with Mexico, effectively killing the almost 25-year-old three-country pact, which covers $1.2 trillion in trade. The United States and Mexico reached an agreement on overhauling NAFTA at the beginning of last week, turning up the pressure on Canada to agree to new terms.
Trump sounded a more upbeat note earlier, and said he expected to know whether a deal could be struck to include Canada in the next few days.
Neither Freeland nor Trump spelled out areas of disagreement and neither detailed the progress that had been made. Lighthizer did not speak to the press or issue a statement.
Wednesday was the day that talks between the two countries resumed after four intensive days of talks last week ended on Friday without a deal after the mood soured.
Canada wants a permanent exemption from Trump's steel and aluminum tariffs and the threat of auto tariffs to be removed. It also wants to continue protections for its dairy industry and defend lumber exports to the United States, which have been hit with duties.
As the two sides met for talks, new economic data showed that the U.S. trade deficit with Canada grew to $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 charges 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%.
Trump has notified Congress that 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.
But Canadian officials, who note increasing political pressure on Trump from U.S. business and labour circles to keep NAFTA as a trilateral arrangement, said they were in no hurry.
