Mexico trade deal text to exclude Canada, irritating USA lawmakers

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01 October, 2018

The United States and Canada have told Mexico they could reach a compromise within 48 hours on keeping the updated North American Free Trade Agreement a three-country deal, the Mexican economy minister said Friday.

One of the sources said Canada would take nothing for granted until Trump had signed off on the deal.

Ottawa is also seeking assurances that the United States will not, after signing a new NAFTA deal, turn around and hit Canada with punitive auto tariffs.

U.S. -Canada talks bogged down earlier this month, and most trade analysts expected the September 30 deadline to come and go without Canada being reinstated.

The remarks by Trump, who repeated a threat to impose tariffs on Canadian autos, knocked the Canadian dollar down to a one-week low against the USA greenback.

So-called Chapter 19 dispute panels, which the US wants to eliminate from Nafta and which Canada wants to preserveAn exemption for cultural sectors which Canada wants to preserveThe use of Section 232 investigations to apply tariffs to steel, aluminum, and potentially autos. "I think it would be malpractice, both for economic and political reasons, not to have a major agreement with Canada", said Senator Ron Wyden, the top Democrat on the tax and trade Senate Finance Committee.

Ujczo said the two sides have also largely settled on a dispute-resolution mechanism similar to that in the original NAFTA known as Chapter 19 - an issue that has always been a major stumbling block in the talks - and on a higher duty-free threshold for goods shipped into Canada: $100, up from $20.

U.S. Trade Representative Robert Lighthizer will publish NAFTA documents around the same time, according to a person familiar with the plans, who asked not to be identified because the schedule isn't public.

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Even Justin Trudeau has been reportedly pulled into the fray, on what's usually a personal day for the prime minister, his itinerary says he'll spend today in "private meetings". "But the US position is that the deadline is very real and there will be consequences for missing it".

"We're very unhappy with the negotiations and the negotiating style of Canada". Some Democrats said they could not support a NAFTA trade deal without Canada.

"We won't sign a bad deal for Canadians", he added.

Sources familiar with the talks told Reuters on September 11 that Canada was ready to give the United States limited dairy access.

A fourth Canadian source directly familiar with the negotiations said any suggestion Ottawa would accept a cap or quota on autos exports was completely inaccurate.

Requests for comment Saturday from the U.S. Trade Representative's office and the Canadian government weren't returned. "However, America's trade disputes with Canada have been serious and long".

However, one of Donald Trump's senior advisers is repeating the American threat to move on without Canada, if it will not fall in line by midnight. They only said they didn't request a formal meeting. The Trump administration could face barriers in Congress if it tries to advance a deal without Canada.

The Trump administration has said the text of an agreement between the three nations is needed by Sunday to allow the current Mexican government to sign it before it leaves office at the end of November.


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