MONTREAL: US and Canadian negotiators were holding eleventh-hour talks on Sunday aimed at revamping the North American Free Trade Agreement ahead of a Washington-imposed deadline.
Details remained sparse, but U.S. administration officials say the deal - newly christened the U.S. -Mexico-Canada Trade Agreement, or USMCA - provides increased access to Canada's dairy market for U.S. producers and limits the American impact of Canada's controversial supply management system for dairy and poultry products, long a thorn in the side of President Donald Trump.
The agreement with Canada and Mexico -- two of the United States' biggest trading partners -- fulfills President Donald Trump's campaign pledge to renegotiate NAFTA and avoids his threat to exclude Canada if the talks failed.
On dairy the official said Canada essentially gave the USA the same access it offered in the Trans Pacific Partnership trade agreement that President Trump rejected. "It's a great win for the president and a validation of his strategy in the area of worldwide trade", said one senior USA official.
The US Congress is required go through a 60-day review of the draft agreement, which could potentially allow for NAFTA signing around December 1.
But the deal failed to resolve United States tariffs on Canada's steel and aluminium exports. The Trump administration repeatedly threatened to move forward with the bilateral deal, excluding Canada.
Negotiators from both sides spent two days talking by phone as they tried to settle a range of hard issues such as access to Canada's dairy market and U.S. tariffs.
Three of the major outstanding issues between Canada and the U.S.in NAFTA talks leading up to this week were Section 232 national security tariffs, NAFTA's Chapter 19 dispute resolution mechanism, and regulations around Canada's dairy sector.
The agreement also comes after the United States and Mexico came to a separate deal that strengthened rules around auto production in August.
The US and Canada came to an agreement Sunday to tweak key pieces of the North American Free Trade Agreement, known as NAFTA.
MacNaughton is flying back to Washington Sunday night, one official said.
After months of sputtering talks, momentum picked up this weekend as Trudeau inserted himself and made clear that he wanted to get something done.
Earlier in the evening, President Donald Trump was briefed on the almost finalized negotiations by U.S. Ambassador Robert Lighthizer and White House adviser Jared Kushner. "The door is closed to the fragmentation of the region", Jesus Seade, President-elect Andres Manuel Lopez Obrador's NAFTA negotiator said on Twitter.
"They used to call it NAFTA", said Trump after a deal had been reached with Mexico.
The Trump administration officially notified Congress of the US-Mexico trade agreement on August 31.
"There's just a lot going on, and not a lot of time to do it in....at the end of the day, USA negotiators are agreeing, but it still has to be the president that signs off, and who knows where he is on things".
Lawmakers from both parties have urged the White House to include Canada in any revised Nafta, warning that excluding Canada, which is America's largest export market, could disrupt supply chains, cost jobs, and slow the U.S. economy.
The political stakes are high on both sides of the US-Canadian border: Trump needs to look strong heading into the November midterm elections, where his Republican Party is fighting to keep control of Congress, while Trudeau does not want to be seen as caving before next year's general election.