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08 September 2018, 02:07 | Vera Richards
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Canadian Foreign Minister Chrystia Freeland sounded sanguine on Wednesday as she emerged from negotiations with top USA trade negotiator Robert Lighthizer, although she cautioned that no trade deal was done until the last issue was nailed down. Trump raised stakes over the weekend by tweeting that there is "no political necessity" to keep Canada in a new trade pact, touting a side deal reached with Mexico.
Efforts to salvage the North American Free Trade Agreement as a three-country pact are due to resume Wednesday when Canada and the USA sit down at the negotiating table in a politically charged atmosphere.
Trump touted the strength of the US economy, saying new USA trade deals could help economic growth exceed a second-quarter Growth Domestic Product (GDP) growth rate of 4.2 percent.
Trudeau said this was a "red line" that Ottawa will insist on retaining to make sure NAFTA rules are enforced.
Canada's consumer price inflation jumped to 3% in July on the back of the airfare component, but was expected to moderate back to 2% by early 2019, the BOC said. Nor had it made much of a ripple in public discussions on NAFTA, except during some testimony at a few US hearings, experts say.
"We are making good progress", she said. Canadian negotiators therefore have less leverage in bargaining with U.S. negotiators than they did before the U.S. -Mexico deal.
"If you break off one member of this agreement, you break it all, and that would be bad news for U.S. businesses, for American jobs and for economic growth", said U.S. Chamber of Commerce President and CEO Thomas Donohue. Free Trade Agreement signed in 1987.
She said officials will meet late into the night to review additional issues, and the ministers will resume talks Thursday, noting that "all sides are committed to doing what it takes to get a good deal".
Those issues include America's demand for access to Canada's highly protected dairy sector, as well as the Trudeau administration's push to preserve a dispute-resolution mechanism that the White House wants to dismantle.
Canada granted greater access to its protected dairy market to secure a trade pact with the European Union a year ago.
Mexico is also taking on a leadership role in the Alliance of the Pacific, a grouping of Latin American countries linked by free markets, while Canada a year ago struck a comprehensive trade deal with the European Union.
While the Trudeau government has rejected Trump administration criticisms of Canada's high tariffs on dairy products, it has not explicitly stated that supply management - now a hot-button issue on Canada's political scene - is non-negotiable. "So ensuring that we continue to control our news, our broadcasts, our airwaves and our media is really - keeping it in Canada and independent - is something that's really important to us".
In the USA, businesses, farmers, unions and Congress insistent that there must be a three-nation agreement.
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