The U.S. and Canadian governments agreed to a deal that would allow greater access to Canada's dairy market and address concerns about potential auto tariffs just hours before a self-imposed midnight deadline, the officials said.
The prime minister, the foreign affairs minister, and Canada's ambassador to the USA are leading the Canadian negotiations from Ottawa, as the US and Mexican imposed deadline of September 30 at midnight closes in.
Ambassador David McNaughton said Sunday evening in Ottawa there are a couple of tough issues left to resolve.
In a joint statement, issued by Canada's Foreign Affairs Minister Chrystia Freeland and the Office of the United States Trade Representative (USTR), the parties revealed the name of the upgraded trade deal - the United States-Mexico-Canada Agreement or USMCA.
In addition to opening the door for a NAFTA rewrite, the deal could also ease trade tensions between the USA and Canada over Trump's steel and aluminum tariffs. He blames the treaty for the loss of American manufacturing jobs and has repeatedly threatened to abandon the trade past signed in 1994, during the Clinton administration.
According to a report by the USTR, Canada's existing supply-management systems that regulate its dairy, chicken, turkey, and egg industries impose tariff-rate quotas for imports.
The quota would allow for significant growth in tariff-free automotive exports from Canada above current production levels of about 2 million units, safeguarding Canadian plants. "It makes no sense to me to repeat that with a new NAFTA". But López Obrador said Friday that he would not try to reopen talks, calling into question the validity of the negotiators' self-imposed deadline.
Congress gave Trump's administration authority to renegotiate a trilateral continental free trade pact, which requires a 60-day notice and publication of the text of any agreement.
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.
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"We fail to see how this deal can be good for the 220,000 Canadian families that depend on dairy for their livelihood".
According to multiple US media outlets including the Washington Post. the new deal is to include substantial changes to rules governing the auto industry.
'Lots of progress, but we're not there yet, ' MacNaughton told reporters.
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 USA tariffs.
The United States and Mexico had already reached an agreement on a new NAFTA in late August, and since then negotiators from Ottawa had been in Washington for continuous talks, but as of late last week officials warned time was running out.
The president last week said he would no longer use the NAFTA name, instead christening the new deal "the U.S. -Mexico-Canada agreement" or USMC.
A side letter published along with the main text of the agreement exempts a percentage of eligible auto exports from the tariffs.
The deal is likely to boost global stock markets today, which have been dragged down by concerns about United States trade disputes with China, the European Union and others.
"It would be a monumental mistake to do this without Canada", U.S. Senator Ron Wyden of OR, the top Democrat on the Senate committee that oversees trade, said Friday, before the text was delivered.