Nafta Talks Between U.S. and Canada Turn Tense as Deadline Looms

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“There have been no concessions by Canada on agriculture,” said the office of Robert E. Lighthizer, Mr. Trump’s top trade negotiator.CreditCreditTom Brenner/The New York Times

By Alan Rappeport

Aug. 31, 2018

WASHINGTON — Trade negotiations between the United States and Canada headed down to the wire on Friday morning, as both countries struggled to make concessions on their priorities, raising the prospect that talks to salvage the North American Free Trade Agreement could falter.

The Trump administration had set a Friday deadline to strike a deal with Canada, threatening to move ahead with a bilateral trade pact with just Mexico if an agreement between the three countries could not be reached. After three days of marathon meetings and optimism about a deal, tension between Canada and the United States became evident on Friday morning.

President Trump continues to insist that Canada make concessions on dairy and drop the tariffs it charges on American exports. On Friday morning, the United States trade representative put out a statement saying that no such concessions had yet been agreed to by Canada.

“The negotiations between the United States and Canada are ongoing,” a spokeswoman for the United States trade representative said in a statement. “There have been no concessions by Canada on agriculture.”

The public statement was unusual for the traditionally tight-lipped office of Robert E. Lighthizer, Mr. Trump’s top trade negotiator.

Chrystia Freeland, Canada’s foreign minister, said repeatedly this week that Canada and the United States had agreed not to discuss the details of the talks in public while negotiations were taking place.

Arriving for a meeting with Mr. Lighthizer on Friday morning, Ms. Freeland said that she was looking forward to hearing what he had to say after a night of reflection.

Canada and the United States have been struggling to come to terms on the fate of Nafta’s trade dispute settlement system, which the United States wants to eliminate but which is important to the Canadians. The United States wants greater access to Canada’s dairy market, which is heavily protected by the Canadian government.

At a rally in Indiana on Thursday night, Mr. Trump expressed his frustration with Canada’s dairy protections. The president accused Canada of not treating the United States fairly and said that if negotiations failed he would punish Canada with car tariffs.

“If it doesn’t happen, then we’ll put tariffs on the cars coming in from Canada, and that’ll be even better,” Mr. Trump said, complaining about the unfairness of Canadian dairy tariffs. “But I think it’s going to happen, and we’ve really developed a very good relationship.”

Canada, like Mexico, has also been working to find a way to get the United States to lift the tariffs that it imposed on steel and aluminum.

The economic effects of the agreement that was reached with Mexico this week remain unclear. Trade experts who have analyzed the preliminary details have suggested that the proposals could do little to significantly reduce the United States’ trade deficit with Mexico, which has been a source of ire for Mr. Trump.

The new regulations requiring carmakers to use more domestic content and pay higher wages will most likely raise prices for consumers and could create new opportunities for automobile manufacturers in Europe and Asia to have a competitive advantage in the United States.

The Friday deadline was intended to allow the deal to be finalized before Mexico’s new administration takes over in December and to give Mr. Trump a win that he could promote ahead of November’s midterm elections.

But the agreement is far from final even if it is sent to Congress on Friday and is not likely to receive a final vote until next year.

Mr. Trump was scheduled to leave Washington for an event in North Carolina around midday on Friday, providing a narrow window for him to publicly celebrate an agreement with Canada at the White House.

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