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Report on Business Canada, U.S. NAFTA talks on pause after two ‘tough’ days

Canadian Foreign Affairs Minister Chrystia Freeland speaks to the media as she arrives at the the U.S. Trade Representative's office in Washington on Sept. 20, 2018. After a three-hour-long meeting with Robert Lighthizer, Ms. Freeland left the U.S. capital with no conclusion in sight.

Carolyn Kaster/The Associated Press

Foreign Affairs Minister Chrystia Freeland left Washington on Thursday ahead of a looming congressional deadline for a NAFTA deal with no conclusion in sight and no firm plans for the next face-to-face meeting with U.S. Trade Representative Robert Lighthizer.

But she insisted she was feeling no sense of urgency despite two days of “tough” talks.

“For Canada, we have only one target," she told reporters after a three-hour-long meeting with Mr. Lighthizer at his office on Thursday. "Our target is a good deal for Canada. It was our target from the start, it is our target now. It is the only thing we’re thinking of. We discussed some tough issues today. The atmosphere continues to be constructive.”

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The two sides will not meet on Friday, as Ms. Freeland heads to Montreal to co-host a gathering of female foreign affairs ministers. Next week, she will be in New York for the UN General Assembly.

Opinion: A bad NAFTA deal? Canada should take it and run

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The U.S. Congress had hoped to have a deal by the end of the month, so it can start reviewing the final text. Some members of the Republican caucus warned this week that Canada had better make concessions to get a deal or the United States could move ahead with a proposed two-way pact with Mexico.

But Ms. Freeland shrugged off the warnings. “I am paid in Canadian dollars,” she said – even as the prospect of a deal next week seems increasingly remote. The Foreign Affairs Minister’s attitude seemed to be summed up by a T-shirt her children had made for her and which she sported as she arrived in Washington on Tuesday night: “Keep calm and negotiate NAFTA,” it read.

Union leader Jerry Dias, who consults regularly with the Canadian negotiating team, said on Thursday that all-night negotiations this week focused mostly on Canada’s priorities: keeping the dispute resolution system and preserving protections for cultural industries.

But that does not mean a deal is at hand, he said.

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“There is some positive discussions going on, but don’t take that as if somehow we’re very close to a deal, because we’re not,” said Mr. Dias, president of Unifor. “In the last couple of days, the Canadian team is feeling respected, insofar as our issues are on the table. … The United States is now recognizing there is not going to be a deal unless they make some serious moves.”

Veteran trade consultant Peter Clark, whose clients include producers in Canada’s protected dairy sector – a key bargaining chip in the talks – said he believes things are moving incrementally.

“It’s going very slow. I am told Canada is engaging on some issues and ragging the puck on others,” he said in an interview.

Some people close to the talks said the Americans believe Canada is delaying until after the Quebec provincial election on Oct. 1. Liberal Premier Philippe Couillard – a key ally of Prime Minister Justin Trudeau – is in an uphill battle for a second term.

The premise is that a new NAFTA deal that includes concessions on dairy – a key sector in Quebec – could hurt Mr. Couillard, who would be blamed for failing to stand up for his province, if it were announced before the vote.

“There is a strong sentiment in Washington that Canada is looking to do this past the Oct. 1 deadline largely because of the political situation in Quebec,” said Daniel Ujczo, a lawyer with Dickinson Wright who has worked for the Canadian and U.S. governments on trade matters.

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Pollster Nik Nanos said Ottawa would certainly be leery of introducing issues that could “materially influence the outcome” of a provincial election.

“The thing any federal government would want to do is throw a political bombshell in the closing days of a provincial campaign that could affect the outcome.”

But Marcel Groleau, president of the Union des producteurs agricoles, Quebec’s farmers union, said Mr. Trudeau has more at stake with Quebec voters in the NAFTA talks than does Mr. Couillard, who supports supply management.

“Let’s say the NAFTA agreement has concessions on supply management, it will not be very well received in Quebec, for sure. Not only by the producers, but by the population. The impact will be on Mr. Trudeau in the next federal election,” Mr. Groleau said by phone.

In another week of grinding talks, the only diversion was a Wednesday visit from Ontario Premier Doug Ford, who flew to Washington for a briefing from the Canadian negotiating team – and to urge them to defend workers in his province’s steel, auto and agriculture sectors.

The briefings got less attention than Mr. Ford’s choice of lunch spot: At the invitation of Kelly Craft, the U.S. ambassador to Canada, the Ontario Premier enjoyed a repast at the Trump International Hotel on Pennsylvania Avenue.

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And he said he did not fault the U.S. President for repeatedly attacking Canada on trade.

“President Trump, he’s doing what he should be doing. He’s the President. He’s protecting his country – as I’m protecting our province and … Prime Minister Trudeau’s protecting the country as a whole,” he said in a Global TV interview. “I don’t hold anything against President Trump. He’s doing the job.”

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