Foreign Affairs Minister Chrystia Freeland returns to Washington for another round of NAFTA talks with the United States Tuesday despite an apparent deadlock between the two countries over Canada's insistence on preserving a key dispute-resolution chapter of the accord.
It's unclear how long the talks are scheduled for this week. The governing Liberal Party is holding its caucus retreat in Saskatoon on Wednesday and Thursday and it's not known whether Ms. Freeland will pause negotiations after Tuesday to head to the caucus meeting.
"We will be travelling to Washington … to continue the NAFTA negotiations," Ms. Freeland told reporters at the Women in the World event in Toronto, without commenting further on the state of the trade talks.
Canada and the United States have been negotiating since Aug. 28 after Washington unveiled a proposed North American free-trade deal with Mexico and pressed Canada to sign on or be left out. The United States is seeking to water down or eliminate Chapter 19, which provides for binding arbitration decisions to settle disputes. It also wants significant new access to Canada's sheltered dairy industry and seeks the relaxing of foreign ownership restrictions on Canadian media companies.
So far, Canada has been unable to obtain a guarantee from the United States that Canadians would not be hit with punitive U.S. auto tariffs if Ottawa agrees to a new NAFTA deal with Washington.
Former federal Canadian trade official Matthew Kronby said the reported American demands indicate to him that the White House doesn't really want to strike a deal with Canada.
"To me, a lot of that is consistent with my suspicion that the U.S. doesn't really want to get a deal [or] at least the [Trump] administration doesn't," he said, citing the leaked off-the-record comments Mr. Trump gave Bloomberg in late August when he said he was refusing to compromise with Canada and that any deal with Canada would be “totally on our terms."
"It seems even if we give a lot, the U.S. keeps asking for more," said Mr. Kronby, an international trade lawyer with Borden Ladner Gervais. "It appears as if there is not a whole lot of momentum right now."
Last week, as the The Globe and Mail reported, Mr. Trump's trade chief, Robert Lighthizer, refused Ottawa's key demand, the preservation of the Chapter 19 dispute-resolution system, in order to extract maximum concessions from Canada on its protected dairy market and pharmaceutical patents.
Daniel Ujczo, a U.S. trade lawyer who has worked for both the Canadian and the U.S. governments, rejects the notion that Canada and the United States are at a stalemate. He said Canada and the United States spent a lot of time last week reconciling what the U.S. and Mexico had already agreed upon. "There is progress made. There are almost two dozen chapters closed" in the NAFTA deal including reducing red tape on cross-border trade, he said on Monday.
He added that the Office of the United States Trade Representative wants to wrap up talks with Canada quickly.
Mr. Ujczo said he doesn’t believe Mr. Trump feels strongly about Chapter 19. However, he said, Mr. Lighthizer is far more eager to dismantle this dispute-settlement provision.
"I don't think President Trump will go to the mat over Chapter 19. But right now the U.S. position is to squeeze every last drop in concessions."
He said, however, it was wrong for Canada to have publicly declared it would not accept concessions on certain files.
"There is no question Canada and Mexico are going to get a haircut and the best you can hope for when you get a haircut is that it looks stylish," Mr. Ujczo said.
Prime Minister Justin Trudeau, speaking at the Women in the World summit, was circumspect about the talks, saying only that he remains hopeful.
"There’s an opportunity to update NAFTA and we’re happy to do it, but as I’ve said it has to be the right deal, it has to be a good deal," he said. "We continue to work hard and we are positively optimistic that we can get to a win-win-win for all three countries."