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Report on Business Top Republican says Congress frustrated with Canada over NAFTA talks

A top Republican legislator is demanding that Canada make concessions to reach a NAFTA deal with the Trump administration, signalling that Ottawa cannot count on an increasingly restive Congress as a check against White House threats to cut the United States' largest trading partner out of the pact.

“There is a growing frustration with many in Congress regarding Canada’s negotiating tactics,” Majority Whip Steve Scalise said in a statement Tuesday. “Canada does not seem to be ready or willing to make the concessions that are necessary for a fair and high-standard agreement.”

The warning from Mr. Scalise, the third-ranked Republican in the U.S. House of Representatives, comes ahead of Foreign Minister Chrystia Freeland’s return to Washington on Wednesday in a bid to wrap up negotiations on an overhaul of the North American free-trade agreement.

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Foreign Affairs Minister Chrystia Freeland speaks in the foyer of the House of Commons on Tuesday before leaving for NAFTA talks in Washington.

Sean Kilpatrick/The Canadian Press

It also coincides with a mission by Ontario Premier Doug Ford to the U.S. capital, where he will press Canadian negotiators to get a deal.

The United States and Mexico reached a preliminary NAFTA deal last month and are aiming to negotiate the text of a final version by the end of November. For that to happen, under U.S. trade law, Congress has to see a copy of that text by the end of this month.

Both the Trump administration and Mexican officials have threatened to leave Canada behind and proceed with a two-way pact if Ottawa does not agree to a deal.

Related: Trump can still avoid a damaging global trade war, U.S. Chamber chief says

NAFTA’s saga so far: A guide to trade, the talks and Trump

Intense negotiations between Canada and the United States have focused on U.S. demands for more access to the protected Canadian dairy market, tougher protections for pharmaceutical patents and restrictions on Canadian companies bidding on U.S. government contracts. Canada is fighting to preserve dispute resolution provisions and protections for cultural industries.

“Canada has taken advantage of our country for a long time,” U.S. President Donald Trump said Tuesday at the White House, citing Canadian tariffs on American dairy products. “We love Canada, love the people of Canada, but it is not a good position for Canada.”

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The Trudeau government has long courted Republican members of Congress – who are generally more in favour of free trade than Mr. Trump – in a bid to rein in the White House’s ability to shred NAFTA or kick Canada out of it.

Inu Manak, a trade expert at the Cato Institute think tank in Washington, said Congress is “getting nervous” as the end-of-month deadline for text approaches with no Canadian deal in sight.

“Scalise’s statement is a way to apply that last bit of pressure,” she said. “They’re thinking: How do we get through that this is urgent?”

Still, she said, the warning from Mr. Scalise – a particularly pro-Trump member of the Republican caucus who may run for speaker in the next Congress – is “an outlier” among GOP lawmakers.

Ms. Freeland is also facing pressure from within Canada.

Ontario’s Economic Development Minister, Jim Wilson, told reporters Monday that he and the Premier want to make sure the federal government doesn’t walk away from the table. “You’re all hearing the rumours that we are hearing, that maybe they don’t want a deal. So we’re going down there to say that ‘You bloody well need to get a deal,’ ” Mr. Wilson said.

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On Tuesday, at a ploughing competition in rural Ontario, Mr. Ford said Canada’s protectionist dairy policies and jobs in the manufacturing sector had to be preserved in the new pact.

“Any NAFTA deal must protect Ontario jobs in both the auto and agriculture sectors. I won’t mince words when I go down there, because farm jobs are not a bargaining chip – not now, not ever,” he said.

But Ms. Freeland said Tuesday that Canada was still willing to refuse to sign on to a new deal if it isn’t good enough. And she warned that seeking a deal at any cost would destroy Ottawa’s negotiating leverage and force it to concede too much.

“That is not rhetoric … we absolutely believe no deal is better than a bad deal,” she told reporters. “[A negotiator who wants a deal no matter what] is a negotiator who will be forced to pay the maximum price for that deal.”

Some Canadian sources briefed on the top-secret negotiations said there was reason to believe a breakthrough would arrive this week.

Canadian Labour Congress president Hassan Yussuff described the feeling this week as “cautious optimism."

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“It looks like the U.S. is finally prepared to make a deal,” he said, adding that conversations with Canadian negotiators made him believe there had been a change in tone from the Americans at the table. “There was a sense even from [U.S. Trade Representative Robert] Lighthizer that he wants to get to an agreement.”

And Canada’s support among the U.S. business community is still solid, with the leaders of three major corporate lobby groups warning the Trump administration Wednesday that Canada must remain part of NAFTA.

“It would be unacceptable to sideline Canada, our largest export market in the world,” the presidents of the U.S. Chamber of Commerce, the Business Roundtable and the National Association of Manufacturers said in a letter to Mr. Lighthizer. “American workers and families need an agreement that includes all three North American economies.”

Christopher Sands, director of the Center for Canadian Studies at Johns Hopkins University, said the lesson for Canada in Mr. Scalise’s statement is that, despite its relentless work to line up members of Congress on its side, it cannot be certain of support in the often fractured body.

“You can’t take their support to the bank until the vote is over,” he said.

With reports from Justin Giovannetti, Greg Keenan and Robert Fife.

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