Canada, U.S. NAFTA talks conclude with no deal; talks to resume next week

Talks on a new North American Free Trade Agreement between Canada and the United States have concluded with no deal being reached.

Despite U.S. President Trump’s self-imposed Friday deadline, the two sides say they will resume talks next Wednesday.

U.S. Trade Representative Robert Lighthizer issued a statement, saying the U.S. plans to sign a trade agreement with Mexico in the next 90 days and Canada can be part of that agreement “if it is willing.”

Lighthizer added talks with Canada were “constructive, and we made progress.”

Canadian Foreign Affairs Minister Chrystia Freeland says while “we are not there yet” both sides are still working towards an agreement and that “win-win-win is still within reach.”

Freeland reiterated there is was going to have to be flexibility on both sides but Canada will not sign an agreement that is not good for Canadians.

Friday’s talks were coloured by Trump’s blunt assessment of the negotiations – spoken in confidence but leaked to the media – that landed with a thud on the negotiating table.

Trump, in a conversation Thursday with Bloomberg News, gave a dismissive off-the-record assessment of the Canadian position on major NAFTA sticking points that was leaked to the Toronto Star newspaper and published Friday morning.

“If I say no – the answer’s no. If I say no, then you’re going to put that, and it’s going to be so insulting they’re not going to be able to make a deal … I can’t kill these people,” Trump said of the Canadian government, according to the Star report, which cited an anonymous source.

Any deal with Canada would be “totally on our terms,” Trump was quoted by the Star as saying.

Trump confirmed the authenticity of the remarks in an afternoon tweet.

“Wow, I made OFF THE RECORD COMMENTS to Bloomberg concerning Canada, and this powerful understanding was BLATANTLY VIOLATED,” Trump wrote.

“Oh well, just more dishonest reporting. I am used to it. At least Canada knows where I stand!”

Earlier, as word of Trump’s off-the-record remarks rippled through the media corps gathered outside the offices of the U.S. trade representative, a stoic Freeland maintained her diplomatic countenance, saying only that both the Canadian negotiating team and USTR officials were working hard to reach an agreement.

“We’re not there yet,” she cautioned.

Asked directly about Trump’s remarks and whether the Americans are bargaining in good faith, Freeland walked a diplomatic tightrope. In doing so, she tried to portray her counterpart, U.S. trade czar Robert Lighthizer, as a friend who’s also trying to get a deal.

“Ambassador Lighthizer and his team, throughout this negotiation, have been working really, really hard,” Freeland said.

“Our starting positions at the beginning were very far apart. I think, at this point, we know what each side needs and we’re working hard to find a way. My job is to find the deal that works for Canada…

“Bob and I joke sometimes that we could switch chairs we know each other’s positions so well. And we’re working hard to find that win-win space.”

Trump, according to the Star report, also said he frequently reminds Canada that if necessary he will slap painful tariffs on auto imports. Such a move, experts warn, would inflict heavy damage on the countries’ deeply integrated auto sector.

“Off the record, Canada’s working their ass off. And every time we have a problem with a point, I just put up a picture of a Chevrolet Impala,” Trump said, according to the article.

The Impala is manufactured at the General Motors plant in Oshawa, Ont.

Prime Minister Justin Trudeau held an event Friday in Oshawa, where he announced a government investment towards the creation of new automotive jobs.

Trudeau was asked by journalists about the reports on Trump’s off-the-record comments. He replied that “over the past year and a half there’s a lot of things that have been said from time to time.”

He wouldn’t comment on the obstacles that remain and reiterated he won’t negotiate in public.

“I think people have noticed that our government’s approach is always to stay constructive, positive, to engage on the substance of issues and to demonstrate that we understand that the path forward is one of making sure that there’s win-win-win on all sides,” Trudeau said.

“We’re going to remain constructive, positive, serious and creative about what we do around the negotiating table? We are also going to be unequivocal about always standing up for Canadians’ rights and Canadians’ interests.”

Freeland has been in meetings all week with her American counterpart.

This week’s new round of U.S.-Canada negotiations had generated hopeful signals from both camps that a deal could be struck by the end of the week – but difficult discussions about dairy and dispute settlement remained.

Trump has repeatedly criticized Canada’s dairy industry and has used the threat of tariffs on Canada’s auto production to push for concessions. But Canada’s dairy industry is adamant that it won’t stand for the government allowing the U.S. any more market access, saying it has compromised enough on past trade deals with the European Union and Pacific Rim countries.

Another lingering sticking point is Chapter 19, set up to resolve disputes among the three countries and industry around how to implement NAFTA rules. The U.S. wants it out of the deal, but Canada says it must be included.