Canada: NAFTA Talks 'Making Progress' But Trudeau Differs

Canada's top NAFTA negotiator Chrystia Freeland says there's still room to negotiate the North American Free Trade Agreement, as Prime Minister Justin Trudeau confirms he won't compromise on red-line issues, including the binational oversight panel ensuring all sides adhere.

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As Canadian and U.S. officials returned to the negotiation table on Wednesday, Trudeau told national media that "Chapter 19" of the 24-year-old agreement needs to stay.

The contentious chapter outlines a system for an independent oversight panel of experts from all three parties to NAFTA – Mexico, the United States and Canada – which hears trade disputes among the member states, rather than through U.S. courts.

"We need to keep the Chapter 19 dispute resolution because that ensures that the rules are actually followed, and we know we have a president who doesn't always follow the rules as they're laid out,” Trudeau said. "We will not sign a deal that is bad for Canadians and, quite frankly, not having a Chapter 19 to ensure that the rules are followed would be bad for Canadians."

Trudeau also said NAFTA needs to maintain a "cultural exemption" clause to protect Canadian cultural content and media outlets within the free trade agreement.

Stopping short of accusing U.S. President Donald Trump of exceptionalism, Trudeau said: "We can't imagine a situation in which an American TV company or network could come up and buy radio stations or buy, you know, CTV (Canada Television Network), for example. That would not be good for Canada. It wouldn't be good for our identity. It wouldn't be good for our sovereignty."

Trump said on Wednesday that Canada would be the loser if it didn't sign a deal, adding that "over the next day or two, we'll see what happens."

Last week, Trump agreed to a trade deal with Mexico and promised to leave Canada out if it didn't get on board. However, U.S. businesses and Congress have been pushing back, insisting that NAFTA remain trilateral.  

"Trump is relying on bluster and bullying in a desperate attempt to get Congress to swallow his half-baked deal," said Senator Ron Wyden, the top Democrat on the Senate Finance Committee, which oversees trade. "You can't fix NAFTA without fixing issues with Canada."

The Canadian government also wants Trump to lift the steel and aluminum tariffs slapped on months ago and says it will keep its agricultural and dairy tariffs.

Canadian Foreign Minister Chrystia Freeland reiterated to the press on Wednesday that negotiations were progressing as she entered the offices of U.S. Trade Representative of Robert Lighthizer in Washington.

The U.S. trade deficit with Canada grew to US$3.1 billion in July. Trump nearly walked away from the three-way trade deal last year, claiming that the 1994 pact – which has facilitated US$1.2 trillion in trade between the three countries – has caused the loss of hundreds of thousands of U.S. jobs, which most economists dispute.