The fresh round of U.S. Supply management is considered sacrosanct in Quebec and Ontario – Canada’s two largest provinces, which mark the path to power for all political parties.
The vexing question of greater USA access to the Canada’s protected dairy sector is now pivotal as the NAFTA negotiations in Washington draw closer to President Donald Trump’s Friday deadline for a three-country deal.
Canada’s currency will push higher in the wake of a preliminary trade agreement between the United States and Mexico, according to BMO Financial Group.
“It’s a really good deal for both countries”, President Trump said in announcing the agreement from the Oval Office, with Mexico’s President Enrique Pena Nieto participating by telephone.
Some lawmakers have said that a bilateral deal would face a higher vote threshold in Congress because the NAFTA fast-track negotiating authority law calls for a trilateral agreement.
Wall Street cheered Freeland’s comments on, with all three major stock indices rising sharply shortly after 1400 GMT. It saw shares in Ford rise 3.2 per cent, General Motors 4.6 per cent and Fiat Chrysler 4 per cent.
Top NAFTA negotiators from Canada and the United States increased the pace of their negotiations Thursday to resolve final differences to meet a Friday deadline, with their Mexican counterpart on standby to rejoin the talks soon. “It will either be a tariff on cars, or it will be a negotiated deal; and frankly a tariff on cars is a much easier way to go, but perhaps the other would be much better for Canada”.
Prior to Monday’s announcement, the Trump administration had been threatening tariffs of as much as 25 percent on vehicles imported from any country. Considering the average wage in Mexico is closer to $5 an hour, it’s likely those components will be made in the USA, or perhaps, Canada, which is where the price increase will likely occur.
The leaders talked about the deal, and Peña Nieto repeatedly expressed interest for Canada to be incorporated into the agreement.
Some American dairy farmers have complained about Canada’s steep tariff on dairy products, which averages 249%.
Instead, senior United States officials told reporters the agreement had been extended for 16 years but would be reviewed every six years. The delegation also included Jesus Seade, a World Trade Organization veteran tapped by Mexican President-elect Andres Manuel Lopez Obrador as his future chief trade negotiator.
The U.S. has demanded that Canada move off its line on both issues as well as others.
“I think that what they probably need by Friday is some indication from Canada to the Americans that it’s ready to play ball, that they’re ready to negotiate in good faith”, said Mark Warner, a trade lawyer with MAAW Law, which specializes in Canadian and US law.
“The reality is, there was a bilateral agreement reached between Mexico and the United States and we weren’t at the table”.
The “significant compromises that Mexico was prepared to make to support Canadian workers.set the stage for very intensive conversations” to conclude NAFTA.
That said, getting a new deal in place with Mexico in concert with the expected approval by Canada is viewed positively by automakers.
Talks have also been stymied by the Trump administration’s insistence on a “sunset clause” that would end NAFTA in five years unless all three countries agreed to continue it.