The US-Canada Nafta deal is getting delayed again.
According to Bloomberg, the heavily-negotiated trade agreement between the U.S. and Canada is unlikely to be reached this week, four people familiar with talks said, raising the chance that the latest deadline could be missed.
The Bloomberg sources said that gaps remaining between the U.S. and Canada make a deal unlikely this week without major movement, which now appears unlikely.
The member nations are pushing to publish text of a deal by the end of the month to meet a U.S. trade law deadline required to sign a deal before Mexico’s incoming president takes office; meanwhile Trump has threatened to move ahead without Canada if a deal isn’t reached, and to apply auto tariffs to Canada.
Meanwhile, Reuters reported that Canadian business and political leaders are increasing the pressure on Prime Minister Justin Trudeau to agree on a deal to renew NAFTA and drop his insistence that no deal is better than a bad deal.
With the two sides clearly far apart in some areas, Trudeau has said his Liberal government will walk away if necessary.
However, signs are growing that hitherto solid domestic support for Ottawa’s stance is fraying amid fears of the potential economic damage. The United States takes 75 percent of Canada’s goods exports and President Donald Trump is threatening to impose tariffs on autos.
Freeland defended Ottawa’s stance on Tuesday, saying “any negotiator who goes into a negotiation believing that he or she must get a deal at any price ... (will) be forced to pay the maximum price for that deal.”
That approach though is starting to worry some: "The problem with the bold statement that ‘No deal is better than a bad deal’ is that a bad deal is very much in the eye of the beholder,” said John Manley, a former Liberal finance minister who heads the Business Council of Canada, which groups many chief executives.
“Anyone who thought ... we were going to get something better than what we had under NAFTA 1.0 was delusional. We knew that this was all about taking some things away,” Manley said by phone on Tuesday.
The biggest sticky point in negotiations remains Canadian dairy products, as U.S. negotiators are pressing for more access to Canada’s protected dairy market. Doug Ford, the premier of Ontario - Canada’s most populous province and center of the auto industry - will meet Canadian negotiators on Wednesday to express his concerns.
“You’re all hearing the rumors 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’,” Ontario trade minister Jim Wilson said on Monday.
Trudeau’s Liberals have no chance of winning a federal election set for October 2019 unless they do well in Ontario.
Trudeau told an interviewer on Monday that a decision point might be weeks away.
Canadian officials say they do not believe the U.S. Congress would ever back the idea of excluding Canada from NAFTA.
Manley said his members were increasingly concerned that Trudeau’s team might be relying on Congress, which he termed “a very high risk strategy”.
U.S. Republican House Majority Whip Steve Scalise on Tuesday cited “a growing frustration with many in Congress” over Canadian negotiating tactics and suggested Canada could be left out of NAFTA. In a separate Washington development, U.S. business leaders on Tuesday urged the administration to include Canada in any trade agreement with Mexico.
In response to the Bloomberg report, the loonie dipped briefly below 1.30 vs the dollar, although it has since recouped all gains.