More hints of United States trade détente with Canada, EU

Marco Green
September 14, 2018

David Wiens, vice president of the Dairy Farmers of Canada lobby group, said Canadian farmers have already given up around 5 percent of a domestic market worth around C$21 billion ($17 billion).

Tensions are high between Canada and our neighbours to the south. "Nafta has been the worst trade deal ever".

"We're just interested in breaking those barriers and having a solid relationship with our partners to the north".

There is no clear deadline set for the talks, but optimism remains that an agreement can be reached this month.

Canada and the United States are attempting to put the final touch to a text that could be submitted to Congress at the end of the month and allow Canada to join the agreement signed by the administration Trump with Mexico.

The two sides have so far been unable to resolve key differences over US access to the Canadian dairy market, a cultural exemption for Canada and the Chapter 19 dispute resolution mechanism.

Dairy has been singled out as a key hurdle, including on Friday when Larry Kudlow, a senior economic adviser to Trump, said in a Fox Business Network interview that what "continues to block the deal is m-i-l-k".

U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland were unable to clinch a deal despite meeting late into the evening on Thursday.

Former federal Canadian trade official Matthew Kronby said the reported American demands indicate to him that the White House doesn't really want to strike a deal with Canada.

The talks are focused on USA demands to scrap the so-called Chapter-19 dispute resolution mechanism in NAFTA, overturn some of Canada's current "carve-out" of cultural industries from free-trade rules and loosen protections under the dairy sector's supply management system.

Daniel Ujczo, a USA trade lawyer who has worked for both the Canadian and the US governments, rejects the notion that Canada and the United States are at a stalemate.

USA dairy farmers have long demanded more access to Canada's market and also are unhappy about a Canadian decision to allow farmers to sell milk protein products to the country's processors at a lower price, cutting off American supplies.

"The U.S. knows what Canada's tough issues are, so they're going to hold those to the end, and squeeze out concessions on every other issue they can", said Ujczo, who is regularly briefed on the talks.

Most lawmakers say they prefer all three countries in the deal.

"For this government to go out and be seen as giving too much to the American side on agriculture, and dairy in particular, would be ... nearly suicidal politically", Charest said. "It can't be renamed something or called something else", Perdue said when asked about dairy concessions needed to reach a NAFTA deal, referring to a new milk class created past year by Canada to price milk ingredients such as protein concentrates, skim milk and whole milk powder.

"If (Trump) goes to Congress with a bilateral arrangement with Mexico, he's got problems - real problems", Mulroney said.

Other reports by Click Lancashire

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