Top U.S. and Canadian trade negotiators were set for a second day of talks on Thursday over a revised North American Free Trade Agreement after their subordinates worked late into the night to flesh out opportunities for a compromise deal.
Wednesday was the first day that negotiations between the two countries resumed after four intensive days of talks last week ended without a deal on Friday after the mood soured. They are aiming to complete a deal by the end of the month so that Mexico, Canada and the USA can sign an agreement by the end of November.
As Canadian Foreign Minister Chrystia Freeland arrived back in Washington, Prime Minister Justin Trudeau warned of what he termed "massive disruption" and job loses on both sides of the border if Washington follows through on threats to impose auto tariffs.
"Our farmers don't have access to the Canadian markets the way that they have access to us". But he said the Liberals plan to be flexible on other issues in order to get a deal.
That's why Trudeau continues to stand firm that any deal with the USA and Mexico protect Canadian middle class jobs by protecting domestic dairy and poultry production and why he insists a so-called cultural exemption that safeguards domestic television and radio from takeovers by us media conglomerates be included in the new NAFTA.
"Even Canadian concessions on dairy may not be enough to make the USA keep the current dispute resolutions", said Carlos Capistran and Mingzi Yi, economists at Bank of America Merrill Lynch, in a note.
Speculation has been building in recent weeks that the Trump administration is in the midst of a pivot from picking trade fights with allies to focusing on confronting China.
Minister of Foreign Affairs Chrystia Freeland participates in an armchair discussion with journalist Masha Gessen, moderated by Heather Reisman, CEO of Indigo Books and Music, at the Women in the World Summit in Toronto, Sept. 10, 2018.More news: Novak Djokovic plays down comparisons to past success after US Open win
The US and Canada met for most of last week without reaching a resolution.
No word yet on when she might return to Washington to continue NAFTA talks.
They think Canada will make concessions on the mechanism to reach a trade deal with the US this month.
Although issues related to autos, such as the USA push to boost North American content in vehicles, have been a major part of the negotiations, other issues, particularly a desire for more US access to Canada's dairy market and Canadian insistence on maintaining NAFTA's dispute resolution system, are believed to be some of the major remaining sticking points. Asked if it would be gone from a NAFTA deal, he said, "I think it should be".
"Sure, it's business and it's important, but Gander is the place that - in a snapshot - illustrates the Canada-U.S. relationship".
"It's time to update this deal after 25 years".
He professes to have American interests at heart in his hard-line handling of Canada in these ongoing NAFTA negotiations.