NAFTA negotiations resume after Trudeau criticizes rule-breaker Donald Trump

NAFTA negotiations resume after Trudeau criticizes rule-breaker Donald Trump

NAFTA negotiations resume after Trudeau criticizes rule-breaker Donald Trump

Trump is likely "feeling pressure on many fronts these days and may be frustrated to learn the limits to his authority on trade, hence his warning to Congress "not to interfere", said Burney, who became Canada's US ambassador after the original free trade deal.

All throughout NAFTA talks, the issue of supply management in the Canadian dairy industry has been a sticking point.

"If Canada has to give up and reform the whole (dairy) system, it's going to have a huge impact", Novakovic said.

Wednesday was the first day that talks between the two countries resumed after four intensive days of talks last week ended on Friday without a deal after the mood soured. "We need a dispute resolution mechanism like Chapter 19 and we will hold firm on that".

But his woes were compounded by uncertainty over NAFTA after the United States concluded separate negotiations with Mexico.

"Our dairy farmers are facing dire economic conditions this year, and the Canadian pricing scheme and tariffs are curtailing much-needed markets for U.S. dairy products", said Jim Mulhern, president and CEO of the National Milk Producers Federation, earlier this year.

But it was drafted in a pre-digital, pre-Internet age, and while Canada has said it is open to "modernizing" NAFTA, it continues to insist on a "robust" exception to free trade for cultural industries.

In the past, Trudeau has connected the issue to bilingualism - as an important tool to protect culture, languages, creative sectors and artists.

"There's going to be a lot of pressure to get a deal with Canada", said Mark Sobel, a former U.S. Treasury official and now American chairman of the research group OMFIF.

With the USA midterms eight weeks away, and Trump facing pressure to maintain the Republican hold on the House and Senate, the influence of Congress will permeate the resumption of Wednesday's talks.

Canada is insisting on preserving a dispute-review procedure that the United States and Mexico have agreed to eliminate.

Dan Ujczo, an Ohio-based trade lawyer with Dickinson Wright, said while getting rid of the cultural exemption seems to fit with Lighthizer's philosophy, he can't see Trump holding up an otherwise good deal because of it. As a result, many regional experts and political economists are cautioning that the political gains fostered by the pact could be damaged in the fray of an us-versus-them renegotiation battle that disregards the spirit of community underlying NAFTA's success.

Last week, U.S. President Donald Trump announced he had reached a bilateral trade agreement with Mexico that would replace the three-country NAFTA.

Trump has threatened repeatedly to leave Canada on the sidelines and proceed with Mexico, which reached a deal with Washington last week and could sign NAFTA 2.0 as soon as November 30.

Benjamin Reitzes of BMO Capital Markets wrote in a note to clients that Wednesday's statement makes it clear the NAFTA talks are biggest issue for markets and the Bank of Canada at the moment.

In response to Trump's tough stance on whether Canada joins the deal or not, Trudeau has incredibly stated he will walk away from a new NAFTA deal unless it meets Canadian needs. "There is good faith and good will on both sides, and we are continuing to work on this".

The U.S. and Canada are sparring over issues including U.S. access to Canada's protected dairy market and American plans to protect some drug companies from generic competition.

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