NAFTA Talks Grind On; Canada Quells Talk of US Quota on Autos

September 20, 2018 Updated: September 20, 2018

WASHINGTON–Canada and the United States showed scant signs of being close to striking a deal on revamping the trilateral NAFTA that underpins $1.2 trillion in annual trade, as Canadian sources played down talk of a U.S. quota on autos.

Canada says it doesn’t feel bound by a U.S.-imposed deadline for the end of September to conclude a deal.

While multiple deadlines have come and gone during the more than year-long negotiations to renew NAFTA, pressure on Canada to agree to a deal is growing, partly to push it through the U.S. Congress before Mexico’s new government takes office on Dec. 1.

Trump, who struck a side-deal with third NAFTA member Mexico last month, has threatened to exclude Canada if necessary. He also warned of tariffs on Canadian autos exports.

Canadian Foreign Minister Chrystia Freeland has held talks with U.S. Trade Representative Robert Lighthizer in each of the past four weeks and opened another round on Sept. 20.

A senior Canadian labor leader briefed on the negotiations told Reuters that an immediate breakthrough was unlikely.

“We’ve made progress according to the briefing I got, but, of course, there is no agreement and there are some predictable issues that need to be resolved,” said Hassan Yussuff, president of the Canadian Labour Congress.

Yussuff said a standoff over how to settle disputes was “a critical issue.” The two sides are also at odds over U.S. demands for more access to Canada’s dairy market.

The Globe and Mail newspaper on Sept. 20 reported that U.S. negotiators want Ottawa to agree to cap its auto exports to the United States at 1.7 million vehicles a year, something that Canadian industry sources have dismissed as unacceptable.

“Canada absolutely … would not agree to a self-imposed quota,” a person familiar with the talks said.

Separately, a Canadian source directly familiar with the negotiations said, “We have not discussed a cap.”

As part of the bilateral deal between Mexico and the United States, the Mexican side agreed to limit its exports of autos and SUVs.

By David Ljunggren