Freeland cites ‘tough issues’ as NAFTA talks break again with no deal

Leaving a three-hour meeting with U.S. Trade Representative Robert Lighthizer, Freeland said they had discussed “some tough issues.” That language was a departure from her usual upbeat, if unspecific, post-meeting assessments.

Asked what the “tough issues” were, one Canadian government official said, “19. As usual.”

The two governments have been sparring over the Chapter 19 system for resolving NAFTA disputes, which the U.S. wants to eliminate and Canada insists on keeping, and Canada’s protectionism of its dairy industry, which the U.S. wants to loosen.

Another issue appeared to be the question of automotive tariffs. Canada has been seeking some sort of protection against the possibility that President Donald Trump would impose tariffs on Canadian-made cars and auto parts even after the two countries reached a deal on an updated North American Free Trade Agreement.

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Trump has threatened to impose the auto tariffs only if a deal is not reached, but at present nothing stops him from changing his mind.

“We’re not going to sit there and allow Trump to put a gun to our economic head anymore,” Jerry Dias, president of the Unifor union that represents Canadian auto workers, told reporters. Dias said leaving the auto tariff threat unresolved would allow Trump’s administration to say, “Doesn’t matter if we have a formal trade deal. We reserve the right to jerk around your economy at our whim.”

The U.S. has hinted that it might leave Canada behind on NAFTA as early as the end of the month, when Trump could theoretically submit to Congress the official text of a trade agreement with Mexico alone.

But it is far from clear whether Congress would either give final approval to such a deal or even declare that it is legal under U.S. trade law for Trump to proceed without Canada. And multiple supposed deadlines set by U.S. negotiators have been missed with no apparent consequences.

Freeland shrugged off a question about whether the two countries can meet the latest deadline, saying again that Canada is looking only to make a good deal.

Freeland will be in Montreal on Friday for a meeting of female foreign ministers, and she is expected to attend the United Nations General Assembly meeting next week. She said she is in regular touch with Lighthizer when they are not meeting in person.

Daniel Dale is the Star’s Washington bureau chief. He covers U.S. politics and current affairs. Follow him on Twitter: @ddale8