Trudeau stands firm on US demands as NAFTA talks set to resume

As Washington and Ottawa resumed trade talks, Canadian Prime Minister Justin Trudeau said he would only sign a new trade pact that is good for his country.

He comments came just as Canadian Foreign Minister Chrystia Freeland entered negotiations with US Trade Representative Robert Lighthizer in Washington to try to salvage the North American Free Trade Agreement as a three-nation deal.

After months of intense talks, the United States and Mexico announced an agreement Monday on a thorough overhaul of the 25-year-old free trade pact, but President Donald Trump suggested he could cut Ottawa out.

"We will engage in a positive way and look forward to ultimately signing a deal as long as it's good for Canada and good for middle class Canadians," Trudeau told reporters yesterday.

Mexico's President Enrique Pena Nieto and President-elect Andres Manuel Lopez Obrador both said NAFTA should remain a trilateral deal.

The outlines of a NAFTA 2.0 are now on paper, including new provisions on auto trade with higher percentage of locally-produced components, tougher worker protections and a provision to review the deal every six years.

But there remain sticking points with Canada, including its dairy market and how to handle some disputes among NAFTA partners.

"We're encouraged by the progress that the US and Mexico have made, particularly on cars and labor, and I'm looking forward to the conversation," Freeland told reporters.

Negotiators have worked for a year to update and rewrite NAFTA but in the last five weeks Washington and Mexico City held talks to resolve their bilateral issues, especially on the auto industry rules, without Ottawa.

Trump stressed that he could go ahead without Ottawa in the new agreement.

"We could have a separate deal or we could put it in the same deal," Trump said.

He indicated he would take a tough line with Canada on autos and dairy tariffs, long a source of tension between the neighboring countries.

While Trudeau heralded "very positive progress" on auto trade provisions reached by the United States and Mexico, he vowed not to give in to Washington's demands to dismantle Canada's supply-managed dairy market.

"My position on defending supply management has not changed. We will defend supply management," Trudeau said.