US, Canada agreement on NAFTA 2.0 appears to be in reach

A deal on an overhaul of the North American Free Trade Agreement appears to be within reach, as Canada and the United States were set to continue negotiations today aimed at getting the pact done by the end of the week.

The two sides will resume their talks with a face-to-face between Canada's Foreign Minister Chrystia Freeland and US Trade Representative Robert Lighthizer as they seek a breakthrough.

Despite US President Donald Trump's threats to leave Canada on the sidelines after announcing a breakthrough with Mexico on Monday, Trump and Canadian Prime Minister Justin Trudeau expressed optimism a deal was close.

The White House plans to notify Congress tomorrow of its intention to enter into a new free trade agreement, to provide the required 90 days' notice that would allow NAFTA 2.0 to be signed by December 1, when Mexico will install a new president.

But that will mean compromises on both sides on issues that have created friction between the neighbouring countries, notably Canada's dairy trade rules and mechanisms to settle disputes, as the leaders each try to claim victory.

"I think they're going really well," Trump said of the Canada talks, which are "probably on track" to meet the Friday deadline.

"I think Canada very much wants to make the deal," he said, but again raised the possibility of doing a separate deal with Mexico.

The crucial phase of talks began Tuesday continuing late into the night, and Trudeau expressed optimism the countries could reach agreement by the end of the week.

"There is a possibility of getting to a good deal for Canada by Friday," Trudeau said. But "no NAFTA deal is better than a bad NAFTA deal."
"We have agreed at the ministerial level, we will reconvene to review the work of officials overnight tomorrow morning."
But she declined to comment on the state of the talks, saying: "Given the extreme intensity and the very fast pace of this conversation, we are not going to conduct our negotiation in public."