Canada Likely to Reach Nafta Accord Sunday, Announcement Is ‘Imminent’

US President Donald Trump and Canadian Prime Minister Justin Trudeau

US President Donald Trump and Canadian Prime Minister Justin Trudeau

Canada and the United States have agreed a basis for the revised North American Free Trade Agreement (NAFTA), reaching a compromise in late-night talks on Sunday after months of stand-off.

Canada also appears ready to accept assurances that steel and aluminum tariffs that Trump has imposed will be lifted, though it remains unclear whether the taxes would be replaced by quotas that limit metal imports.

Canada's ambassador to Washington, David MacNaughton, echoed the sentiment early Sunday evening, saying talks are moving forward but not yet completed.

"Everybody's negotiating in good faith right now as we speak", Navarro said on Fox News just before 11 a.m.

Trump complained about the behavior of Canadian officials, and said he rejected a meeting with Prime Minister Justin Trudeau, although Trudeau's office said no meeting was planned.

Canada agreed to a cap on auto exports to the US - of about 40 per cent above current production levels - that would be free of any auto tariffs Trump might impose, the source said.

The US and Canada reached a deal late Sunday on reforming the North American Free Trade Agreement, according to reports.

In addition to opening the door for a NAFTA rewrite, the deal could also ease trade tensions between the USA and Canada over Trump's steel and aluminum tariffs. He blames the treaty for the loss of American manufacturing jobs and has repeatedly threatened to abandon the trade past signed in 1994, during the Clinton administration. The pact underpins some $1.2 trillion in annual trade.

Pierre Lampron, president of Dairy Farmers of Canada, said in a statement.

The United States and Canada have reached a last minute deal to salvage the North American Free Trade Agreement, according to people familiar with the negotiations, overcoming deep divisions to keep the 25-year-old trilateral pact intact.

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United States business groups oppose turning NAFTA into a bilateral deal because the three nations' economies have become closely intertwined since the original pact came into force in 1994.

After his election, Trump pledged to overhaul the terms of NAFTA, denouncing it a bad deal for the United States. Trump wanted Canada to open its dairy market to United States farmers, and Canada wanted to preserve a mechanism for resolving disputes.

Canada, the United States' No. 2 trading partner, was left out when the U.S. and Mexico reached an agreement last month to revamp the North American Free Trade Agreement.

The Trump administration had already agreed last month to an updated pact with Mexico, increasing the pressure on Canada to make concessions to join the deal.

Canada and the United Stares are also looking for a compromise on the issue of US tariffs.

"In short, we think this is a fantastic agreement for the USA, but also for Canada and Mexico", said administration officials, who cheered the fact that USA dairy ranchers would soon have "substantial" expanded access to lucrative markets north of the border.

At an investment conference hosted by TD Asset Management in mid-September, Mr. McKenna argued that Canada must stand its ground on the Chapter 19 dispute resolution mechanism.

"It's a good day for Canada", Trudeau told reporters leaving his office Sunday night. The U.S. reached an agreement-in-principle with Mexico in late August and wants it approved before the Mexican President Enrique Peña Nieto leaves office November 30.

The quota would allow for significant growth in tariff-free automotive exports from Canada above current production levels of about 2 million units, safeguarding Canadian plants.

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