Foreign Affairs Minister Chrystia Freeland participates in a discussion at the Council on Foreign Relations in New York, Tuesday, Sept. 25, 2018. Freeland’s marquee speech to the United Nations General Assembly has been postponed until Monday. (Adrian Wyld/The Canadian Press)

After postponing UN speech, Freeland focuses on looming NAFTA deadline

Canada wants assurances it won’t be subject to heavy American tariffs on steel and aluminum exports

Foreign Affairs Minister Chrystia Freeland postponed her marquee United Nations speech Saturday as negotiators on both sides of the Canada-U.S. border continued their full-court press for a breakthrough on a North American free trade deal.

Freeland, who had been scheduled to deliver Canada’s address to the General Assembly, exchanged her slot with another country on the UN itinerary that was to take the rostrum Monday — and sources familiar with the plan say it may not even be the minister who gives it.

Monday is an important date in the NAFTA calendar: Congress has declared an Oct. 1 deadline for Canada to join an existing agreement between the U.S. and Mexico in time for a vote on Capitol Hill, and it’s also the day voters in Quebec go to the polls.

READ MORE: Latest US NAFTA deadline not firm

Quebec, which is home to half of Canada’s dairy industry, has become an important political fulcrum in the talks, particularly since sources familiar with the effort say Canada has indeed offered concessions that would improve access to the country’s dairy market for U.S. producers.

And despite the fact that dairy remains a popular talking point for people like U.S. President Donald Trump and his trade ambassador, Robert Lighthizer, sources say it’s no longer a hurdle, suggesting that those concessions have been agreed to on the American side.

Other sources say Freeland, who was in Ottawa on Saturday along with U.S. ambassador David MacNaughton, took part in a lengthy conference call Friday night with negotiators and their U.S. counterparts in Washington, who have been engaged in intensive talks all week.

Trade experts took the change in Freeland’s itinerary as a positive sign: “It is more likely than not that we will have a deal by the deadline,” said Dan Ujczo, an Ohio trade lawyer and partner with the U.S. firm Dickinson Wright.

One insider close to the talks, speaking on condition of anonymity given their sensitive nature, was more cautious: “I have learned not to count chickens.”

The most contentious issues continue to be preserving Canada’s cultural exemption and Canada’s insistence on preserving Chapter 19, which allows for independent panels to resolve disputes involving companies and governments.

READ MORE: Trudeau says Trump told him not to worry about tariffs if NAFTA gets renegotiated

Canada also wants assurances it will no longer be subject to heavy American tariffs on steel and aluminum exports, as well as autos — a weapon Trump has made clear in recent months is his preferred cudgel for beating up on trade partners he believes are mistreating the U.S.

As of now, Canada appears content to conduct the negotiations via conference call — a departure from its earlier strategy, which saw Freeland racking up the frequent-flyer miles as she jetted back and forth between Washington and Ottawa.

In an eyebrow-raising news conference Wednesday at the UN, Trump hinted at personal animus between Lighthizer and Freeland when he claimed that he rejected a Canadian request for a face-to-face meeting with Prime Minister Justin Trudeau — a request Ottawa flatly denied making.

“We’re very unhappy with the negotiations and the negotiating style of Canada,” Trump said. ”We don’t like their representative very much.”

Dunniela Kaufman, a Canadian trade lawyer based in Washington, called the latest developments good news and a sign that Ottawa is taking the president’s tactics in stride.

“Her postponing her UN speech to focus on NAFTA is admirable, and indicates that the Canadian government is staying focused and not being distracted by Trump’s negotiating ploys,” Kaufman said.

The president — to say nothing of everyone else in the U.S. capital — has likely been seized all week by the riveting testimony this week out of the Senate Justice Committee, which heard details of the allegations of sexual assault against U.S. Supreme Court nominee Brett Kavanaugh.

“It has been hard to get anyone to talk about anything other than the confirmation hearing this week,” said Kaufman, ”but perhaps that is a good thing for NAFTA.”

The formal text of the U.S.-Mexico deal must be released by Sunday so it can be presented to the U.S. Congress by the end of the month, fulfilling a 60-day notice requirement that would allow lawmakers to approve it by Dec. 1 before the newly elected Mexican government takes power.

Fears have persisted that Congress would be willing to press ahead with the bilateral agreement if Canada can’t get a deal done. Mexico’s new president-elect, however, said in an interview Friday that he has agreed to push the American side to make a deal with Canada.

Mexico and the United States announced their own bilateral deal last month, sparking a renewed round of negotiations between Washington and Ottawa to bring Canada into the NAFTA fold.

One source says Chapter 19 has not survived the Mexico-U.S. deal, but Chapter 20, the government-to-government dispute settlement mechanism, has been preserved in its entirety.

There’s no guarantee Congress would allow Trump to move forward with a two-country deal that excludes Canada because it originally granted him the authority to negotiate a three-country pact.

Trump says he will pursue a trade deal with or without Canada, and has repeatedly threatened to impose punitive tariffs on Canadian automobiles if a trilateral deal can’t be reached.

Trump has already imposed hefty steel and aluminum tariffs on Canada and Mexico, using a section of U.S. trade law that gives him the authority to do so for national security reasons.

The Trudeau government has branded the 232 tariffs illegal and insulting given the close security relationship between Canada and the U.S., including their shared membership in Norad, which defends North American airspace.

— With files from Mike Blanchfield in Ottawa

James McCarten, The Canadian Press


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