The vexing question of greater US access to the Canada's protected dairy sector is now pivotal as the NAFTA negotiations in Washington draw closer to President Donald Trump's Friday deadline for a three-country deal.
For Trump, striking a new trade deal with Mexico - and possibly Canada - would be welcomed as a political win for Republicans ahead of the crucial USA midterm elections this fall. "It's a must-have", said Welles Orr, a senior worldwide trade adviser at Miller and Chevalier, and a former Assistant U.S. Trade Representative.
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.
Freeland says the Mexicans' tough decision to compromise on labour and wages as part of its auto rules of origin talks with the US has cleared the way for more substantive talks between Washington and Ottawa.
Freeland will be on the call, as will Canada's ambassador to the U.S., David MacNaughton, and Dominic LeBlanc, the federal minister responsible for intergovernmental affairs.
He thanked US President Donald Trump for his "understanding" and "respect" on the issue.
The deal must be reviewed by Congress and can not be finalized until at least November. "It will either be a tariff on cars, or it will be a negotiated deal; and frankly a tariff on cars is a much easier way to go, but perhaps the other would be much better for Canada". And in July, Trump said on Fox Business Network that he would wait to sign any renegotiated NAFTA until after the midterm elections in November.
Trump warned on Monday he could proceed with a deal with Mexico alone and levy tariffs on Canada if it does not come on board with the revised trade terms.
"The first read is that it means very little and that it's basically a glorified review clause, which of course is something we can live with", the official said.
When a US president intends to sign a trade deal with another country, he has to notify Congress in 90 days, and then Congress must approve it.
"I don't see this reflecting a full, comprehensive deal, the kind of full, comprehensive deal that USA industry and Canada have said they want to see ..." USA demands have ranged from ending those tariffs to scrapping a pricing system for milk ingredients that hurt US exports of milk proteins.
"We recognize that there is a possibility of getting there by Friday, but it is only a possibility, because it will hinge on whether or not there is ultimately a good deal for Canada", Trudeau told reporters, according to Reuters.
In addition, when asked about the timeline for China, Mnuchin said that the trade disputes are not issues that are going to be resolved in one or two meetings.
One of the criticisms of the 24 year-old North American Free Trade Agreement was that it no longer applies to the economy as it exists today.
Senate Republicans, including John Cornyn of Texas and Chuck Grassley of Iowa, have questioned Trump's decision to withdraw from the Trans-Pacific Partnership, which also includes Mexico and Canada.
Conservative foreign affairs critic Erin O'Toole says it was a "colossal failure" that Canada stayed away from the bargaining table for the last few weeks and allowed the USA and Mexico to carry on in its absence.
Indeed, Freeland's office quickly announced that she is flying to Washington tomorrow, cutting short a European trip, for NAFTA talks.
U. S. ambassador to Canada Kelly Craft, who also attended the Wednesday meeting, told The Washington Post discussions were very positive.
The U.S.is seeking more market access for its milk products to the protected Canadian market.
While critics said Canada had been frozen out, Freeland has repeatedly stressed to reporters that she remained in close touch with her United States and Mexican counterparts throughout the summer and had already achieved "a high-level agreement with the US" on some the pending issues on autos and labor rights. What's the rollback in the other areas, and what does Mexico think they agreed to? If the parties agree to continue with no changes, it will be renewed for another 16 years.