Canada to Resume Nafta Talks as Republicans Lose Patience

(Bloomberg) -- High-level Nafta negotiations are set to resume in Washington, where Republicans are warning time is running out for Canada to join the U.S. and Mexico in a trilateral deal.

Canadian Foreign Minister Chrystia Freeland will arrive in the U.S. capital Tuesday evening and talks with U.S. Trade Representative Robert Lighthizer are due to resume Wednesday. Only a few days likely remain until a handshake deal would need to be reached in order to generate text of an agreement by Sept. 30, which is the deadline to allow a new version of the North American Free Trade Agreement to be signed before Mexico’s incoming president takes office.

While Canada has signaled it’s not in a rush to accept a bad deal -- Prime Minister Justin Trudeau said Monday the two sides aren’t yet at a “decision point” -- a top Republican lawmaker indicated Tuesday that patience is thin.

“There is a growing frustration with many in Congress regarding Canada’s negotiating tactics,” House Majority Whip Steve Scalise said in a statement. “While we would all like to see Canada remain part of this three-country coalition, there is not an unlimited amount of time for it to be part of this new agreement.”

Freeland confirmed her trip after a cabinet meeting in Ottawa. Bloomberg reported on her plans earlier Tuesday, citing four people familiar who spoke on condition of anonymity. The Canadian dollar climbed on the news, trading 0.4 percent higher at C$1.2991 per U.S. dollar at 1:39 p.m. Toronto time.

Deadline Unclear

The U.S. is barreling down on the Nafta deadline as a trade fight with China escalates. The precise cutoff point for a handshake agreement is unclear, but a Canadian official believes it’s Thursday.

Trudeau touted progress in the talks at an event Monday night but said the timeline remains unclear. “Every time we get momentum, every time we work together, we do knock off a few more things and move closer,” the Canadian leader said in a televised interview with Maclean’s magazine. “There were points in the spring where we thought we were perhaps days or weeks away; turned out not to be the case. We might be days or weeks away now, it might not be.”

Scalise said in his statement that he’s prepared to leave the northern nation out of the new deal with Mexico. “If Canada does not cooperate in the negotiations, Congress will have no choice but to consider options about how best to move forward and stand up for American workers.”

Asked about the Republican threat, Freeland said she hadn’t yet received any letter from Congress. “From the outset of these modernization negotiations, Canada has been extremely cooperative,” she said. “We have been extremely engaged and this is the fourth week in a row that I will be traveling to Washington.”

The latest Nafta talks are aimed at keeping Canada in the trilateral deal, after the U.S. and Mexico struck their own deal last month on how to update the pact. U.S. President Donald Trump has threatened to proceed without Canada -- the top buyer of U.S. exports -- if a deal can’t be reached, and to hit the northern nation with auto tariffs.

The U.S.-Canada talks hinge on a handful of issues. The Canadians are essentially offering concessions on dairy and other issues in exchange for preserving certain parts of the pact, including anti-dumping dispute panels enshrined in Chapter 19 of the current deal, and an exemption for cultural sectors. The U.S. wants to eliminate the dispute panels.

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