Published: Sat, September 08, 2018
Markets | By Jeffery Armstrong

Why Canada's dairy market is a target in NAFTA talks

Why Canada's dairy market is a target in NAFTA talks

Trump raised stakes over the weekend by tweeting that there is "no political necessity" to keep Canada in a new trade pact, touting a side deal reached with Mexico.

"We sent them (the officials) a number of issues to work on and they will report back to us in the morning, and we will then continue our negotiations", Freeland told reporters on leaving the US Trade Representative's office in Washington on Wednesday.

Trump has notified Congress that he intends to sign the trade deal reached last week with Mexico by the end of November, and officials said the text would be published by around October 1.

Last week Trump inked a deal with Mexico and said he was ready to press ahead with a bilateral deal without Canada, effectively killing the three-country pact that has been in existence since 1994 and accounts for US$1.2 trillion (RM4.96 trillion) in trade.

The notice had to be sent Friday for Mexico's outgoing government to sign the new deal before it leaves office December 1.

Trump called NAFTA a "stupid deal" for the US causing millions of American jobs to leave the country.

At 3:12 p.m. (1912 GMT), the Canadian dollar was trading 0.3 per cent higher at $1.3139 to the greenback, or 76.11 US cents.

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Canadian Prime Minister Justin Trudeau has said he would not sign a bad deal. Still, she called Trudeau's words "important".

"If Canada has to give up and reform the whole (dairy) system, it's going to have a enormous impact", Novakovic said.

European officials are watching the NAFTA negotiations closely for a sign of how Trump and his team will approach trade talks with Europe.

"As I've said, we will not sign a deal that is bad for Canadians and, quite frankly, not having a Chapter 19 to ensure that the rules are followed would be bad for Canadians", he said.

"I think we've come a long way toward them treating us fairly", Trump said.

"Anything other than a trilateral agreement won't win congressional approval and would lose business support", Donohue said in a statement after talks failed last week.

Freeland insisted that the latest round of talks is being conducted in in "good faith".

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While the Trudeau government has rejected Trump administration criticisms of Canada's high tariffs on dairy products, it has not explicitly stated that supply management - now a hot-button issue on Canada's political scene - is non-negotiable.

USA business and labour leaders have warned Trump not to dump Canada from NAFTA.

Those issues include America's demand for access to Canada's highly protected dairy sector, as well as the Trudeau administration's push to preserve a dispute-resolution mechanism that the White House wants to dismantle.

Securing the cultural exemption was a major objective for Ottawa during the negotiations for the original 1988 Canada-U.S. free trade deal.

His annual report on barriers to USA trade this year singled out the Canadian Radio-television and Telecommunications Commission's decision in 2015 to ban the long-time practice of Canadian advertisers inserting their ads into the Super Bowl broadcast over the more popular American ones.

"The deal is a much more fair deal between the United States and Mexico", Trump said. "But one of the things that we know is that once you've gone and divided citizens into small actually hurts you capacity to govern for the good of all", said Trudeau.

While consumer spending remains strong, corporations are waiting for a decision on NAFTA before making spending decisions, Small added.

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