Canada trade deal 'eminently possible,' Freeland says

Sainte-Marie-Madelaine Quebec. THE CANADIAN PRESS  Ryan Remiorz

Lighthizer and Canadian counterpart Chrystia Freeland returned to the negotiating table for one day Tuesday before she jetted off to Saskatoon to brief the prime minister at this week's caucus gathering, which wraps up Thursday.

The Canadian dollar edged up 0.07 cents to 0. If Canada is kicked out of the new NAFTA, Americans would see a number of industries negatively affected, from oil production to retail stores to tourism as Canadians will choose to buy more domestic products to avoid American ones.

"We have been very clear on that, that there can not be more access given", Wiens said in a telephone interview. "The ruination of the country", Trump said at an event in North Dakota.

"Without Chapter 19, NAFTA is utterly useless as it would subject Canada and Mexico to the vagaries of the USA political system and its courts when determining trade policy actions", said Derek Holt, vice-president at Scotiabank Economics, in a note recently.

As Canadian Foreign Minister Chrystia Freeland arrived back in Washington, Prime Minister Justin Trudeau warned of what he termed "massive disruption" and job loses on both sides of the border if Washington follows through on threats to impose auto tariffs.

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Dairy has been singled out as a key hurdle, including on Friday when Larry Kudlow, a senior economic adviser to Trump, said in a Fox Business Network interview that what "continues to block the deal is m-i-l-k".

The U.S. and Canada are trying to reach an agreement by the end of September that would complete a revamped three-nation deal with Mexico that Congress may consider next year.

Also unresolved are protections to Canada's cultural sector and the Chapter 19 dispute resolution mechanism.

Former federal Canadian trade official Matthew Kronby said the reported American demands indicate to him that the White House doesn't really want to strike a deal with Canada.

Trudeau repeated on Wednesday that he will defend Canada's dairy industry.

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Trudeau, facing elections in 2019, said on Sunday (June 10) that Canada "will not be pushed around", triggering a fierce attack from Trump and his advisers, on Tuesday (June 12). "It would cause a massive disruption and I think lots of layoffs in the United States", Trudeau said on Canadian radio.

But a leader of this country's main milk-producing lobby group said Monday his industry has given enough in previous trade deals and will not tolerate more concessions.

Canada is the United States' second-largest trading partner, with US$673 billion in total goods and services crossing the border in 2017.

"For this government to go out and be seen as giving too much to the American side on agriculture, and dairy in particular, would be ... nearly suicidal politically", Charest said.

After the arbitrary deadline passed without any concessions from the Canadians, let alone a finalized deal, Trump once again threatened to exclude Canada from the new NAFTA via Twitter.

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