US, Canada Reach NAFTA Deal

Canadian Foreign Minister Chrystia Freeland

Just hours before a midnight deadline, the U.S. and Canadian governments agreed to a deal that would allow United States farmers greater access to Canada's dairy market and address concerns about potential USA auto tariffs, officials from both countries said.

US and Canadian negotiators have been working around the clock this weekend to make a Sunday midnight deadline that would allow the countries to sign the deal before Mexico's outgoing President Enrique Pena Nieto leaves office on November 30.

Earlier Sunday, David MacNaughton, Canada's ambassador to the United States, had said there was "lots of progress, but we're not there yet", before heading back to Washington from Ottawa.

"Everybody's negotiating in good faith right now as we speak".

The agreement will increase US access to Canada's dairy market beyond Trans-Pacific Partnership levels, a senior Trump administration official said.

Canada has reached a deal with the U.S.to rescue NAFTA, the landmark trade agreement that Donald Trump has called the "worst deal ever", according to multiple reports.

The US made a deal with Mexico in August, but relations with Canada over the trade pact had become increasingly strained in recent weeks.

It replaces the 24-year-old North American Free Trade Agreement, which President Donald Trump had called a job-killing disaster.

Negotiators for the United States and Canada were able to overcome major sticking points between the two countries, including Canada's protection of its dairy market and a system for settling trade disputes.

A source told Reuters that Mr Trump had approved the deal.

As part of any agreement, Canada looks set to offer increased access to its highly protected dairy market, as it did in separate pacts with the European Union and Pacific nations.

A revised Nafta that includes Canada has a far greater chance of being ratified by Congress but its fate is still somewhat uncertain.

USA stock index futures also rose, with S&P 500 Index e-mini futures rising by more than 0.5 percent, suggesting the benchmark index would open near a record on Monday.

Canada fought hard to retain Chapter 19, a holdover from NAFTA that USA trade ambassador Robert Lighthizer worked tooth and nail to eliminate.

At an investment conference hosted by TD Asset Management in mid-September, Mr. McKenna argued that Canada must stand its ground on the Chapter 19 dispute resolution mechanism.

"We fail to see how this deal can be good for the 220,000 Canadian families that depend on dairy for their livelihood".

By early evening it appeared high-level talks would bump right up against, and maybe past, a midnight deadline that the US insisted needed to be met to deliver a new NAFTA agreement to Congress.

"We agreed to that", Lopez Obrador told reporters in Mexico City.

Dairy: Canada will allow American farmers more access to its dairy market, raising quotas on the amount of USA dairy that can come into the country and eliminating a pricing system that made it more hard for United States farmers to enter the market. That is more than the 2 million units now exported.

While TPA gives Trump the ability to send a deal to Congress for a simple majority vote, it also includes a statutory 60-day notification period. In August past year, he started a review of the trade pact with Mexico and Canada that opened up negotiations.

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. And this limits the ability of US producers to raise exports to Canada above the quota levels. Earlier this summer Lighthizer, the US trade representative, took a different tack by negotiating separately with Mexico and ultimately forging a bilateral agreement, putting pressure on Ottawa to join or face the possibility of being left out.

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