It remains unclear whether the deal would include a resolution on the fight over USA steel and aluminum tariffs, applied to countries including Mexico and Canada on grounds of national security under Section 232 of the Trade Expansion Act.
Canada's envoy - Foreign Affairs Minister Chrystia Freeland - left a five-minute-long meeting with U.S. Trade Rep. Robert Lighthizer Thursday night.
The latter deal offered 10 other Pacific Rim countries access to 3.25 per cent of Canada's dairy market - and most analysts predict the USA will settle for nothing less in NAFTA.
"Actually in Canada, a tax on cars would be the ruination of the country", he continued. "That's how big it is", he said.
For all of Trump's bluster on trade NAFTA there are certain fundamental truths that not even Donald Trump can change.
Canada and the U.S. need to present an agreed-upon text to the U.S. Congress by October 1 in order to join the deal the Trump administration signed with Mexico. This gives Mexico the hope of negotiating it away with a future president.
Trump has already imposed hefty tariffs on Canadian and Mexican steel and aluminum, using a section of US trade law that gives him executive authority to do that in the name of national security.
"Canada's position on the 232 tariffs is unchanged". Washington charges that Canadian lumber unfairly undercuts prices on US lumber. A TD estimate puts Canadian job losses at 160,000.
Trump made clear, as he has before, that he sees the auto tariff threat as an effective tool in trade talks. The other is to preserve an exemption for Canadian cultural industries.
Speaking to reporters Friday on Air Force Once, he said: "I don't want to do anything bad to Canada".
The most important amendments with regard to the North American Free Trade Agreement (NAFTA) involve new rules and clauses to be met by light vehicle exports to the United States so that they be subject to a zero tariff rate, whose effect on competitiveness will depend not only on compliance with the new regional content thresholds, and those on production in high-wage regions, but on sustaining the WTO MFN tariff rate of the U.S. in this segment.
"The word that continues to block the deal is: M-I-L-K", Kudlow said during an appearance on Fox Business. "Let go. Milk, dairy".
Canadian negotiators are under pressure from the country's dairy lobby not to concede anything amid a tight election campaign in Quebec, home to half the country's dairy farms.
The Republican chairman of the U.S. House of Representatives Ways and Means Committee, Kevin Brady, a powerful voice in Congress on trade, told reporters differences remained between the two sides over Canada's dairy quota regime, a trade dispute resolution settlement procedure and "other longstanding issues". "We've created leverage and driven Canada to the table", the USA official said.