Canada ‘very encouraged’ by progress on US-Mexican NAFTA talks: Freeland [UPDATED]

Chrystia Freeland.
Photo: Кабінет Міністрів України

OTTAWA — Canada’s foreign affairs minister says she’s “very encouraged” by signals from Washington that the United States and Mexico are close to figuring out their bilateral issues within the three-country North American Free Trade Agreement.

Chrystia Freeland said that she’s been in close contact — including this week — with her US and Mexican counterparts throughout their two-way NAFTA talks, which are now in their fifth week. The issue of rules of origin on autos has been central to the summertime US-Mexico discussions, she added.

“We are very encouraged by what we’re hearing from our NAFTA partners,” Freeland told reporters in Nanaimo, BC, where she’s participating in a retreat with colleagues from the Trudeau government cabinet.

“What we’ve agreed with the US and Mexico is, once the work on those bilateral issues is done, then Canada is looking forward to joining the negotiation and a swift conclusion of the NAFTA negotiations.”

There’s optimism that US Trade Representative Robert Lighthizer and Mexican Economy Minister Ildefonso Guajardo could conclude their face-to-face negotiations as early as this week—and open the door for Canada to re-enter the talks.

A report by Politico, based on information from unidentified sources, said the White House is expected to announce a “handshake” deal between the US and Mexico on Aug 16. US President Donald Trump is expected to attend the announcement, the report said.

Guajardo told reporters in Washington he hoped to have a solution in “the next couple of hours, or couple of days.” However, on the possibility of a handshake deal, Guajardo said it would have to involve all three countries.

“What we’re doing here is trying to get and solve the issues that are most important between the US and Mexico — that will lead to a trilateral meeting with Canada,” he said.

“I think the handshake happens when everybody’s done.”

Related: NAFTA in August? Canada’s US envoy says ‘aspirational,’ but will work for it

Some observers believe Ottawa has been sidelined from the NAFTA negotiations by the Trump administration and could find itself forced into deciding whether to accept a less-appetizing deal hashed out between the U.S. and Mexico.

But Canadian officials, as well as officials from the US and Mexico, have insisted the two-way NAFTA talks are necessary before the three-party talks can resume.

“NAFTA is a trilateral agreement, but inside that agreement there are a lot of issues that are chiefly bilateral and that is what they’re focused on,” Freeland said.

The rules of origin on cars is an issue that concerns all three countries and it’s an area where detail matters, she added.

“And Canada will very much have a voice in the finalization of all of this,” Freeland said.

Last week, Trump suggested that Canada had deliberately been frozen out of the NAFTA talks on purpose.

“We’re not negotiating with Canada right now,” Trump said during a televised cabinet meeting.

“Their tariffs are too high, their barriers are too strong, so we’re not even talking to them right now. But we’ll see how that works out. It will only work out to our favour.”

Even after the trilateral negotiations resume, there are many tough sticking points that will need to be sorted out for the three partners to conclude talks that have lasted longer than a year.

This week, media outlets have also said the talks could have a new hurdle: how to address energy issues in a renegotiated NAFTA.

The Wall Street Journal, citing unnamed sources, reported that the incoming government of Mexican president-elect Andres Manuel Lopez Obrador wants energy investment rules kept out of any new NAFTA. Mexico’s current government, which is overseeing negotiations until Obrador takes office Dec. 1, has already agreed to such a chapter.

Energy, the Journal reported, was left out of the original NAFTA when it came into force 24 years ago because Mexico’s state monopoly on oil didn’t allow private investment in the industry. In 2013, however, the Mexican government opened up the industry to investment—a decision opposed by Obrador.