NAFTA negotiations continue in Washington as Friday goal nears

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The upbeat tone contrasted with Trump's harsh criticism of Canada in recent weeks, railing on Twitter against Canada's high dairy tariffs that he said were "killing our Agriculture!" That said, the announced agreement between the U.S. and Mexico is not a bilateral agreement either.

"The prime minister had a constructive conversation today with President Trump regarding the North American Free Trade Agreement." - statement from the office of Prime Minister Justin Trudeau. It was her first in-person NAFTA meeting with Lighthizer since the spring.

Freeland told reporters after the meeting she and her team plan to work this week in "a full-steam effort" and said both parties will start diving into specific issues Wednesday morning.

Foreign Affairs Minister Chrystia Freeland, emerging Wednesday evening from her second meeting of the day with her USA counterpart, said officials would be working late into the night - and possibly all night - on potential "landing zones" where both parties can agree.

A senior administration official called the new U.S. -Mexico trade agreement "better in all respects" than "NAFTA 1.0". They also agreed that 75 per cent of automobile content would come from within North America, an increase from the current 62.5 per cent.

There may be other ways for Canada to conclude a NAFTA deal, however, if this renewed push is not successful over the next 36 hours or so.

But Canadian Foreign Minister Chrystia Freeland cut a trip to Europe short so that she could rejoin the talks in Washington Wednesday.

Freeland is expected to travel to Washington for talks Tuesday, spokesman Adam Austen said. "And that, they know, is a red line for us", the official said.

There is some urgency as the USA seems keen to have the issue resolved before the November midterm elections, and Pena Nieto wants to sign before handing the reins over to Lopez Obrador on December 1.

Reitzes notes that while the U.S. -Mexico agreement provides some optimism that a deal can be reached with Canada, there is no indication that the Bank of Canada will see this as justifying a rate hike next week. On Tuesday, Trudeau said he would defend Canada's dairy farmers.

The White House is pushing to finalize things quickly so that outgoing Mexican President Enrique Pena Nieto can sign the treaty before handing the reins over to President-elect Andres Manuel Lopez Obrador on December 1.

Canadian and US negotiators have a number of differences they need to resolve, including disagreements over dairy policy, the process for resolving trade disputes and intellectual property protection rules.

Pickup trucks, which also account for a significant proportion of Mexican auto exports, were a "very different animal", Guajardo said. President Trump has called Prime Minister Trudeau weak and dishonest.

Two of Donald Trump's top lieutenants turned up the heat on Canada to open up the protected sector that the US president has repeatedly attacked.

The Mexico-U.S. discussions focused on crafting new rules for the automotive industry, which Trump has put at the heart of his drive to rework the pact he has repeatedly described as a "disaster" for American workers. "We're going to get rid of NAFTA because it has a bad connotation". So has the U.S. business lobby, including the U.S. Chamber of Commerce.

The terms of the U.S. -Mexico deal are still being interpreted and there are many unanswered questions, especially on measures to settle disputes. (Peña Nieto called it NAFTA.) After a politically brutal week, Trump was claiming victory.

He then delivered his ultimatum to Canada.

The deal must be reviewed by Congress and can not be finalized until at least November.

Another major surprising development regarding the new U.S. -Mexico trade deal is that the U.S.' steel and aluminum tariffs on imports from other countries will remain.

- With files from Mike Blanchfield in Ottawa and Peter Rakobowchuk in Longueuil, Que.