Freeland in a divided Washington for new NAFTA talks with U.S. and Mexico

OTTAWA — Deputy Prime Minister Chrystia Freeland wrapped up a meeting Wednesday in the American capital aimed at finding the bipartisan agreement needed to finalize a new North American trade deal saying they continue to make progress.

The session involved U.S. Trade Representative Robert Lighthizer and Mexican Undersecretary for North America Jesús Seade.

“Today it was a good meeting, good work has been done,” Freeland said after a session that lasted about an hour.

Freeland said she will continue to be in close communication with her counterparts during the next few days, but suggested no talks were planned on Thursday, when Americans celebrate Thanksgiving Day.

She declined to confirm whether she would be hosting Seade in Ottawa, even though the Mexican official said he planned to be there Friday.

Officials from the continent’s three countries held talks earlier Wednesday in Washington on the final obstacle to ratifying the new United States-Mexico-Canada Agreement ahead of the U.S. Thanksgiving holiday weekend — a sign of the dwindling American legislative calendar.

Freeland, who is the lead minister for the renegotiation of the North American Free Trade Agreement, started her day with a federal cabinet meeting in the Ottawa area.

Canadian government officials, speaking on the condition of anonymity because of the sensitivity of the situation, said Canada’s acting ambassador Kirsten Hillman and chief trade negotiator Steve Verheul represented Canada in talks earlier in the day.

But Freeland had been in close contact with Lighthizer, speaking on the phone with him Tuesday and Wednesday, said officials.

Mexico is the only country to legally approve the deal, while Canada is waiting on the U.S. Congress to make its first move towards ratification. Officials say Canada’s approach remains the same — it will only move “in tandem” with the U.S.

Freeland said she respects the domestic ratification process in each country.

“Where we can be a supportive partner, we are very happy to do that, and that is why we are here,” she said after the meeting in Washington.

Seade said only that the meeting was “good” because “we make constant progress.”

The American Thanksgiving holiday was seen by many as one of the last reasonable opportunities for U.S. lawmakers to practically dispatch with USMCA amid the broader impeachment drama engulfing President Donald Trump, and the looming political shift ahead of the November 2020 presidential election. Trump has levelled scathing criticism on the Democrats for blocking progress on the trade deal by focusing on impeachment.

Democrats control the House of Representatives and have negotiated with Lighthizer for months to strengthen several of the deal’s provisions, including improved labour standards to ensure that Mexico’s much-promised workplace reforms can be enforced.

During the long and at times acrimonious renegotiation of NAFTA, Canadian and American negotiators pushed Mexico to improve labour standards to prevent companies in the manufacturing and auto sectors from relocating to where employers can pay them far less. Now, the Americans want to make sure those changes have teeth.

That could come in an addendum or side letter to the USMCA. As for the core text of the deal, Canada has maintained it considers that signed and sealed, not to be re-opened for further negotiations.

Nancy Pelosi, the Democratic House leader who controls the introduction of a ratification bill, said earlier this week she and Lighthizer “were within range of a substantially improved agreement for America’s workers.” But she added that she wanted Lighthizer to put that in writing “for final review.”

Pelosi has said she wants a new deal finalized by the end of the year.

Observers in the U.S. and Canada are not that optimistic.

Dan Ujczo, an Ohio-based trade specialist with the law firm Dickinson Wright who has closely followed of the trade talks, said he believes House Democrats and the Trump administration “have a handshake deal that is being firmed up in writing” that should be made public soon.

“We expect the see the full contours of that deal, including any objections by Mexico, next week. This is progress in the process,” he said.

But, he added, it is unlikely that Congress ratifies USMCA before the end of this year.

“There is a chance this can stitch together quickly if everything falls right. But there is no objective evidence that can happen during impeachment and resolving spending issues before the holiday break. It is going to be a long December.”

Brian Kingston, vice-president of the Business Council of Canada, said he is less concerned about making progress by Thanksgiving than in seeing the deal clear Congress before U.S. lawmakers are diverted to the partisan politicking of the 2020 presidential race.

“There’s a window for getting House Democrats and USTR to agree on the changes that have been made. There’s a window for getting Canada and Mexico to have a look at the text and get their sign-off on what’s been negotiated. I’m not sure there’s a window to get a vote in Congress with eight days left on the calendar,” said Kingston.

“That would be a monumental effort.”

— With files from AP

This report by The Canadian Press was first published Nov. 27, 2019.

Mike Blanchfield, The Canadian Press

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