zerohedge August 31, 2018

Canadian Foreign Affairs Minister Chrystia Freeland held a press conference at 1630ET to confirm the next steps in US-Canada trade talks pointing out that she believes US is negotiating with good faith (dismissing the US media’s assumptions from Trump’s leaked comments).

Freeland added that “Canada will only sign a pact that benefits Canadians,” adding that “a win-win-win agreement is within reach.”

She also noted that she has agreed with USTR Lighthizer that she will not negotiate in public, adding that “progress has been made, but there is more work to be done.”

Then a reporter asked the question very directly “how can you possibly negotiate with a guy like Donald Trump?” to which she diplomatically shrugged off the remarks and focused on the gains she has made.

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Summary:

  • In an anticlimatic conclusion to the week’s top trade event, talks between the U.S. and Canada ended Friday without a deal on a new North American Free Trade Agreement, but the two parties were said to have made “some progress” and  discussions are expected to continue next week.

  • The Trump administration had given Canada until Friday to join a preliminary deal it reached earlier in the week with Mexico or risk being left out.

  • Canadian Foreign Affairs Minister Chrystia Freeland is expected to brief reporters at 4:30 p.m. local time on Friday at the Canadian Embassy in Washington. She has been in Washington since Tuesday in an accelerated push to reach an agreement with the U.S. over revamping Nafta, after the US reached a bilateral deal with Mexico on Monday.

  • The White House has issued a letter from President Trump to the House speaker and the president of the Senate about negotiations with Mexico and Canada on trade agreements.

TEXT OF A LETTER FROM THE PRESIDENT TO THE SPEAKER OF THE HOUSE OF REPRESENTATIVES AND THE PRESIDENT OF THE SENATE

August 31, 2018

Dear Mr. Speaker:

On May 18, 2017, my Administration notified the Congress that I intended to initiate trade negotiations with Canada and Mexico.  Negotiations began on August 16, 2017.  Since that time, my Administration has worked hard with Mexico and Canada to reach a modern trade agreement that sets high standards for free, fair, and reciprocal trade.

I am pleased to report that in only 1 year, we have made dramatic progress toward such an agreement:

  • It will help American farmers by ensuring fairer market conditions and improved market access for United States agricultural products.

  • It will create a more level playing field for American workers — due in part to improved rules of origin for automobiles, trucks, and other products.

  • It will include the toughest and most comprehensive labor and environmental rules of any United States trade deal.  For the first time in North America, those rules will be enforceable — and they will be strictly enforced.

  • It will encourage innovation by providing new and improved protections for United States intellectual property.

  • It will contain the strongest disciplines on digital trade of any international agreement, and will provide a firm foundation for the expansion of trade in innovative products and services.

  • It will create a more level playing field for American service industries, including the critical sector of financial services.

  • It will provide the most robust protections against currency manipulation of any United States trade deal.

  • It will give United States policymakers new weapons against the harmful, market-distorting effect of state‑owned enterprises on private companies.

In short, this agreement is a great deal for the American people.  It sets a new tone for all trade agreements, proof of the high standard that my Administration will require of any country entering a new trade agreement with the United States.

I intend to enter into the agreement by the end of November 2018.  Accordingly, pursuant to section 106(a)(1)(A) of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (Public Law 114-26, Title I), I hereby notify the House of Representatives and the Senate that I intend to enter into a trade agreement with Mexico — and with Canada if it is willing, in a timely manner, to meet the high standards for free, fair, and reciprocal trade contained therein.

My Administration looks forward to continued collaboration with the Congress to develop legislation to approve and implement this agreement.

Sincerely,

DONALD J. TRUMP

* * *

Update 2: As we noted earlier, Trump’s “hard” Friday deadline was really rather soft, and as Bloomberg reports, the trade talks will resume next Wednesday.

  • *U.S.-CANADA NAFTA TALKS SAID TO RESUME NEXT WEDNESDAY

But there was good news according to Reuters:

  • NAFTA TALKS SAID TO HAVE MADE SOME PROGRESS ON CORE ISSUES

And USTR Lighhizer confirms that talks “were constructive” and will continue, and the intention is to sign a trade agreement in 90 days.

  • USTR LIGHTHIZER SAYS TRADE TALKS WILL CONTINUE WITH CANADA
  • LIGHTHIZER SAYS CANADA TRADE TALKS CONSTRUCTIVE, MADE PROGRESS
  • U.S. TRADE REPRESENTATIVE SAYS INTENTION WOULD BE TO SIGN TRADE AGREEMENT IN 90 DAYS: RTRS

Meanwhile as the WSJ notes, the failure of the two countries to bridge their differences this week means that President Trump is expected to send a formal notice to Congress later Friday stating that he is still intends to sign a revised version of the North American Free Trade Agreement by late November. That statement is likely to say he is willing to proceed only with Mexico, but that he is also open to continuing negotiations with Canada.

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Update: No deal.

If it was Trump’s intention to scuttle the US-Canada trade talks with the Bloomberg “leak” he succeeded: the WSJ reports that Nafta talks between the US and Canada ended with no agreement

  •  U.S.-Canada Talks Break Up With No Friday Agreement — Sources
  • Trump Is Expected to Notify Congress of Plans to Proceed with Mexico-Only Deal to Replace Nafta — Sources
  • Trump Announcement Is Expected to Suggest Canada Can Still Join Revised Nafta — Sources

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Earlier

After several days of negotiations, and just hours before the deadline, Reuters reports the the Nafta trade talks between the US and Canada have concluded.

  • U.S.-CANADIAN TRADE TALKS HAVE CONCLUDED -CANADIAN OFFICIAL: RTRS
  • CANADA’S FREELAND HAS LEFT USTR AFTER TALKS WITH LIGHTHIZER

Reuters adds that Canadian Foreign Minister Chrystia Freeland will hold a press conference at 4:30pm (after the close).

It was unclear if a deal has been reached, although some speculate that if there was a deal, the press conference would include the US, and not just Canada, which “usually means bad news.”

Others have suggested that a deal may not have been reached and the talks will continue into the weekend.

The CAD is generally unchanged on the news.

More at 4:30pm when Freeland speaks.