Sask. trade minister "concerned" over NAFTA talks

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If Canada doesn't agree to the new deal by Friday, the president said he will cancel the 24-year-old North American Free Trade Agreement in favor of what he called the U.S. -Mexico trade agreement.

These are expected to continue for Mexico despite the new trade deal between the two countries.

Donald Trump's administration is giving Canada until Friday to sign onto a bilateral trade deal between the USA and Mexico or be treated as "a real outsider" against whom punishing tariffs on autos will be imposed.

The outlines of a NAFTA 2.0 are now on paper, including new provisions on auto trade with higher percentage of locally-produced components, tougher worker protections and a provision to review the deal every six years.

Prime Minister Justin Trudeau said that the United States, Mexico and Canada may be able to come to an agreement by Friday.

Canadian and USA 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.

In March this year, Trump imposed tariffs of 25 percent on steel and 10 percent on aluminum imports from overseas.

"For free-trade economists that might be a black eye, but for the USA and Trump it must surely be seen as a major victory and validation of his extraordinary strong-arm tactics".

A senior administration official called the new U.S. -Mexico trade agreement "better in all respects" than "NAFTA 1.0".

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Mexico's Economy Minister Ildefonso Guajardo said he expected to rejoin his USA and Canadian counterparts for trilateral talks later Thursday of Friday. For Trump and other critics of NAFTA, the 1994 landmark deal might have helped companies trade more freely across national borders, but it also caused the gutting of the industrial Midwest.

The crucial phase of talks began Tuesday continuing late into the night, and Trudeau expressed optimism the countries could reach agreement by the end of the week.

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

"The clearest indicator that the market is viewing the U.S. -Mexico deal as a positive for Canada is the strengthening of the Canadian dollar", Benjamin Reitzes, BMO's Canadian rates and macro strategist, wrote in a note to investors following the announcement.

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.

"We need to get a deal, this is incredibly important for our economy, which is probably the most export-dependent in the entire country, and we've been concerned about a pattern we've been seeing - moving backward on market access, moving backward on trade access, not moving forward", he said, citing examples of Saskatchewan's worldwide market access shrinking.

What if Canada finds major problems in the deal and doesn't want to sign? "We're going to get rid of NAFTA because it has a bad connotation".

But Canadian Foreign Minister Chrystia Freeland cut a trip to Europe short so that she could rejoin the talks in Washington Wednesday. "If there are some who think they can go around Quebec ... there will be serious political consequences", Liberal leader and sitting premier Philippe Couillard said Wednesday, the Montreal Gazette reported.

Mexico agreed to eliminate a settlement system for anti-dumping disputes, NAFTA's Chapter 19. American negotiators know what Canada has already done on dairy in past trade deals: it gave the European countries greater access to the protected market in the Canada-EU trade deal, and it was willing to the do the same in the Trans-Pacific Partnership.