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NAFTA deal could come as early as this evening, sources say

01 October 2018

Even Prime Minister Justin Trudeau has been reportedly pulled into the fray: on what's usually a personal day, his itinerary said he'd be spending Sunday in "private meetings".

It will be clear within 48 hours if Canada will remain a side to the North American Free Trade Agreement (NAFTA), which is being reworked by Ottawa, Mexico City and Washington, Mexican Economy Minister Ildefonso Guajardo said. "We don't like their representative very much".

One of the sources said Canada would take nothing for granted until Trump had signed off on the deal.

Canadian and USA negotiators are close to wrapping up a final NAFTA deal by early evening but the details may not be known until Monday. The U.S. president stayed seated as he extended his hand for a cursory handshake. President Donald Trump has threatened auto tariffs in the event a deal can't be reached.

Mexico's new president-elect, however, said in an interview Friday that he has agreed to push the American side to make a deal with Canada.

President-elect Andres Manuel Lopez Obrador said Prime Minister Justin Trudeau asked him during a Thursday phone call "to intervene and call on the US government to reach an agreement" with Canada on the renegotiation of NAFTA.

U.S. Trade Representative Robert Lighthizer - Freeland's counterpart at the talks - on Tuesday had complained Canada was not making enough concessions and said time was running out.

So-called Chapter 19 dispute panels, which the USA wants to eliminate from Nafta and which Canada wants to preserveAn exemption for cultural sectors which Canada wants to preserveThe use of Section 232 investigations to apply tariffs to steel, aluminum, and potentially autos.

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Canada is the second-biggest trading partner of the USA, and Mexico is the third.

"The Americans are finding that the negotiations are tough because Canadians are tough negotiators, as we should be", the prime minister told reporters in Ottawa. The 1994 pact underpins $1.2 trillion in annual trade and its demise would be enormously damaging, say economists.

Relations between the Canadian and US leaders have been chilly since June, when Trump left a Group of Seven summit in Canada and then accused Trudeau of being dishonest and weak.

Mexico on Friday evening will publish the text of its trade agreement with the USA, giving the public its first in-depth look at a deal that would replace NAFTA - and potentially exclude Canada, amid a call from Mexico's incoming leader to preserve the three-country pact. He was asked twice if he'd quit the current NAFTA pact, and didn't say.

One solution might be to imitate the provisions of the bilateral Mexico-U.S. deal on NAFTA.

Mexican Foreign Minister Luis Videgaray in recent days has raced the clock to bridge the gaps between the US and Canadian sides, the official said.

Lawmakers briefed by Lighthizer said he told them the earliest a vote could occur, either on a U.S. -Mexico deal or a trilateral deal including Canada, would be February or March 2019, after the U.S. Congress elected in November is sworn in.

"The notion of countries signing a trade agreement at different times is not new", said Lori Wallach, head of Public Citizen's Global Trade Watch. Or perhaps correction of the imbalance of trade that already favours the United States?

NAFTA deal could come as early as this evening, sources say