Canada reaches 11th-hour NAFTA deal with U.S., Mexico

Canada reaches 11th-hour NAFTA deal with U.S., Mexico

The United States and Canada forged a last-gasp deal on Sunday to salvage a three-country, $1.2 trillion open-trade zone agreement with Mexico that had been about to collapse after almost a quarter century.

Ultimately, Ujczo said he expects Canada and the U.S.to reach a so-called "side letter" to the main deal that would resemble a similar agreement reached last month between Mexico and the USA which preserves duty-free access to the US market for vehicles that comply with the agreement's rules of origin.

NAFTA tore down most trade barriers between the United States, Canada and Mexico, leading to a surge in trade between the three countries.

U.S. farmers will have access to about 3.5% of Canada's dairy market, Reuters reported, citing sources.

Additionally, Mexico will get an auto parts quota of $108 billion annually, while Canada will get a parts quota of $32.4 billion annually in the event of US autos tariffs.

Earlier Sunday, David MacNaughton, Canada's ambassador to the United States, had said there was "lots of progress, but we're not there yet", before heading back to Washington from Ottawa.

United States and Canadian negotiators have been negotiating around the clock this weekend to make a Sunday midnight deadline that would allow the countries to sign the deal as the final act before Mexico's outgoing President Enrique Pena Nieto leaves office at the end of November. However, the deal is expected to contain key provisions on Canada's dairy industry and auto exports to the US.

Mr. Trump had said he wanted to go ahead with a revamped NAFTA - with or without Canada. "We still have a couple of tough issues, so we're doing our best".

"It would be a monumental mistake to do this without Canada", U.S. Senator Ron Wyden of OR, the top Democrat on the Senate committee that oversees trade, said Friday, before the text was delivered. "It's been very bad for the United States, it's been great for Canada, it's been great for Mexico - very bad for us".

The US and Canada came to an agreement Sunday to tweak key pieces of the North American Free Trade Agreement, known as NAFTA.

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"They're in the final strokes", said the person, based on information from USA administration officials.

Among other things, the negotiators battled over Canada's high dairy tariffs.

The timeline of the notification period has provided urgency to spearhead a NAFTA deal through Congress and onto the desk of Mexican President Enrique Peña Nieto before President-Elect Andrés Manuel López Obrador takes office in December.

Canada also agreed to a quota of 2.6 million vehicles exported to the United States in the event that Trump imposes 25 per cent global autos tariffs on national security grounds, Canadian and USA auto industry sources said.

Robert Lighthizer, US trade representative, and Chrystia Freeland, Canada's foreign minister, both declared victory.

"There's just a lot going on, and not a lot of time to do it in....at the end of the day, US negotiators are agreeing, but it still has to be the president that signs off, and who knows where he is on things".

"The ideal is a trilateral deal, but we're prepared for the possible need of a bilateral", he told Bloomberg News.

Any agreement requires the approval of both Trudeau and U.S. President Donald Trump. They suspected that Canada, which had said it wasn't bound by USA deadlines, was delaying the talks until after provincial elections Monday in Quebec, where support for Canadian dairy tariffs runs high.

The three countries began renegotiating NAFTA more than a year ago at the behest of Trump, who savaged the deal as a presidential candidate and says it has been a "rip-off" for the United States that has cost the country manufacturing jobs.

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