U.S. and Canada met to continue negotiations around NAFTA

The U.S. and Canada met to continue negotiations around the North American Free Trade Agreement (NAFTA) and it appears Canada is ready to give concessions on access to its dairy market.According to Jim Wiesemeyer, Pro Farmer Washington policy analyst, Canada may agree to change one rule that blocked U.S. producers from exporting ultrafiltered milk to Canada, and also offer U.S. a percentage of its dairy market.The Trump administration says it will give Canadian negotiators until Friday to work out a deal, including issues around dairy trade, but it may be September before a final deal is reached between the U.S. and Canada.It appears that the U.S./Mexico Trade Agreement signed earlier this weekwas a spark to get negotiations moving.“Canadian officials are surprised and perplexed over Mexico’s recent ‘gives’ in reaching a preliminary bilateral trade deal with the Trump trade team,” Wiesemeyer says. Much of the motivation for Canada to move on a trade deal with the U.S. centers on automobiles. President Trump has threatened to impose 25% auto tariffs on Canada if negotiators are unwilling to compromise on sensitive issues, Wiesemeyer says.An agreement between the U.S. and Mexico was signed earlier this week. Without Canada as part of the agreement, Wiesemeyer says the chances of the deal being approved by Congress would diminish. With Canada potentially on board, he says there are “better odds” of Congressional approval. “Ideally we’ll have Canada involved,” says Robert Lighthizer, U.S. Trade Representative. “If we don’t have Canada involved, we will notify [Congress] that we have a bilateral agreement that Canada is welcome to join.” Mexico, which for months has said that a new NAFTA must include Canada, has changed its tune, Wiesemeyer says.  Mexican Foreign Minister Luis Videgaray said that there will be a trade agreement between the U.S. and Mexico “regardless of what happens with Canada.”The administration is trying to get this and other trade deals through Congress before the November election. There is a sense that Democrats will gain more seats, if not the full majority at least in the House, and Democrats have historically have been less willing to accept free trade agreements.