NAFTA negotiations: Canada and Trump administration at impasse

National flags representing the United States Canada and Mexico fly in the breeze

Even so, Lopez Obrador said "the negotiation is not closed" between the United States and Canada, and said he had received information that the Trump administration has made a new counterproposal to Ottawa.

Several Democrats questioned whether the Trump administration has the legal authority to proceed with a Mexico-only deal when prior notifications under the "fast-track" trade negotiating authority law were for a trilateral deal including both Mexico and Canada.

According to a readout of the call from the Prime Minister's Office, the two men "agreed to work closely together to further strengthen the dynamic partnership between Canada and Mexico", and "discussed NAFTA and the mutually beneficial economic and trading relationship between our two countries".

A senior Canadian government official said they are making progress in the talks but said it's not certain that they will reach a deal soon.

Lopez Obrador, widely known as "AMLO", has been actively involved in the negotiations to update the trade agreement.

Ujczo said the two sides have also largely settled on a dispute-resolution mechanism similar to that in the original NAFTA known as Chapter 19 - an issue that has always been a major stumbling block in the talks - and on a higher duty-free threshold for goods shipped into Canada: $100, up from $20.

Trudeau said existing USA tariffs on Canadian steel and aluminum in late May would have to be scrapped before Canada felt comfortable signing a new NAFTA.

"The clock is ticking on Canada", he said on Saturday.

After three-way talks stalled this summer, the USA and Mexico last month announced they had reached a separate deal. Or perhaps correction of the imbalance of trade that already favours the United States?

Canadian negotiators are still meeting behind closed doors with US counterparts.

"We're very unhappy with the negotiations and the negotiating style of Canada".

Trump made it clear Canada's failure to join would be unacceptable, with hefty auto tariffs as a effect.

"The threats to Canada are much bigger than a potential zombie Nafta; the threats come in the form of auto tariffs that would be very devastating to our economy", said Meredith Lilly, trade adviser to Canada's former prime minister, Stephen Harper, and now Simon Reisman Chair in International Affairs at Carleton University in Ottawa.

Speaking to reporters this morning in Ottawa, Trudeau disputed Trump's statement - insisting Canada did not request a meeting with the president this week.

One US industry source in contact with US negotiators told the Canadian paper that Washington was "serious" about enforcing the Sunday deadline, having repeatedly missed other cut-off dates during the tortuous negotiations. The administration had set a weekend deadline for Canada to join, a schedule created to allow Mexican President Enrique Peña Nieto to sign the deal before leaving office and being succeeded by incoming President Andres Manuel Loprez Obrador. The U.S. had given Canada until Sunday to join the new deal or watch as the U.S. and Mexico went ahead without it.

The U.S. and Canada have been hung up on some core issues.

Mexico also secured an exemption from U.S. Mexican-made products were hit by both of those actions aimed at protecting USA producers from import surges. They only said they didn't request a formal meeting.

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