Canada Reiterates It Won't Take Just Any Deal With US After Explosive Leak

Canada's Foreign Minister Chrystia Freeland told reporters on Aug. 31 that work remains to be done on a trade deal with the U.S. "We're looking for a good deal, not just any deal," she said. "We will only agree to a deal that is a good deal for Canada. We're not there yet." The U.S. had planned to notify Congress of a deal with Mexico on Aug. 31 and hopes to include Canada (see 1808280033).

Meanwhile, The Toronto Star published a story about President Donald Trump's off-the-record remarks to Bloomberg, which the story said Canadians confronted the American negotiators with. Trump reportedly said any deal would be on American terms, and that he would make no concessions. He asked that the remarks be off the record, because if they were public it would kill the Canadian government's ability to strike a deal. He also said he instructed his negotiators to flash a picture of a Chevrolet car built in Canada every time the Canadians pressed for one of their priorities. A spokesperson for the Office of the U.S. Trade Representative said that negotiations with Canada "are ongoing" and "there have been no concessions by Canada on agriculture." Those comments were notable as the first official update from the USTR on the talks since the latest discussions with Canada began (see 1808290005).

Dan Ujczo, head of Dickinson Wright's U.S.-Canada practice, said that even if a deal were reached on Aug. 31, tariffs on autos and auto parts are coming. He predicted that the Canadians would get a quota, similar to the arrangement underway with the Mexicans, reported by The Wall Street Journal.

If eventually a revised NAFTA goes to Congress, the White House may find support from labor unions that have traditionally been free trade agreement skeptics. Jerry Dias, president of the Canadian UNIFOR trade union, said the tentative auto rules of origin, particularly the wage component, "will at least stop the migration of jobs from Canada and the United States to Mexico. ... I really do believe it will stop the bleeding in the auto industry." He said that he's become more comfortable with the enforceability of the labor chapter. "It appears they're really going to start to deal with protection agreements." He also said Unifor has had many discussions with American unions who understand putting tariffs on Canadian autos makes no sense and will hurt US auto jobs.