REPORT: Canada & U.S. Reach NAFTA Deal Say Sources

Early indications are that the deal will expand U.S. access to the Canadian dairy market, preserve the Chapter 19 dispute resolution mechanism, while not giving Canada clear exemptions from steel and aluminum tariffs.

Sources in both Canada and the U.S. say a deal has been reached on the North American Free Trade Agreement.

It is expected that a full text of the agreement will be released close to the midnight deadline.

There are indications that the most relevant parts of the agreement are as follows:

  • Canada will not be automatically exempted from tariffs on steel and aluminum, though an exemption from auto tariffs is expected.
  • The Chapter 19 dispute resolution mechanism will be preserved.
  • The U.S. will get expanded access to the Canadian dairy market, through a loosening of the import quotas imposed under the Supply Management system.

If the agreement adheres to these early indications, it is expected that both the Trudeau government and the Trump administration will have things they can attempt to spin to their political advantage.

Trump will say he got more access for U.S. dairy producers, while Trudeau will claim that he preserved Chapter 19 and refused to totally dismantle supply management.

However, Trudeau will likely face questions about how secure Canada is from future tariffs, and whether tariff threats will be used as further leverage going forward.

Spencer Fernando

Photo – YouTube