NAFTA deal must end Canada's milk protein scheme

Donald Trump listens to the opening prayer during Air Force Technical Sergeant John Chapman's Medal of Honor ceremony at the White House

Donald Trump listens to the opening prayer during Air Force Technical Sergeant John Chapman's Medal of Honor ceremony at the White House

Canada and the United States will restart high-level talks Tuesday on the North American Free Trade Agreement as Foreign Affairs Minister Chrystia Freeland returns to Washington in hope of making progress on stubborn differences.

Trudeau and his ministers will hold a caucus retreat in Saskatoon, Saskatchewan, to plot their strategy.

The two sides must submit an agreed-upon text to the U.S. Congress by October 1 in order to join the agreement the U.S. with Mexico last month.

Dairy trade is one of the final sticking points as part of the NAFTA talks between the USA and Canada.

Under that system, the US exports about $500 million of dairy products duty free to Canada - three times what it imports from here - but faces tariffs of up to 300 per cent for anything more.

The trade talks were overshadowed in Washington by the anniversary of the terrorist attacks of September 11, 2001, and Freeland took the opportunity to tout the importance of the US-Canada relationship.

But if anything has encapsulated the shift since then, it has been the hard renegotiation of the North American Free Trade Agreement, which has dragged on for some 13 months already - and is only one part of the ongoing cross-border trade dispute. They are aiming to complete a deal by the end of the month so that Mexico, Canada and the U.S. can sign an agreement by the end of November.

While President Trump has promised "punitive tariffs" if a deal is not reached, Trudeau says that Canada will not bend to threats.

Yet, he stressed that "if we sign the deal it'll be. for Canada and Canadians".

The two sides have so far been unable to break an impasse over, among other issues, USA access to the Canadian dairy market, a cultural exemption for Canada and the Chapter 19 dispute resolution mechanism.

Mulroney acknowledged U.S. Trade Representative Robert Lighthizer is on a short leash from the White House when it comes to what he can offer in the talks, but noted that Trump trusts Lighthizer a lot.

"And one of the things that I think we are accomplishing in this agreement is a better deal for Canadian and USA workers in the auto sector".

"At the end of the day, we're neighbors", Freeland said. "I think it will be gone".

Speaking to reporters in Ottawa following an event at the Library and Archives, Brian Mulroney said he would be "surprised" if a new NAFTA deal did not see some concessions around supply management.

As the process grinds on, some in Washington insist Trump can not pull out of NAFTA without the approval of Congress.

"We have been very clear on that, that there can not be more access given", Wiens said in a telephone interview.

President Donald Trump has made it very clear that American farmers are a priority, Mulroney said - adding Trump needs a "victory" for them. "He's railed against this thing (NAFTA) and they've been at the negotiating table for now over a year".