OTTAWA-Canadian and US officials worked late into the evening Sunday in a drive to come up with a legal agreement that would allow Canada to join Mexico in a three-way free trade pact with the United States.
Just hours before a midnight deadline, the United States and Canadian governments agreed to a deal that would allow USA farmers greater access to Canada's dairy market and address concerns about potential U.S. auto tariffs, officials from both countries said.
Canada fought hard to retain Chapter 19, a holdover from NAFTA that USA trade ambassador Robert Lighthizer fought tooth and nail to eliminate. Mexico's undersecretary of foreign trade, Juan Carlos Baker, was expected to present the texts of the agreement to the Mexican senate just before midnight.
Under the agreement Canada has agreed to eliminate its Class 6 and Class 7 milk categories and associated pricing schedules for skim milk, skim milk proteins and other components and ultrafiltered milk, within 6 months after the USMCA goes into force.
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Mr. Trump had said he wanted to go ahead with a revamped NAFTA - with or without Canada.
Canada and Mexico are two of the biggest trading partners with the United States.
On dairy the official said Canada essentially gave the USA the same access it offered in the Trans Pacific Partnership trade agreement that President Trump rejected.
Negotiators from both sides spent two days talking by phone as they tried to settle a range of hard issues such as access to Canada's closed dairy market and USA tariffs.
The countries also appear to have reached an understanding that would protect Canada from the threat of automobile tariffs, which Trump has routinely threatened, though it is not clear how far those protections would extend.
There was also an agreement to protect 2.6 million exports a year of Canadian vehicles to the USA from possible United States tariffs of 25% that Mr Trump may impose.
US stock index futures rose, with S&P 500 Index e-mini futures up more than 0.5 percent, suggesting the benchmark index would open near a record on Monday.
U.S. business groups oppose turning NAFTA into a bilateral deal because the three nations' economies have become closely intertwined since the original pact came into force in 1994.
The US and Mexico were pushing to get the new deal through their legislatures before Mexican President-elect Andres Manuel Lopez Obrador takes office on December 1.
While no official joint statements are immediately forthcoming, word is coming from anonymous sources that a final deal is being inked, and the CAD has rebounded even before word of a final deal began to surface, with CAD lurching forward against the US Dollar as repeated announcements that the two sides were "close" to reaching a deal continued to leak out over the weekend, and Monday sees the CAD in a firmly bullish stance as traders anticipate a successful rework of NAFTA.
U.S. and Canadian negotiators have been negotiating around the clock this weekend to make a Sunday midnight deadline that would allow the countries to sign the deal as the final act before Mexico's outgoing President Enrique Pena Nieto leaves office at the end of November.
"My thanks for your advice and support", Trudeau posted in a statement on Twitter, stating he'd spoken to David McKay, president and CEO of the Royal Bank of Canada; Victor Dodig, CIBC president and CEO; Scotiabank president and CEO Brian Porter; BMO financial group CEO Darryl White and TD president and CEO Bharat Masrani.
President Donald Trump has said he wants to go ahead with a revamped NAFTA - with or without Canada. The president said he had rejected a meeting with Trudeau because of Canada's high tariffs, though Trudeau's office said no meeting had ever been requested. Vehicles imported to the United States from Mexico contain almost 20 to 30 percent US content. That followed a testy meeting in June, when Trump accused Trudeau of being "dishonest".