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Can Canada And The U.S. Find A Path To Replace NAFTA?


No deal - at least not yet - between the U.S. and Canada. After days of negotiation, they missed today's deadline to come to an agreement on trade, and they expect to pick up talks again next week. Meanwhile, the Trump administration says it is moving forward with a trade deal it struck with Mexico and leaving the door open for Canada to join that agreement if it chooses.

The negotiations have been tense, and they got tenser today when a Canadian news outlet reported comments from President Trump insisting that any deal with Canada must be done totally on U.S. terms.

NPR's Scott Horsley joins us now to talk about all of this. Hey, Scott.


CHANG: So negotiators for Canada and the U.S. have been working virtually nonstop this week to get a deal - still no deal. What is happening?

HORSLEY: You know, we heard phrases like constructive, progress, but we did not hear, we've got a deal. The administration began this week with an announcement from President Trump and his Mexican counterpart that they had a handshake agreement. They kind of hoped to get to the same place with Canada by the end of the week, but they just didn't get there - no hope for a breakthrough but not exactly a breakdown. The two sides are going to be back at the bargaining table next week.

CHANG: So today was supposed to be the deadline for reaching an agreement. I'm guessing it was not a hard and fast deadline.

HORSLEY: It was something of a self-imposed deadline. The White House wanted to send notice to Congress today so that lawmakers would have 90 days to review a tentative agreement before Mexico's president is set to leave office. What the White House is going to do is they're going to go ahead and send that notice to Congress, saying, we've got a deal with Mexico, and Canada can certainly join on if they want to. Officials in Canada are not ready to go to that point just yet. Here's Canadian Foreign Minister Chrystia Freeland.


CHRYSTIA FREELAND: I'm paid in Canadian dollars. And my job is to ensure that this agreement works for Canadian workers, Canadian families and Canadian business. The government of Canada will not sign an agreement unless it's good for Canada and good for Canadians.

CHANG: So what are still the sticking points between the U.S. and Canada?

HORSLEY: The two sides have been tight-lipped about exactly where the negotiations stand, but we believe the roadblocks are the same as they've always been. The U.S. wants Canada to scrap some of its protectionist measures for the dairy industry. President Trump often complains about that, and he did so again today in North Carolina.


PRESIDENT DONALD TRUMP: I love Canada, but they've taken advantage of our country for many years. They have tremendous, tremendous trade barriers, and they have tremendous tariffs.

HORSLEY: For its part, Canada wants the U.S. to preserve an arbitration process that's in NAFTA that allows Canadian firms to challenge American tariffs when they're put in place. The American side wants to scrap that process.

CHANG: OK. And as we mentioned, the president injected some extra drama in these negotiations today with some comments he made yesterday that were supposed to be off the record. What did he say exactly?

HORSLEY: He was giving an interview to Bloomberg News. And parts of that interview were off the record but were later picked up and reported by a Canadian outlet, the Toronto Star, with Trump blasting that newspaper for publishing his off-the-record remarks but in the process sort of confirming that he'd said them. And what he said was that if there is a deal to be done with Canada, it will have to be strictly on U.S. terms, essentially saying there's no room for compromise.

Minister Freeland was asked bluntly this afternoon, how do you negotiate with somebody like that who's not willing to compromise? She answered diplomatically. She said her counterpart at the bargaining table, U.S. trade representative Robert Lighthizer, has been acting in good faith. At the same time, Freeland stressed there's going to have to be more flexibility on all sides to get to a deal that's truly win-win.

CHANG: All right, that's NPR's Scott Horsley. Thanks, Scott.

HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.