POLITICS
08/22/2018 14:55 EDT | Updated 08/22/2018 15:04 EDT

Chrystia Freeland 'Encouraged' By Reports Of U.S.- Mexico 'Handshake' Deal On NAFTA

Canadian officials say 2-way talks are necessary.

Chad Hipolito/CP
Foreign Affairs Minister Chrystia Freeland speaks to media at the cabinet retreat in Nanaimo, B.C., on Aug. 22, 2018.

OTTAWA — Canada's foreign affairs minister says she's "very encouraged" by signals from Washington that the United States and Mexico are close to figuring out their bilateral issues within the three-country North American Free Trade Agreement.

Chrystia Freeland said Wednesday that she's been in close contact — including this week — with her U.S. and Mexican counterparts throughout their two-way NAFTA talks, which are now in their fifth week. The issue of rules of origin on autos has been central to the summertime U.S.-Mexico discussions, she added.

"We are very encouraged by what we're hearing from our NAFTA partners," Freeland told reporters in Nanaimo, B.C., where she's participating in a retreat with colleagues from the Trudeau government cabinet.

"What we've agreed with the U.S. and Mexico is, once the work on those bilateral issues is done, then Canada is looking forward to joining the negotiation and a swift conclusion of the NAFTA negotiations."

There's optimism that U.S. Trade Representative Robert Lighthizer and Mexican Economy Minister Ildefonso Guajardo could conclude their face-to-face negotiations as early as this week — and open the door for Canada to re-enter the talks.

A report by Politico, based on information from unidentified sources, said the White House is expected to announce a "handshake" deal between the U.S. and Mexico on Thursday. U.S. President Donald Trump is expected to attend the announcement, the report said.

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Guajardo told reporters in Washington on Wednesday that he hoped to have a solution in "the next couple of hours, or couple of days." However, on the possibility of a handshake deal, Guajardo said it would have to involve all three countries.

"What we're doing here is trying to get and solve the issues that are most important between the U.S. and Mexico — that will lead to a trilateral meeting with Canada," he said.

"I think the handshake happens when everybody's done."

Some observers believe Ottawa has been sidelined from the NAFTA negotiations by the Trump administration and could find itself forced into deciding whether to accept a less-appetizing deal hashed out between the U.S. and Mexico.

But Canadian officials, as well as officials from the U.S. and Mexico, have insisted the two-way NAFTA talks are necessary before the three-party talks can resume.

'Canada will very much have a voice'

"NAFTA is a trilateral agreement, but inside that agreement there are a lot of issues that are chiefly bilateral and that is what they're focused on," Freeland said.

The rules of origin on cars is an issue that concerns all three countries and it's an area where detail matters, she added.

"And Canada will very much have a voice in the finalization of all of this," Freeland said.

Last week, Trump suggested that Canada had deliberately been frozen out of the NAFTA talks.

"We're not negotiating with Canada right now," Trump said during a televised cabinet meeting.

"Their tariffs are too high, their barriers are too strong, so we're not even talking to them right now. But we'll see how that works out. It will only work out to our favour."

Even after the trilateral negotiations resume, there are many tough sticking points that will need to be sorted out for the three partners to conclude talks that have lasted longer than a year.