09/05/2018 14:41 EDT | Updated 09/05/2018 15:29 EDT

NAFTA Talks: Canada, U.S. Fight It Out Over Super Bowl Ads

Of all the sticking points to hold up a trade deal...

Christinne Muschi / Reuters
Prime Minister Justin Trudeau (right) meets with U.S. President Donald Trump during the G7 Summit in La Malbaie, Que., June 8, 2018. Canada's decision to allow the broadcast of glitzy American Super Bowl commercials has quietly festered at the NAFTA talks.

WASHINGTON — While Donald Trump has waged a public war with defiant National Football League players, Canada's decision to allow the broadcast of glitzy American Super Bowl commercials has quietly festered at the NAFTA talks.

The decision by Canada's broadcast regulator to allow the sometimes iconic American advertisements to appear on Canadian television has raised the ire of U.S. trade czar Robert Lighthizer during the long renegotiation of the North American Free Trade Agreement.

"The United States is very concerned about this policy," Lighthizer wrote earlier this year in his annual report on barriers to U.S. trade.

A day after Prime Minister Justin Trudeau offered a full-throated defence of Canada's cultural exemption in NAFTA, Foreign Affairs Minister Chrystia Freeland returned to Washington on Wednesday and resumed talks with Lighthizer.

As Freeland headed into the day's negotiations, she told reporters that officials spoke over the weekend after talks broke off Friday. She said she hoped for "constructive conversations" Wednesday.

The negotiations are aimed at bringing Canada into the NAFTA fold, but Canada and the U.S. remain far apart on several issues including culture, dairy and the Chapter 19 dispute resolution mechanism.

On Tuesday, Trudeau said Canada will not sign a deal that excludes a dispute resolution mechanism and exemptions for cultural industries.

Earlier on HuffPost Canada:

Canada and the U.S. need to present a text to the U.S. Congress by Oct. 1 in order to join the deal the Trump administration signed with Mexico last week.

The overall goal is to reach a deal by Dec. 1 so Congress can give its approval to a revised NAFTA before Mexico's new president takes office.

Trump is threatening to move ahead on a deal with Mexico that excludes Canada.

Sources familiar with the Canadian bargaining position say the cultural exemption Canada has insisted on preserving since NAFTA talks reopened 13 months ago remains an 11th-hour sticking point.

"The idea of preserving it remains an unresolved issue between the two," said one source, who requested anonymity because of the sensitivities surrounding the issue.

A matter of sovereignty and identity

Trudeau said Tuesday that waiving the cultural exemption would be tantamount to giving up Canadian sovereignty and identity.

Lighthizer laid out his concerns about the issue in his March report to Trump on the trade barriers faced by the United States.

On a section on Canadian content in broadcasting, Lighthizer highlighted the Canadian Radio-television and Telecommunications Commission (CRTC)'s decision in 2015 that banned the long-time practice of Canadian advertisers inserting their ads into the Super Bowl broadcast over the more popular American ones.

The new rules went into effect in time for the Super Bowl in February 2017.

The NFL and Bell Media, which holds the Canadian rights to the game, separately asked the Federal Court of Appeal to overturn the decision. In December 2017, the court dismissed the appeals.

Lighthizer's report said American networks had concerns about the CRTC policy: "U.S. suppliers of programming believe that the price Canadian networks pay for Super Bowl rights is determined by the value of advertising they can sell in Canada, and that the CRTC's decision reduces the value of their programming."

Bloomberg via Getty Images
Foreign Affairs Minister Chrystia Freeland (left) with U.S. Trade Representative Robert Lighthizer at the first round of North American Free Trade Agreement (NAFTA) renegotiations in Washington, D.C., Wed. Aug. 16, 2017.

Lighthizer also said American broadcasters operating in border states have also complained about Canadian counterparts picking up the U.S. signals and redistributing in Canada without consent. "The United States is exploring avenues to address these concerns," Lighthizer wrote.

Trump has been a vocal critic of NFL players protesting during the playing of "The Star Spangled Banner," and has called on the league to suspend or fire them.

The controversy reared its head again on Tuesday when Trump criticized Nike for sending a "terrible message" by featuring Colin Kaepernick in a new spot to mark the 30th anniversary of its "Just Do It" campaign.

Colin Kaepernick, the former San Francisco 49ers quarterback, was the first player to kneel during the playing the American national anthem in 2016.