Canada’s PM optimistic on NAFTA as deal on autos appears closer

Prime Minister Justin Trudeau said on Wednesday he remained optimistic Canada would certainly get a not bad deal at the NAFTA modernization talks amid signs negotiators could be closer to settling one of the trade pact’s most contentious issues.

Officials are due to meet next month for the eighth round of talks, which have bogged down as Canada as well as Mexico try to digest far-reaching U.S. demands for adjustments to the $1.2 trillion North American Free Trade Agreement.

People close to the process say the U.S. side, citing the need to finish before Mexican presidential elections in July, is actually right now showing more flexibility.

“We continue to be optimistic about our capacity to get to a not bad win-win-win (deal),” Trudeau told reporters.

Toronto’s Globe as well as Mail newspaper said the U.S. side had dropped its insistence that will all autos made in NAFTA nations should have 50 percent U.S. content. Canada as well as Mexico had rejected the demand.

The news helped boost the Canadian dollar to a six-day high against its U.S. counterpart while Mexico’s peso firmed more than 1 percent.

A spokesman for Canadian Foreign Minister Chrystia Freeland said he could not comment.

A Canadian source briefed on the talks said “there appears to have been positive progress made on certain key issues” involving autos. The source gave no precise details.

David MacNaughton, Canada’s ambassador to the United States, told reporters on Tuesday there had been movement on the autos issue nevertheless stopped short of saying the U.S. side had dropped its content demand.

“They came back with some ideas that will – if you take them to their logical conclusion – would certainly mean that will you wouldn’t need that will requirement,” he said.

“Did we get to somewhere where you could shake hands as well as say, ‘We’ve got a deal? Absolutely not …Whether or not we can get there I don’t know,” he added.

MacNaughton’s quotes were reported by the Canadian Press. A Canadian official confirmed their accuracy.

Mexico’s economy minister last week said that will if the three nations did not finish the talks by the end of April, the process would certainly drag on at least until the end of 2018.

Mexico’s presidential vote is actually on July 1 while U.S. congressional elections are set for November.

“We are very aware of the time pressures in both the United States as well as Mexico regarding the mid-terms as well as regarding the Mexican elections, as well as we are there working very, very hard,” Trudeau said.

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