This article was originally published on ETFTrends.com.
According to Canada's Foreign Affairs Minister Chrystia Freeland, ongoing talks with the U.S. remain "constructive" despite the threat of punitive tariffs on Canadian-made cars if Canada spurns the prospect of a new North American Free Trade Agreement come Friday.
"It was a very constructive meeting with Ambassador (Robert) Lighthizer and his team and we'll be back again tomorrow," said Freeland. "What has really paved the way for what Canada believes will be a good week is the fact that Mexico has made some significant concessions, particularly in the area of labour and of rules of origin on cars."
Related: Mexico ETFs Gain on New NAFTA Deal
Freeland was effusive in her praise of Mexico's trade concessions on autos and labor rights on Tuesday as she rejoined NAFTA talks. In the meantime, U.S. lawmakers were wary that a bilateral U.S.-Mexico trade deal may encounter obstacles on its path towards approval in Congress.
The trade deal struck with Mexico on Monday would effectively eliminate the NAFTA name and would now be called The United States-Mexico Trade agreement. The Trump administration was pushing for a revamp of the NAFTA agreement prior to December 1 when Mexico turns over its leadership to the incoming administration of President-elect Andrés Manuel López Obrador.
The bilateral U.S.-Mexico deal announced on Monday gives U.S. President Donald Trump the right to impose 25% tariffs on imports of Mexican-made passenger vehicles. If Trump proceeds with the tariffs, Mexican duty-free exports of cars and sport-utility vehicles to the U.S. would have a cap of 2.4 million vehicles per year.
Freeland said that Mexico's tough concessions to the U.S. could pave the way for productive negotiations. All three NAFTA members are working towards a Friday deadline to revamp the 24-year-old agreement amongst the nations.
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