US President Donald Trump and Canadian Prime Minister Justin Trudeau reportedly reached a deal on a revised North America Free Trade Agreement (NAFTA) late Sunday evening, according to officials briefed on the negotiations.
A delay would mean current Mexican President Enrique Pena Nieto wouldn't be able to sign the deal before he leaves office, placing the fate of the pact in the hands of his successor, Andres Manuel Lopez Obrador.
"USMCA will give our workers, farmers, ranchers, and businesses a high-standard trade agreement that will result in freer markets, fairer trade and robust economic growth in our region", Freeland and Lighthizer said in a joint statement.
The two deals will pave the way for a full overhaul of the 25-year-old NAFTA deal.
The United States and Canada forged a last-gasp deal on Sunday to salvage NAFTA as a trilateral pact with Mexico, rescuing a three-country, $1.2 trillion open-trade zone that had been about to collapse after almost a quarter century.
Negotiators - still apart on matters such as dispute resolution and a US demand for more access to Canada's dairy markets - are also tackling the matter of American tariffs.
So-called Chapter 19 dispute panels, which the USA wants to eliminate from Nafta and which Canada wants to preserveAn exemption for cultural sectors which Canada wants to preserveThe use of Section 232 investigations to apply tariffs to steel, aluminum, and potentially cars.
The dairy issue was a longtime target for Trump, who insisted that the high protective barriers for United States dairy farmers trying to export to Canada were unfair.
"Canadian Prime Minister Justin Trudeau called a meeting with his Cabinet late Sunday", the Associated Press reported Sunday night ahead of the announcement of the new deal.
"It's a great deal and that's why Mexico has already entered into that deal with us", he told Fox News in another interview on September 29. He said he didn't know if a deal would be reached Sunday. One Ottawa source directly familiar with the talks said the two sides were very close, while another said: "We are close, but not there yet". Vehicles imported to the United States from Mexico contain almost 20 to 30 percent USA content.
President Donald Trump has approved the developments and the expectation is that an agreement will be announced on Sunday night (Monday morning, Singapore time), according to the people, who spoke on the condition of anonymity.
"Lots of progress but we're not there yet", he said.
The agreement preserved a NAFTA dispute-resolution process that the US wanted to jettison, the official told The Associated Press ahead of an official announcement.
CNN reported the sticking points had been USA access to Canada's dairy market and the US threat to impose tariffs on trucks, cars and auto parts made in Canada. While TPA gives Trump the ability to send a deal to Congress for a simple majority vote, it also includes a statutory 60-day notification period.
Canada will open its dairy market further to USA producers, and Washington left unchanged the dispute settlement provisions which Ottawa demanded.
Trump blames NAFTA for the loss of USA manufacturing jobs and wants major changes to the pact, which underpins $1.2 trillion in annual trade.
Ottawa and Washington remained at odds over Canada's subsidized dairy sector, and the dispute resolution provisions in NAFTA.