Canada, US, Mexico herald 'astonishing' progress in talks

Canadian, Mexican and US trade representatives on Wednesday trumpeted strides made in a third round of continental free trade talks, despite major irritants casting a shadow over their meeting.

"We are making solid headway on bread and butter issues," host and Canadian Foreign Affairs Minister Chrystia Freeland said at the end of five days of negotiations on the North American Free Trade Agreement (NAFTA).

She cited "astonishing progress" made on "a number of the more technical but really important issues."

But she acknowledged that some of the "hardest issues or proposals" have not yet come up for discussion.

"We have some challenging issues ahead," she said.

Her counterparts, Mexican Economy Secretary Ildefonso Guajardo and US Trade Representative Robert Lighthizer, were equally effusive about this round while cautiously optimistic about the next.

"There is an enormous amount of work still to be done, including some very difficult and contentious issues," Lighthizer said.

"We will have substantial challenges to overcome," echoed Guajardo, adding that Mexico "will be open to new ideas."

The negotiations wrapped up as a row erupted over Canadian aircraft sales to the United States. 

Ottawa slammed a whopping 220 percent countervailing duty that Washington imposed on major Canadian manufacturer Bombardier, following an investigation into state subsidies sparked by a complaint by US aircraft manufacturer Boeing.

This appeared, however, to have little or no impact on the outcome of the latest NAFTA talks, with Freeland vowing to deal with the aircraft issue separately.

"I think we all know that this is an administration that is openly protectionist," Freeland commented.

"It is an administration that speaks quite openly of an American first policy that Canada has do deal with," she said. "And that's what we have to do."

- Elephant in the room -

Bombardier, unions representing Canadian aerospace workers, and both the Canadian and Quebec governments assailed the duties as "absurd," "ridiculous," "madness," and an attempt by Boeing to "stifle competition."

Prime Minister Justin Trudeau vowed to retaliate by cancelling an order for Boeing fighter jets.

"I think our US counterparts understand how upset we are with this decision and how we're looking at all options," Canadian Trade Minister Francois-Philippe Champagne said when asked if the Bombardier-Boeing spat could spill over into the ongoing NAFTA negotiations.

Also on the sidelines, Canada and the United States are sparring over trade in softwood lumber, which could impact one of Canada's top sectors.

Away from that turmoil and after five days in Ottawa, NAFTA negotiators said they had made "significant progress in several areas."

They noted that they are now working from "consolidated texts in most areas," meaning the parties have agreed on key facts and proposals.

Advances were made in telecommunications, competition policy, digital trade, good regulatory practices, and customs and trade facilitation. 

Parties also exchanged proposals for opening up access to government procurement.

And they wrapped up a chapter on small- and medium-sized businesses, though details on this were scant.

The envoys also said they expect to conclude negotiations on a chapter on "competition" before the start of the next round of talks in Washington in two weeks.