Canada-U.S. trade talks break down without a deal

"We are replacing NAFTA with a handsome, brand new US-Mexico trade deal", Mr Trump told a crowd in IN last night.

Also nettlesome is a provision in the U.S. -Mexico deal that shields U.S. makers of biologics - ultra-expensive drugs produced in living cells - from generic competition for 10 years instead of the eight Canada is willing to live with: The Canadians fear the protection will drive up drug prices and make their government health care system more costly.

He then noted the nation was far better off before NAFTA and suggested either we make a new deal with Canada or go back to pre-NAFTA.

Not long before, during an electoral rally in Indiana, US President Donald Trump had cast a blunt threat towards his neighbor to the north: "We are replacing NAFTA with a handsome, brand new US-Mexico trade deal". They agreed to resume talks on Wednesday.

"We are looking for a good deal, not just any deal", Canadian Foreign Affairs Minister Chrystia Freeland told reporters earlier this week. Canada is the second-biggest trading partner of the US, and Mexico is the third.

President Trump railed against reports that off-the-record comments he made about Canada tanked new NAFTA negotiations on Friday. The longstanding trilateral deal was roundly criticized by the protectionist right, as well as the anti-globalization left, particularly for the damage that eliminating tariffs did to the American auto industry. For various political reasons on both sides of the Rio Grande, it was critical that the trade deal be officially presented to Congress by end of the week, so getting Canada on-board became an immediate priority.

Using the mechanism has helped the US agriculture sector, especially, in combating duties imposed by Mexico, one of industry's biggest export markets.

For example, the U.S. International Trade Commission, an independent federal agency, this week scrapped the Commerce Department's duties on uncoated groundwood paper from Canada, saying the shipments don't threaten American producers. He has vowed to negotiate a better deal - or withdraw from NAFTA altogether. Nieto's successor, Andrés Manuel López Obrador, has had representatives at the U.S. -Mexico talks, but if the deal is not signed before he takes office he could add new demands and complicate the deal. It started with Trump's attacks on Canadian dairy farmers, then Washington slapped tariffs on Canadian steel, citing national security.

Canada doesn't have much of an objection to the auto provisions of the U.S. Another key issue is USA tariffs on steel and aluminum imports, though it's unclear whether relief from those will be included.

In a odd twist on the third day of talks, Ms Freeland emerged from the final late night meeting after only a few minutes, saying she just had a few things to tell Mr Lighthizer. Derek Burney, a former Canadian ambassador to Washington who was involved in trade talks with the US a generation ago, said the provision is crucial.

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