Chrystia Freeland cancels NATO trip to remain in Washington for critical NAFTA talks

Canada's lead minister on the North American Free Trade Agreement file is cancelling her plans to attend the NATO summit in Brussels to participate in vital late-game trade talks in Washington D.C.

Foreign Affairs Minister Chrystia Freeland is sending her parliamentary secretary, Omar Alghabra, to Belgium in her place.

Freeland and her counterparts from Mexico and the U.S. are currently engaged in the third straight day of face to face talks, in an attempt to make significant progress before May 1. Those talks will continue on Friday; there's no official word on when the minister will be returning to Canada. 

That date is the deadline the U.S. set for Canada and Mexico to strike some sort of NAFTA agreement in order to retain the exemptions Washington gave both countries to sweeping steel and aluminum tariffs ordered by President Donald Trump in early March.

Freeland said late Thursday that as far as Canada is concerned, NAFTA negotiations and tariffs are separate issues.

While a full NAFTA agreement by that date is unlikely, Canada is looking to get a permanent exemption from the tariffs. 

The Trump administration fears that any further delay could imperil an agreement, given the political realities. The U.S. ratification process takes months to complete, the opposition Democrats could regain control of Congress after the November midterms and a firebrand leftist is favoured to become Mexico's president Dec. 1.

To reassure the U.S., Prime Minister Justin Trudeau announced earlier today that Global Affairs Canada and the Canada Border Services Agency are being given an additional $30 million over the next five years to strengthen trade enforcement.

Stopping transshipment

The money will be used to prevent the transshipment of steel from China and other countries through Canada to the U.S. in an effort to skirt U.S. tariffs.

Along with the extra money for enforcement, the Trudeau government is making regulatory changes that would "expand the scope of steel and aluminum products that need to be marked with their country of origin," according to a government statement.

"Canadian workers and industries deserve a level playing field, and we will continue to protect them from unfair trade practices," Trudeau said in a statement Thursday.

"Part of that includes making sure Canadian trade enforcement agencies have the resources they need to defend the competitiveness of our businesses and our important North American trading relationships."

Talks snagged on sunset clause proposal

Other measures announced Thursday include giving the CBSA greater flexibility to examine the pricing of goods in their markets of origin to see if they are distorted.

Freeland's decision to stay in Washington D.C. to continue negotiations on NAFTA comes at a critical time for the talks, as pressures mount and differences between the three sides are laid bare.

Earlier this week, Freeland and U.S. Trade Representative Robert Lighthizer were still at odds over a U.S. proposal to impose a time limit on the new NAFTA deal.

That 'sunset clause', put on the table by the Americans, would force all three countries to proactively agree every five years to remain in the trade pact. If they do not agree, the deal would be automatically killed.

Canada and Mexico say the demand would create economic instability.

Improved enforcement needed

Sarah Goldfeder, a former U.S. diplomat and principal with Earnscliffe, said the package of improved customs measures announced Thursday was a direct result of pressure put on Canada by the U.S. Goldfeder said the improvements were needed to convince the Trump administration that Canada is addressing their concerns.

"The United States has pushed on Canada for a long time to resource CBSA better because there was always the sense that they just didn't have the capacity to deal with transshipment issues, transshipment of steel and other goods as well as counterfeit goods," she said.

Whether the new customs measures, or Freeland's decision to stay behind in Washington D.C., can lead to an agreement soon remains unknown. Unifor National President Jerry Dias is sceptical. He told CBC News that there is broad disagreement between the three parties on labour standards, the conflict resolution mechanism and the sunset clause.

"The only way that this thing gets done in the next week, as everyone is reporting, is if there are wholesale changes in everybody's position," Dias said. "There are some positive things going on but nothing that signals to me that there is going to be an imminent deal."