Canadian Foreign Minister Chrystia Freeland said told reporters after a two-and-a-half-hour meeting with U.S. Trade Representative Robert LighthizerRobert (Bob) Emmet LighthizerMcConnell urges GOP senators to call Trump about tariffs Companies brace for trade war MORE that a deal is "eminently possible" but said she would not negotiate the pact in public, the CBC reported.
"Our officials are meeting now and will be meeting until very late tonight. The longer term is not almost as clear", said Ekos pollster Frank Graves."Trade wars are never good for the respective combatants and if this escalates it could have very deleterious economic impacts".
Welles Orr, who was assistant US trade representative for congressional affairs in the George H.W. Bush administration, said the prospects appear good for a deal with Canada in coming weeks, although a new NAFTA or its replacement would likely not get through Congress until next year at the soonest.
However, no specifics on the progress made towards reaching an agreement have been announced.
The talks are focused on US demands to scrap the so-called Chapter-19 dispute resolution mechanism in NAFTA, overturn some of Canada's current "carve-out" of cultural industries from free-trade rules and loosen protections under the dairy sector's supply management system.
Republican Tom Reed, a member of the House ways and means committee, said Trump doesn't necessarily want the Liberals to get rid of the system, but simply to remove what the Americans see as trade barriers. Canada has the right to oppose such an agreement, he said.More news: Lindsey Graham: Obama criticism of Trump bound to backfire
Prime Minister Justin Trudeau has said the mechanism is crucial to a new NAFTA, but Mexico already has agreed to drop it.
US officials have said time is running out to agree on a text that can be signed by American, Canadian and Mexican leaders by November 30, before the current Mexican government leaves office.
"These are complicated subjects and there's still some distance" separating the two sides, said one source close to the talks who spoke on condition of anonymity to describe pending negotiations.
Mr. Monette said that it is absolutely necessary to back up the supply management to protect the domestic producers.
Trudeau, who over the past year has faced increasing criticism for backtracking on promises, ordering endless consultations on major topics and failing to fulfill many of his campaign promises, had taken a tougher stance against the United States in recent weeks.
"But it would also be devastating to the American auto industry". Rather, they're following the standard political economist playbook: protect those industries and sectors that can help carry Trudeau to another win in the federal elections 13 months from now. Earlier on Wednesday, the Trump administration's own anti-dumping duties on Canadian paper, used in books and newsprint, were thrown out by the U.S. International Trade Commission.