Official says basis of Canada-US free trade deal has been reached

TORONTO — The U.S. and Canada reached the basis of a free trade deal Sunday night, a senior Canadian government official said.

The agreement preserved a NAFTA dispute-resolution process that the U.S. wanted to jettison, the official told The Associated Press ahead of an official announcement. The official was not authorized to speak publicly and requested anonymity.

The agreement also exempts tariffs on 2.6 million cars. On dairy Canada essentially gave the U.S. the same access it offered in the Trans Pacific Partnership trade agreement that President Donald Trump rejected.

The U.S. and Canada were under pressure to reach a deal by midnight Sunday, when the U.S. must make public the full text of the agreement with Mexico.

Canada, the United States’ No. 2 trading partner, was left out when the U.S. and Mexico reached an agreement last month to revamp the North American Free Trade Agreement.

The Trump administration officially notified Congress of the U.S.-Mexico trade agreement on Aug. 31. That started a 90-day clock that would let outgoing Mexican President Enrique Pena Nieto sign the new pact before he leaves office Dec. 1.

Mexico’s economics ministry said in a tweet earlier Sunday that the text of the pact would be delivered to the Mexican Senate Sunday night, adding that “if there is agreement with Canada, the text will be trilateral. If there is not, it will be bilateral.”

President Trump had said he wanted to go ahead with a revamped NAFTA — with or without Canada. It was unclear, however, whether President Trump had authority from Congress to pursue a revamped NAFTA with only Mexico, and some lawmakers said they wouldn’t go along with a deal that left out Canada.

U.S.-Canada talks bogged down earlier this month, and most trade analysts expected the Sept. 30 deadline to come and go without Canada being reinstated. They suspected that Canada, which had said it wasn’t bound by U.S. deadlines, was delaying the talks until after provincial elections Monday in Quebec, where support for Canadian dairy tariffs runs high.