Freeland to meet Lighthizer in Washington Tuesday

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But those talks excluded Canada, the third NAFTA country.

Canada and the United States are attempting to put the final touch to a text that could be submitted to Congress at the end of the month and allow Canada to join the agreement signed by the administration Trump with Mexico.

She said the talks were at a point where discussing them face-to-face with the prime minister "is absolutely essential".

Trump sounded a more upbeat note earlier, and said he expected to know whether a deal could be struck to include Canada in the next few days.

Prime Minister Justin Trudeau warned, however, that potential USA auto tariffs could be "devastating" for industry in both countries.

The U.S. has said it plans to present Congress with the deal it has with Mexico if Canada doesn't get on board.

"But it would also be devastating to the American auto industry". However, he said, Mr. Lighthizer is far more eager to dismantle this dispute-settlement provision. The United States and Mexico reached an agreement on overhauling NAFTA at the beginning of last week, turning up the pressure on Canada to agree to new terms. But a deal without Canada has virtually no chance of being passed, Mulroney said.

"We have all been dealing in good faith", he said.

Canadian Foreign Minister Chrystia Freeland takes part in a news conference at the Embassy of Canada in Washington, U.S., August 31, 2018.

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She pointed to the 17th anniversary of the 9/11 attacks as a reminder of the need for close cooperation between Ottawa and Washington.

"We will be travelling to Washington ... to continue the NAFTA negotiations", Ms. Freeland told reporters at the Women in the World event in Toronto, without commenting further on the state of the trade talks.

"At the end of the day, we're neighbors", Freeland said.

The two sides have so far been unable to break an impasse over US access to the Canadian dairy market, a cultural exemption for Canada and the Chapter 19 dispute resolution mechanism.

"We're negotiating all this at once".

Trudeau and his ministers will hold a caucus retreat in Saskatoon, Saskatchewan, to plot their strategy.

"To me, a lot of that is consistent with my suspicion that the USA doesn't really want to get a deal [or] at least the [Trump] administration doesn't", he said, citing the leaked off-the-record comments Mr. Trump gave Bloomberg in late August when he said he was refusing to compromise with Canada and that any deal with Canada would be "totally on our terms".

What should Canada do at the NAFTA negotiating table?

"They're really hammering this out", said Orr, who is now senior worldwide trade adviser for a Washington law firm.

"Sure, it's business and it's important, but Gander is the place that - in a snapshot - illustrates the Canada/US relationship". Canadian officials had said previously that they are working on the assumption that they have until the end of September to make a deal. "The previous two trade deals gave away a little bit and a little bit more, and so we don't want to go down the path of death by a thousand cuts".

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