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OTTAWA—Canada publicly declared that any adjustments to the North American Free Commerce Settlement have to include limits on the U.S. use of tariffs on national-security grounds.

Feedback from Prime Minister Justin Trudeau and Canada’s chief envoy in Washington on Wednesday underscore the stark disagreements between Canada and the U.S. on what a revised model of the 24-year-old continental commerce pact ought to appear to be, and forged doubt on an settlement coming collectively shortly. U.S. Commerce Consultant Robert Lighthizer warned Tuesday the Trump administration is able to transfer on the finish of the month with a bilateral commerce pact with Mexico, citing an absence of progress in talks with Canada. Mr. Lighthizer mentioned Canada is “not making concessions” in important areas.

Mr. Trudeau mentioned Canada will take as “lengthy because it takes to get the fitting deal” for the nation, in one other signal that an end-of-September deadline set by the Trump administration received’t be met.

Mr. Lighthizer additionally mentioned any discussions about lifting national-security tariffs on Canadian-made metal and aluminum, and eradicating the specter of such levies on Canadian cars, wouldn’t be contemplated till a brand new Nafta is accomplished.

Chatting with reporters on the United Nations, Mr. Trudeau mentioned Canadian officers proceed to work on “the fitting deal for Canada. And that includes clearly feeling assured in regards to the path ahead, if we do a Nafta 2.0…[about the] lack of punitive tariffs that we contemplate are unjust.”

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After the U.S. and Mexico introduced a commerce deal, Canada and the U.S. have resumed efforts to return to an settlement. WSJ’s Shelby Holliday takes a take a look at some sticking factors. Picture: Getty Pictures

David MacNaughton, Canada’s ambassador within the U.S., was extra direct. In Toronto at an occasion hosted by American information outlet Politico, Mr. MacNaughton mentioned an unwillingness to incorporate in any renegotiated Nafta a “curb on the arbitrary use” of tariffs underneath the guise of nationwide safety might render the settlement “meaningless.”

On Tuesday in New York, Mr. Lighthizer mentioned Nafta talks initially targeted on attempting to have some settlement that will carry the national-security tariffs on imported metal and aluminum. “I believe our view now could be that we’ll flip to that as a subsequent stage, once we get Nafta performed,” Mr. Lighthizer mentioned.

At an occasion hosted by American information outlet Politico, Mr. MacNaughton mentioned Canadian officers are engaged on a revised commerce pact that will permit President Trump to declare victory. When requested in regards to the probability of a deal by the tip of September, because the Trump administration has pushed for, he put the probability at a 5 out of 10.

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“It’s actually a query of whether or not the U.S. needs a deal. They know precisely what we’re ready to do and what we’d like,” he mentioned.

Mr. Lighthizer and Canadian Overseas Minister Chrystia Freeland have met frequently since late August on a renewed Nafta, after the U.S. and Mexico struck its personal accord. Mr. MacNaughton mentioned Mr. Lighthizer and Ms. Freeland might meet this week. A spokesman for Ms. Freeland, who’s in command of the Nafta file, couldn’t affirm whether or not a get-together was imminent. Ms. Freeland is attending occasions this week on the U.N. Normal Meeting.

Nafta talks have missed a number of deadlines, however Mr. Lighthizer mentioned he’s looking for to maneuver forward with the Mexico deal so it may be signed earlier than Andrés Manuel López Obrador, Mexico’s president-elect, takes workplace Dec. 1.

Below U.S. regulation, the textual content of a commerce settlement should be revealed no less than 60 days earlier than it’s signed. That requirement means Mr. Lighthizer must launch the small print of the take care of Mexico—or probably a trilateral deal together with Canada—by the tip of September.

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Even when there isn’t any settlement between the U.S. and Canada by the tip of the month, Mr. Lighthizer indicated talks between the 2 international locations might proceed—with chance Canada later joins the pact within the occasion of a deal.

In addition to the disagreement over the therapy of national-security tariffs, the U.S. and Canada stay aside on Canada’s insistence the pact continues to have impartial panels to resolve disputes about tariffs. The U.S. needs this arbitration system weakened or scrapped. Additional, the 2 sides are at odds over elevated entry to Canada’s dairy market, and sustaining a cultural exemption Canada enjoys within the present Nafta.

Of the three international locations in Nafta, Canada stands to lose essentially the most from its potential demise, some economists say. The Financial institution for Worldwide Settlements mentioned in a report in August {that a} full revocation of Nafta would trigger a 2.2% decline in Canada’s GDP, whereas Mexico’s GDP would fall by 1.8%. U.S. GDP, in distinction, would maintain a comparatively meager 0.22% hit.

Write to Paul Vieira at [email protected]

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