WASHINGTON—Prime Minister Justin Trudeau said Tuesday that a deal on the North American Free Trade Agreement is “very close.” U.S. President Donald Trump’s trade chief said Thursday that a deal is “nowhere near close.”

Trudeau had expressed optimism again on Thursday, saying a good deal was “on the table” and that negotiators were down to their “last conversations.” But U.S. Trade Representative Robert Lighthizer struck a markedly different tone in an unusual statement later in the day.

“As I said last week, there are gaping differences on intellectual property, agricultural market access, de minimis levels, energy, labor, rules of origin, geographical indications, and much more,” Lighthizer said, promising to “continue to engage in negotiations.”

Lighthizer issued the statement after U.S. officials held meetings with top Trudeau officials, including his chief of staff Katie Telford and his point man for U.S. affairs, Brian Clow. Foreign Affairs Minister Chrystia Freeland also returned to Washington on Thursday.

The day prior, a Canadian government source told the Star that there were indeed several major issues that had not been resolved — nor even discussed in depth in recent weeks as top officials focused almost exclusively on auto manufacturing. Trudeau, the source said, meant that a quick deal could be had if the U.S. was willing to make significant compromises.

U.S. House Speaker Paul Ryan had said that various mandatory review periods under U.S. trade law meant that Thursday was the last day to reach a deal that could be voted on by the Republican-controlled Congress this year.

On Thursday, though, Ryan told reporters that there might be a window of two more weeks, since it’s possible that the U.S. International Trade Commission could take less than its allotted 105 days to issue an analysis of the impact of the agreement. Trade analysts said it is far from certain that the commission would indeed speed up its work to suit a political calendar.

Speaking to the Economic Club of New York on Thursday, Trudeau said that Canada, the U.S. and Mexico had agreed on a “broadly acceptable” proposal on the auto issue. Trudeau made clear, though, that there were other hurdles to overcome.

He said a deal that includes the “sunset clause” the U.S. is demanding, which would automatically terminate NAFTA in five years if the three countries did not re-endorse it, is not “much of a deal at all.” He said they must still settle on a system for resolving trade disputes. And he cautioned later that “there’s a lot of fine-tuning to do.”

Underscoring the lingering tension, Mexico’s economy secretary, Ildefonso Guajardo, pushed back against Trudeau’s claim in New York that Mexico has made a proposal that would satisfy Trump by “bringing back some auto jobs from Mexico to the United States.”

“Any renegotiated NAFTA that implies losses of existing Mexican jobs is unacceptable,” Guajardo said on Twitter after congratulating Trudeau for a “great interview.”

Trade experts said Canada and the U.S. might be offering divergent assessments because their goals are different. Ohio-based trade lawyer Dan Ujczo said Canada is likely trying to “leverage” this moment to try to get a limited “skinny” deal that includes changes to auto rules, but largely keeps the existing NAFTA intact, but Lighthizer is interested in addressing perennial Canada-U.S. disputes. Ottawa-based trade strategist Peter Clark offered a similar analysis, saying Trudeau might be seeking a limited deal in the belief Canada can obtain concessions by offering a quick deal Trump might see as a political victory but that the policy-minded Lighthizer sees as unsatisfactory.

The U.S. political calendar matters because of the possibility that trade-skeptical Democrats will retake at least one chamber of Congress from trade-friendly Republicans in January.

In that case, it is possible that the Trump administration would have to alter some bargaining positions to satisfy Democratic concerns about labour rights, the environment and other issues. It is also possible that Democrats would simply refuse to hold a vote. They took five years to vote on trade deals signed by the last Republican president, George W. Bush.

Loading... Loading... Loading... Loading... Loading... Loading...

With files from Bruce Campion-Smith and Tonda MacCharles

Correction — Sept. 4, 2018: This article was edited from a previous version that mistakenly said Peter Clark is a trade lawyer. In fact, Clark is a trade strategist.

Read more about: