ARI SHAPIRO, HOST:
Intense trade talks are happening right now between the U.S. and Canada. President Trump is putting pressure on our northern neighbor to strike a deal by the end of this week or else risk being left out of a new trade agreement he's reached with Mexico.
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PRESIDENT DONALD TRUMP: I think Canada very much wants to make the deal. And I think it's going to be obviously very good for Canada if they do. And I think it's probably not going to be good at all if they don't.
SHAPIRO: Canadian Prime Minister Justin Trudeau said today there's a possibility a deal could be reached by Friday. But he stressed that his country will only sign on if he believes it's in Canada's interests. NPR's Scott Horsley joins us now. Hi, Scott.
SCOTT HORSLEY, BYLINE: Hi, Ari.
SHAPIRO: Canada had been on the sidelines for weeks while the U.S. finished this negotiation with Mexico. Now there's this flurry of activity while the clock is ticking down to the end of the week. What's the latest?
HORSLEY: The U.S. and Mexico announced their two-way agreement on Monday, Ari, and that kind of lit a fire under the Canadians. That country's foreign minister, Chrystia Freeland, cut short a European trip she was on. She raced to Washington yesterday. And ever since, she and her team have been meeting off and on with their U.S. counterparts. She spoke to reporters earlier today during a break in those talks.
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CHRYSTIA FREELAND: We are working extremely hard, extremely intensely. And we continue to be optimistic about the progress that we can make this week.
SHAPIRO: Why the deadline of this week, Scott? Talks on updating the North American Free Trade Agreement have been going on for a year now. Where did this deadline come from?
HORSLEY: You know, with any kind of negotiation it helps to have a deadline even if it's a little bit artificial. And in this case, what's driving the timeline is the upcoming transfer of power in Mexico. Mexican President Enrique Pena Nieto is going to be stepping down on the 1st of December. And even though his successor has been monitoring these talks, he hasn't officially been party to them. So the U.S. doesn't want to have to kind of almost start over with a new Mexican president. By law, Congress needs 90 days to review any agreement. So that means if you want to get something signed before Pena Nieto leaves office, you've got to have at least the outlines of a deal by the end of this week.
SHAPIRO: Got it. Now, Canada's foreign minister didn't want to get into the specifics of the talks, and she doesn't want to negotiate in public. But it's no secret what the outstanding issues are between the U.S. and Canada. Tell us about them.
HORSLEY: Right. Trump has demanded that Canada lower its trade barriers on dairy products. You've often heard the president grousing about the triple-digit tariffs that Canada imposes on American milk. There are reports in the Canadian media that Prime Minister Trudeau might be willing to give some ground on that, but only if the U.S. is making concessions in some other areas.
For example, there is a system in NAFTA for resolving disputes among the countries. Canada wants to preserve that. The U.S. wants to scrap it. There's also a disagreement over intellectual property protections that the U.S. wants for pharmaceutical products. Another issue, Ari, that had been a sticking point was the American demand for a sunset provision. But the U.S. has already given some ground on that in the Mexican talks, so that might not be a stumbling block anymore.
SHAPIRO: Speaking of the Mexican talks, how is Canada reacting to the new rules about the auto industry that the U.S. and Mexico have tentatively agreed on?
HORSLEY: You know, Canada's probably OK with that. Those new rules require that in order to get duty-free status, cars or trucks have to contain more content from North America and more content or some content that's built in relatively high-wage factories. That probably works well for Canada, just as it does for the United States. Minister Freeland described that as a concession on Mexico's part and said she's happy about that. One concern, though, is if it makes North American vehicles in general less competitive internationally, they could be losing...
SHAPIRO: More expensive.
HORSLEY: ...Market share to Europeans and Japanese.
SHAPIRO: NPR's Scott Horsley, thanks a lot.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.