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Canada, U.S. reach NAFTA deal, Canadian officials say

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WASHINGTON—Canada and the U.S. have agreed on a new North American Free Trade Agreement, concluding an acrimonious 13-month negotiation that had hindered the Canadian economy and damaged relations between the two countries.

They did not immediately release the full details on which the deal will ultimately be judged. The news that they have struck any kind of deal, though, means Prime Minister Justin Trudeau has achieved a long-sought goal: convincing U.S. President Donald Trump to preserve a trade accord Trump has repeatedly threatened to terminate.

“It’s a good day for Canada,” Trudeau said as he left a late-night cabinet meeting in Ottawa, declining to take questions.

Trump, meanwhile, began touting the deal as a fulfilment of his campaign promise to secure a better arrangement for American workers.

“It’s a great win for the president and a validation of his strategy in the area of international trade,” said a senior Trump administration official, saying it includes a “host of provisions that will rebalance our trade relationship with Mexico and Canada.”

The deal makes substantial changes to the rules governing the North American auto industry. And it will affect dozens of other industries and the consumers who buy their products, from milk to medicine.

Canadian sources said the deal would include partial protection for Canada against the auto tariffs Trump has repeatedly threatened to impose. A certain number of Canadian car exports to the U.S., significantly higher than the current number, would be guaranteed tariff-free access. Trump could hypothetically impose tariffs on amounts above that.

The Trump administration official said there would be no substantial changes to the “Chapter 19” dispute-resolution system or the cultural exemption Trudeau had made his “red lines” in the last two months of negotiations.

The Trump official said Trudeau had made a concession on dairy, giving U.S. farmers more access to the protected Canadian market than the 3.25 per cent Canada granted its partners in the earlier Trans-Pacific Partnership trade agreement.

“We’ve had a great result for our dairy farmers,” the Trump official said.

The Trump official said there had not been a resolution on the issue of the steel and aluminum tariffs Trump imposed on Canada or the retaliatory tariffs Trudeau imposed on various U.S. products.

The Trump official said there had not been substantial changes on the issue of the “TN” visas for professional workers. And the official said the deal includes a “review and termination provision” on the agreement, but did not make clear what it includes; the U.S. had previously pushed for some kind of auto-termination “sunset clause” Trudeau had not wanted.

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Word of the agreement came after 9:30 p.m. Sunday night, just before the deadline the Trump administration had set for publicly publishing the text of its preliminary agreement with Mexico. That would have started a 60-day countdown to the possibility of Trump and Mexican President Enrique Pena Nieto signing a deal that did not include Canada.

The current NAFTA will stay in effect until the end of the process of finalizing the merged three-country agreement, which is still far from over. Most critically, the legislatures of Canada, the U.S. and Mexico, which previously struck its own preliminary agreement with the U.S., must now vote in favour of the final three-country deal.

While that will not be a problem in Canada or Mexico, the U.S. Congress, which has sometimes taken years to approve trade deals struck by presidents, may prove more difficult. If Congress delays, Trump could renew his threats to terminate the current NAFTA to try to pressure Congress into accepting the new one.

Nonetheless, the agreement between Trump and Trudeau appears to put to rest, at least for now, a primary source of bilateral tension. Trump had grown increasingly critical toward Trudeau and Canada as the difficult negotiations dragged on, and he had warned that he could “ruin” the Canadian economy with car tariffs if there was no deal.

The Trump official said the deal puts “our trade relationships and hopefully our overall relationships on a better and stronger footing.”

The Sunday deal followed a weekend scramble in Ottawa and Washington. Trudeau’s top officials huddled in his office into the night on Saturday and Sunday. Trudeau arrived on Sunday night and later convened a meeting of his cabinet around 10 p.m.

Read more:

In 12 steps, how troubled NAFTA 2.0 talks unfolded

Opinion | Trudeau will benefit on NAFTA regardless of outcome

In a joint statement issued by Trump’s trade chief, Robert Lighthizer and Foreign Affairs Minister Chrystia Freeland Sunday night, the ministers said the agreement to be called the United States-Mexico-Canada Agreement, or USMCA, is a “new, modernized trade agreement for the 21st Century.”

NAFTA governs more than $1 trillion in annual trade between the three countries. It guarantees tariff-free trade of most products, facilitates the movement of investment capital and professional workers across the two borders, sets rules governing hundreds of kinds of businesses and provides a system for resolving continental trade disputes.

Economists had predicted serious though not catastrophic damage to the Canadian economy if the 24-year-old NAFTA had vanished, with the losses concentrated in Ontario.

The final stage of the negotiations had focused on a small number of issues on which both sides had dug in their heels.

Canada insisted on preserving the “Chapter 19” system that allows Canada to challenge U.S. trade duties at an independent tribunal rather than in U.S. courts. The U.S. had wanted to eliminate it. Trump budged in the end.

The U.S. insisted on substantially more access to Canada’s tightly protected dairy market. Trudeau vowed to preserve the supply management system, which aids domestic farmers, but had signalled for weeks he was open to the incremental concessions opposed by Canada’s dairy lobby. He made those concessions in the end.

Canada had insisted on complete protection from the auto tariffs. Flavio Volpe, president of the Canadian Automotive Parts Manufacturers’ Association, declined to comment on the details of the apparent compromise, but he said Canadian negotiators had to practical when dealing with Trump.

« The principle of agreeing to a cap based on a the threat of illegal tariff is never good, but the reality of negotiating with an administration that has proven that it will harm itself in order to harm its trading partners means that we’ve got to use some realpolitik, to live to fight another day,” Volpe said.

Jerry Dias, president of Unifor, the largest union representing Canadian autoworkers, said late Sunday that he was optimistic about the deal.

« It is incredibly important that we get a deal that stabilizes the auto industry in Canada for the long term and I’m confident that we are heading in that direction, » said Dias.

Rona Ambrose, former interim Conservative leader and a member of Trudeau’s NAFTA advisory council, tweeted her praise. “A NAFTA deal in principle will help ease investor anxiety, stabilize trade exposed sectors and reassure the world that North America remains committed to free trade. Congrats to Team Canada.”

Canadians, initially divided on NAFTA, have come to be overwhelmingly supportive. But Trump had called NAFTA the worst trade deal in world history, blaming it for the loss of U.S. manufacturing jobs. He vowed during his 2016 campaign to tear up the accord unless he could secure a better deal for American workers, and he launched renegotiation talks in August 2017.

The new agreement includes substantially altered rules on automotive manufacturing. The U.S. pushed for a series of changes the Trump administration believes will wrest some jobs back to the U.S. from Mexico and overseas.

According to U.S. and Mexican government reports, a car will qualify for tariff-free treatment only if 75 per cent of its contents are made in North America, up from 62.5 per cent in the current NAFTA. And at least 40 per cent of the contents must be produced by workers earning at least $16 (U.S.) per hour, more than three times the wage of the average Mexican autoworker.

The negotiations involved two basic categories: modernization and renegotiation. The modernization track, in which the three countries worked to update an outdated agreement that was finalized before the advent of the internet economy, proceeded smoothly. The renegotiation track was far more difficult. Canada and the U.S. clashed over several U.S. proposals.

Among other things, the Trump administration had initially wanted to eliminate Canada’s supply management system for dairy and poultry, introduce a “sunset” clause that would automatically terminate NAFTA unless all three countries decided again to keep it, sharply reduce Canadian access to U.S. government contracts and eliminate the independent dispute resolution system.

Mexico was Trump’s chief NAFTA target during his election campaign. But it was Canada that drew most of his administration’s public ire in 2017 and 2018.

The Canadian government tried to work around Trump while also seeking to avoid his anger. Trudeau launched an unconventional diplomatic blitz in support of the agreement, dispatching ministers around the U.S. to attempt to build alliances with trade-friendly lawmakers at all levels of government.

Canada was joined in its pro-NAFTA pressure by the main American business lobby groups, such as the U.S. Chamber of Commerce, and by much of the Republican congressional caucus, whose leaders warned Trump that dumping NAFTA would hurt the hot economy. Farm-state legislators told Trump how NAFTA had caused a boom in agricultural exports. Texas legislators told Trump that their state relied on free trade with Mexico.

With files from Bruce Campion-Smith

Daniel Dale is the Star’s Washington bureau chief. He covers U.S. politics and current affairs. Follow him on Twitter: @ddale8

Tonda MacCharles is an Ottawa-based reporter covering federal politics. Follow her on Twitter: @tondamacc



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A stunning Water Lantern Festival is coming to Montreal

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What might just be the most magical night ever is coming up for Montreal this year.

The Water Lantern Festival has announced that it will be gracing Mississauga with thousands of floating lanterns later this year, as part of a celebration that spans the entire world.

According to the festival’s official website, the event is a celebration of life with proceeds going towards charities and non-profit organizations within the area.

“Water Lantern Festival brings together individuals from all ages, backgrounds, and walks of life to join in one emotional and memorable night. At the Water Lantern Festival, we cherish these moments and will do our best to help you have a memorable experience that you’ll never forget as you witness the beauty of thousands of lanterns reflecting upon the water,” the website states.

The festival takes place throughout multiple cities around the world, with the Canadian cities of Quebec, Regina, Vancouver, Hamilton, Calgary, Ottawa, Mississauga, and, of course, Montreal taking part.

For the Calgary event, a date has been confirmed and tickets are already rolling out. Montreal shan’t be far behind, and you can click the Notify Me tab on the event’s site to be kept in the loop.

Expect an evening filled with food trucks, music, lantern designing and finally, a magical launch of the lanterns into the water as the sun goes down.

For our pals over in Calgary, their event includes a floating lantern, a commemorative drawstring bag, a marker, and a wristband. Expect something similar, if not the same, when more details float through about Montreal’s event.

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Euthanasia order on hold for Montreal dog that attacked children

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A pit bull dog that attacked four children and two adults in August 2018 in Montreal North will not be euthanized in the immediate future.

The euthanasia order has been temporarily suspended pending the appeal of a Quebec Superior Court decision.

On Tuesday, Judge Lukasz Granosik rejected a request to halt the euthanasia order issued by the Montreal North borough, which declared the animal a “dangerous dog.”

The City of Montreal has not changed its mind. This is only a delay before it proceeds with euthanizing the dog, a source told the Canadian Press.

Shotta, the one-year-old dog, was in the care of its owner’s acquaintance in August 2018. The dog attacked four children and two adults, causing serious injuries in separate incidents on the same day.

After the attacks, the dog was taken from the home and entrusted to the SPCA.

WATCH: Dog found dead in Angrignon Park

The Road to Home Rescue Support, an American shelter, asked the court if it could take in the dog. Christa Frineau, the dog’s owner, had also asked that Shotta not be euthanized.

Granosik refused to grant the request.

—With files from Global’s Kalina Laframboise

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9 Things To Do In Montreal This Friday, Saturday & Sunday

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Today’s sunny skies have me itching to make weekend plans. I absolutely cannot wait to make the most of this warmer weather. This might be the time to inflate my bike tires and dust off my running shoes…

Whether you want to brush up on your cooking skills, let loose, or fill your stomach with amazing food, there’s an event out there for you. Read on for 9 fun things you can do with friends or a fling this weekend.

TL;DR Read on for 9 fun things you can do in Montreal this weekend.

Let Yourself Go At Dress Up

Where: 185 Avenue Van Horne, Montréal.

When: Friday, March 29, 9:00 p.m.

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