Provincial Labour Minister Jean Boulet, at a meeting Thursday morning, put out a proposal to meat packer Olymel and the CSN-affiliated Syndicat des travailleurs d’Olymel Vallee-Jonction (STOVJ) to take the labour dispute to arbitration, and gave the parties until 5 p.m. to respond.

The union refused the proposal, Boulet said Thursday afternoon on Twitter, adding he would ask his appointed special mediator, Jean Poirier, to run a “blitz” of negotiations toward a negotiated agreement between now and Sunday.

Olymel had said Tuesday it would give its Vallee-Jonction hog plant’s workers until Sunday night to reconsider their rejection last week of an agreement in principle reached between the union and management.

Without a deal by then, the company said it will start the process to scrap the plant’s evening shift and lay off about half the plant’s 1,050 unionized workers by the end of the year.

STOVJ president Martin Maurice, in a separate statement Thursday, said the union favours negotiation over arbitration because it’s still convinced a new deal in principle can be negotiated in a short time frame.

The union told Boulet it would refuse arbitration because its members would “certainly not want a settlement imposed by an arbitrator after having spent nearly four months on strike.”

The STOVJ also called on Poirier to launch the negotiating blitz as soon as possible.

The idea of provincially-arranged arbitration to wrap up the Olymel strike had been suggested last week by critics with the provincial third opposition Parti Quebecois.

Olymel’s plant at Vallee-Jonction, about 60 km southeast of Quebec City, has been idle since the STOVJ went on strike April 28. The plant currently has capacity to process about 35,000 hogs per week.

Les Eleveurs de porcs du Quebec, the province’s hog producer group, last week estimated about 150,000 market-weight hogs were backed up on farms awaiting slaughter as a result.

The group said previously it has been working with Olymel to try and manage the backlog, by shipping animals to slaughter outside Quebec and/or selling off piglets to free up barn space. — Glacier FarmMedia Network

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President-elect Andres Manuel Lopez Obrador said Canadian Prime Minister Justin Trudeau asked him during a Thursday phone call “to intervene and call on the U.S. government to reach an agreement” with Canada. “We agreed to that.”

But Lopez Obrador, who takes office on Dec. 1, said the NAFTA language between Washington and Mexico City was now final.

“We are not going to re-open the negotiation. That you can be sure of,” Lopez Obrador told reporters in Mexico City.

Even so, Lopez Obrador said “the negotiation is not closed” between the U.S. and Canada, and said he had received information that the Trump administration has made a new counterproposal to Ottawa.

Queries to Canadian officials and the U.S. Trade Representative’s office to verify the U.S. proposal were not immediately answered.

Mexican Economy Minister Ildefonso Guajardo was scheduled to present the text of the Aug. 27 agreement, which aims to rebalance auto trade and modernize parts of NAFTA, to Mexico’s Senate at 7 p.m. ET, Mexican government and Senate sources said.

Mexican Senator Ricardo Monreal said on Twitter the text would be released simultaneously in Mexico and the U.S. A USTR spokesman declined comment on the timing.

The text of the U.S.-Mexico deal needs to be published by late Sunday night — 60 days ahead of the Nov. 30 deadline for Trump and Mexico’s outgoing president, Enrique Pena Nieto, to sign the deal before Lopez Obrador takes office on Dec. 1.

U.S. Trade Representative Robert Lighthizer has argued that the U.S. would have to reopen negotiations with the new Mexican government if the deadline is missed, but Lopez Obrador’s comments appear to call that into question.

Canada’s Liberal government says it does not feel bound by the latest NAFTA deadline, and it repeated on Friday that it would not bow to U.S. pressure to sign a quick deal.

“We are in a very tough negotiation with the United States over NAFTA… there is no deadline on this. As far as we are concerned we want a deal that is good for Canadians and that’s the bottom line,” Transport Minister Marc Garneau told reporters in Ottawa.

Some U.S. Democratic lawmakers said on Thursday they could not support a NAFTA deal without Canada.

“Canada is exceptionally important. I think it would be malpractice, both for economic and political reasons, not to have a major agreement with Canada,” said Senator Ron Wyden, the top Democrat on the tax and trade Senate Finance Committee.

President Donald Trump, a Republican who blames the 1994 NAFTA pact for the loss of U.S. manufacturing jobs, trumpeted the deal with Mexico as a win for Americans and threatened to close the door on Canada if it did not sign on by Sept. 30.

Trump also floated slapping auto tariffs on Canada, which could sow disarray in supply chains, take the wind out of the sails of a resurgent Canadian economy and rattle investors already unnerved by an escalating U.S.-China trade war.

Auto trade

The U.S.-Mexico text will flesh out an agreement in principle that aims to rebalance automotive trade between the two countries and update NAFTA with new chapters on digital trade and stronger labour and environmental standards.

It is expected to conform to details previously released on auto rules requiring an increase in regional value content to 75 per cent from 62.5 per cent previously, with 40 per cent to 45 per cent coming from “high-wage” areas, effectively the U.S.

Auto industry executives say it is unlikely those targets can be met if Canada is not part of the deal, given supply chains that crisscross NAFTA borders multiple times.

Details also are expected on a side-letter that preserves the Trump administration’s ability to impose global national security tariffs on imports of autos and auto parts, granting Mexico a quota for tariff-free exports to the United States that allows some expansion of production.

And more light is likely to be shed on the enforcement of new labour standards and trade dispute settlement arrangements. The U.S. has said Mexico agreed to eliminate a system of settlement panels to arbitrate disputes over anti-dumping and anti-dumping tariffs.

But a Mexican source close to the talks said the U.S. had in turn agreed to drop a demand for tariffs to protect U.S. seasonal produce growers.

Mexico also secured an exemption from U.S. “global safeguard” tariffs such as those imposed in January on washing machines and solar panels, the source said. Mexican-made products were hit by those actions, which were aimed at protecting U.S. producers from import surges.

The release of the trade deal text starts a months-long process for U.S. congressional approval that will require a lengthy analysis by the independent U.S. international Trade Commission and notification periods before an up-or-down vote.

Lawmakers briefed by Lighthizer said he told them the earliest a vote could occur, either on a U.S.-Mexico deal or a trilateral deal including Canada, would be February or March 2019, after the U.S. Congress elected in November is sworn in.

— Reporting for Reuters by David Lawder in Washington and Anthony Esposito in Mexico City; additional reporting by Ana Isabel Martinez and Diego Ore in Mexico City and David Ljunggren in Ottawa; writing by David Lawder and Paul Simao.

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The failure to secure a quick deal underscores uncertainty over the North American Free Trade Agreement, which U.S. President Donald Trump on Friday said “has been a horrible, horrible disaster for this country.”

Trump, who blames the 1994 pact for U.S. manufacturing job losses to lower-cost Mexico, often threatens to walk away unless the other two member countries agree to major changes.

After meeting for barely half an hour on Friday, the top Mexican and Canadian politicians involved in the talks to update the agreement made it clear that big differences remained.

Canadian Foreign Minister Chrystia Freeland said officials would continue working in Washington while ministers returned home for consultations.

“We plan to meet again as needed, which I think will be soon… The negotiation will take as long as it takes to get a good deal,” she told reporters after the meeting.

Pressure to reach a deal increased this week after Speaker Ryan said he needed to be notified of a new NAFTA by May 17 to give the current Congress a chance of passing it.

U.S. Trade Representative Robert Lighthizer has said he wants a deal in place soon to avoid potential political problems stemming from Mexico’s July 1 presidential vote and U.S. midterm congressional elections in November.

In a statement, Lighthizer said the U.S. was ready to continue working with Mexico and Canada but made no mention of a deadline.

Friday’s talks were the first involving all three of the top officials in the NAFTA negotiations — Freeland, Mexican Economy Minister Ildefonso Guajardo and Lighthizer — since the latest round started on Monday.

Mexico has not agreed to a U.S. proposal to boost North American content for autos made in the NAFTA region, one of the main sticking points. Guajardo said his team tried hard during the week to bridge the gap.

“We’re not going to sacrifice the quality of an agreement because of pressure of time,” he said.

Financial markets are nervous about the damage a U.S. withdrawal could inflict on the highly integrated North American economy. Canada’s central bank governor and other policymakers complain that uncertainty over the pact is hitting business investment.

Guajardo, who wants to reach an agreement on all the principal aspects of a modernized NAFTA before sealing a new deal, says plenty of other issues were outstanding.

Drafting new rules of origin governing what percentage of a car needs to be sourced from the NAFTA region to avoid tariffs has been at the center of the talks.

It forms a key plank of the Trump administration’s aim to boost jobs and investment in the United States.

Officials and industry sources say the three sides have been gradually narrowing their differences on autos.

However, several other major issues are still unresolved, including U.S. demands for a sunset clause that would allow NAFTA to expire if it is not renegotiated every five years, and elimination of settlement panels for trade disputes.

— Reporting for Reuters by David Ljunggren and Anthony Esposito; additional reporting by David Shephardson in Washington and Daina Beth Solomon in Mexico City.

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In a much-anticipated document sent to lawmakers, U.S. Trade Representative Robert Lighthizer said he would seek to reduce the trade imbalance by improving access for U.S. goods exported to Canada and Mexico under the three-nation pact.

For the first time in a U.S. trade deal, the administration also said it wants an “appropriate” provision to deter currency manipulation by trading partners. The move appeared aimed at future trade deals rather than specifically at Canada and Mexico, which are not considered currency manipulators.

The 17-page document asserted that no country should manipulate its currency exchange rate to gain an unfair competitive advantage, an often-cited complaint about China in past years.

Shortly before the release of the document, President Donald Trump lashed out against trade deals and unfair trade practices, saying he would take more legal and regulatory steps during the next six months to protect U.S. manufacturers.

Canada’s Foreign Affairs Minister Chrystia Freeland said the U.S. list was “part of its internal process” although a source familiar with Canadian government thinking said the document was “not earth shattering.”

Trade experts have argued that shrinking the yawning U.S. trade deficit will not be achieved by revising trade deals but rather by boosting U.S. savings.

“The first bullet point shows their preoccupation with bilateral trade deficits, and that’s unfortunate,” said Chad Brown, a senior fellow and trade expert at the Peterson Institute for International Economics. “There’s not much that trade policy and trade agreements can do to change those. That’s more of a macroeconomic issue.”

Among the priorities, Lighthizer said the administration would seek to eliminate a trade dispute mechanism that has largely prohibited the U.S. from pursuing anti-dumping and anti-subsidy cases against Canadian and Mexican firms.

There was no mention of active disputes between the U.S. and Canada over softwood lumber and dairy products, but the document targeted a range of agricultural non-tariff barriers, including subsidies and pricing structures, that are currently at the heart of those standoffs.

USTR said it would seek to strengthen NAFTA’s rules of origin to ensure that the pact’s benefits do not go to outside countries and to “incentivize” the sourcing of U.S. goods. It offered no details on such incentives and did not specify how much of a product’s components must originate from NAFTA countries.

No date has been announced for the NAFTA talks, but they are expected in mid-August.

Automakers support stance

Matt Blunt, president of the American Automotive Policy Council, a group representing U.S. automakers, welcomed the decision to include in the list of objectives the removal of regulatory barriers and the provision on currency manipulation.

A spokesman for Ford Motor Co said: “Foreign currency manipulation is the 21st century trade barrier, and we strongly support the inclusion of this top-tier issue in the U.S. negotiating objectives for NAFTA. We look forward to working with the administration to achieve this objective by including strong and enforceable currency prohibitions as part of NAFTA.”

The document also outlined plans to upgrade standards for labor and the environment and govern digital trade. Canada and Mexico have already agreed to upgrade these areas as part of the defunct Trans-Pacific Partnership trade deal.

Representative Sander Levin, a Democrat from Michigan, said there was nothing in the document that would change the way Mexico treated its workers.

“Mexico has used their workers having no rights and suppressing labor costs as a key part of their industrial policy,” he said, “There is nothing in the summary that assures in these vital aspects that a new NAFTA will be different than the old.”

There was no formal reaction to the letter from Mexican government.

Earlier on Monday, AFL-CIO President Richard Trumka said NAFTA had been an “unequivocal failure” and should be completely renegotiated.

“We will do everything we can to make this a good agreement and to hold the president at his word and make sure we get a renegotiation,” the head of the 12.5-million strong union umbrella group told a conference call with reporters.

“If it comes out that it is not a good deal, no deal is better than a bad deal,” Trumka said.

NAFTA has quadrupled trade among the three countries, surpassing $1 trillion in 2015, but the U.S. trade deficit with Mexico exceeded $63 billion last year.

— Reporting for Reuters by Lesley Wroughton and David Lawder; additional reporting by David Shepardson.

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