White House economic adviser Larry Kudlow said Friday morning that an agreement with Canada regarding the U.S.’ trade deal with Mexico could “maybe” be reached by the end of the day. The main issue holding it up, he said, was Canada’s dairy policies under the North American Free Trade Agreement.
“We’re all working hard and I think the United States would rather have a trade deal with Canada – but it has to be a good deal, right?” the National Economic Council director said in an appearance on Fox Business. “And the word that continues to block the deal is M-I-L-K.”
“Drop the barriers and give our farmers a break,” he added.
[Related: The NAFTA ball is in Canada’s side of the court, key congressional Republican says]
Canada maintains an extensive system of government protections and import quotas for its dairy industry.
Talks between the U.S. and Canada to get its assent to the administration’s bilateral trade deal with Mexico fell short last week, prompting the administration to submit the deal to Congress on Friday, arguing that Canada’s support is not essential to the deal’s approval. At the same time, the Trump administration has continued meeting with Canadian counterparts this week to try to loop Canada into the deal.
A lack of support from Canada could cause Trump’s deal to stall in Congress, as many lawmakers have argued that Canada must be on board to prevent the deal from disrupting the NAFTA. The U.S.-Mexican deal “supplants,” in the administration’s own words, parts of NAFTA, creating an uncertain legal situation if Congress approves the deal.
