Justin Trudeau said on Sunday that he is optimistic about reaching an agreement on the North American Free Trade Agreement (NAFTA) with the United States. The Canadian prime minister told German media the two countries have made meaningful progress as the May 17 deadline to make a deal approaches.

NAFTA was negotiated by President Bush in the late 80s and early 90s and passed into law by Bill Clinton in 1994. The agreement, between Mexico, Canada, and the USA, allowed for free trade between the three North American countries.

Since the USA’s most recent presidential election the deal has come under threat. Donald Trump has pilloried the agreement on numerous occasions and stated that he wants to renegotiate the deal or scrap it altogether.

In his comments to German media, Trudeau addressed these comments by claiming that his government will respond to actions and not rhetoric. He noted that, while there has been a lot of rhetoric from the USA, the two countries have made some concrete progress on the deal.

Discussing the talks, Trudeau noted: “The USA has come up with some initiatives that we believe are bad for Canada - but probably for the USA as well. We continue to work for Canada's interests, believing that it is possible to achieve a win-win outcome.”

Tariffs set to stay?

One of the major concerns has been the threat of high tariffs imposed on foreign goods coming into the USA. Trump imposed tariffs on steel and aluminum imports in March 2018. In the same month, he exempted Mexico and Canada, amongst other countries, from the deal. The exemption for Mexico and Canada is dependent on the outcome of negotiations on NAFTA.

Trudeau failed to ease concerns on this front noting that they had still discussed the problems of steel and aluminum tariffs, suggesting those are still goals the USA wants to pursue. While those tariffs may benefit a small number of workers in specific industries, they are almost certain to harm the rest of the population by pushing up prices on goods affected by the tariffs.