Negotiators from the U.S. and Canada are hoping to reach a deal on the ongoing North American Free Trade Agreement (NAFTA) talks currently underway this week in Washington. According to Reuters, while delegates from both countries worked to advance the talks further on Thursday, several crucial items remain to be settled.

“We are making good progress,” said Canadian Foreign Minister Chrystia Freeland, Canada’s chief negotiator for the NAFTA talks while speaking to reporters on Thursday evening. The Foreign Minister described the trade meetings as “constructive and productive.”

One of the major issues still to be resolved is the question of dairy quotas. President Trump has stated before that Canada’s dairy quota, in essence, cripples U.S dairy farmer’s ability to export north.

 


Another unresolved issue still being worked out is Chapter 19, which is the means by which the two countries settle trade differences. According to Reuters, Canada has used the “Chapter 19 arbitration panels” in the past to protect its lumber exports into the U.S., which in turn argues that the process is unfair.

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According to the Toronto Star, Chapter 19 is Canada’s “crown jewel” of the agreement. However, dairy products and Chapter 19 are not the only issues yet to settled. Canadian cultural rights regarding media and steel tariffs are also still on the table.

With no resolution in sight, many experts are pessimistic the two North Atlantic Treaty Organization (NATO) countries will ink an agreement by Friday. President Trump has stated that if a deal with Canada cannot be reached, he would enter a bilateral agreement with Mexico, leaving NAFTA to die. However, according to Reuters, it is unclear if the president could withdraw from NAFTA entirely without the approval of Congress.

Canadian Prime Minister Justin Trudeau displayed a similar attitude earlier in the week while talking to journalists.

“We’re not going to accept that we have to sign a bad deal just because the president wants that,” Trudeau said during a radio interview, according to the Montreal Gazette. “We’ll walk away and not sign a deal, rather than sign a bad deal for Canadians.”

Despite the trade differences between the U.S. and Canada, there are plenty of reasons why it’s advantageous for both of the nations to reach an agreement.

“Ending the North American Free Trade Agreement (NAFTA) and moving ahead with only a new U.S.-Mexico trade agreement, as the White House has threatened, would damage the U.S. and Canada,” argues Earl Anthony Wayne in a recent Op-Ed published by The Hill. “Compared to what is at stake for the United States, the remaining U.S.-Canada trade differences are small and resolvable.”