Canadian Minister of Foreign Affairs Chrystia Freeland, Mexican Economy Minister Ildefonso Guajardo and US Trade Representative Robert Lighthizer. Photo: AFP/Ronaldo Schemidt

The renegotiation of the North American Free Trade Agreement continued on Tuesday, as Canadian Foreign Minister Chrystia Freeland sat down with US trade officials and struck a positive tone, speaking with reporters.

The trade talks were overshadowed in Washington by the anniversary of the terrorist attacks of September 11, 2001, and Freeland took the opportunity to tout the importance of the US-Canada relationship.

“At the end of the day, we’re neighbors – and at the end of the day, neighbors help each other when they need help,” she said.

But there remain obstacles to reaching a deal, which both US President Donald Trump and Canadian Prime Minister Justin Trudeau said they were prepared to walk away from.

One of the sticking points is access to the Canadian market for US dairy farmers. While Reuters reported on Tuesday that Canada is prepared to make concessions on the issue, it is likely to face opposition among supporters of Trudeau’s Liberal Party in Ontario and Quebec.

“We are better off having no NAFTA than a bad deal for Canada,” Trudeau told reporters on Tuesday, stressing that he would defend the country’s dairy industry.

His comments echoed Trump, who said on Tuesday that while Ottawa wants a deal, he could go either way, depending on what concessions will come from the talks.

Speculation has been building in recent weeks that the Trump administration is in the midst of a pivot from picking trade fights with allies to focusing on confronting China.

After a meeting on Monday between US officials and EU Trade Commissioner Cecilia Malmstrom in Brussels, the Office of the US Trade Representative said they had made progress toward a partial deal.

“An early harvest in the area of technical barriers to trade” could come as soon as November, the office said, according to the Financial Times.

While modest progress on trade tensions would leave many unresolved issues, the trajectory of talks with Mexico, Canada and trading partners in Europe suggests the Trump administration may forgo imposing more tariffs on its allies, while momentum builds for a dramatic escalation in a trade war with China.