Photo: Yomiuri Shimbun via AFP

Prospects for a deal between the United States and Canada on a renegotiated North American Free Trade Agreement are on shaky ground, according to America’s top trade official, with a Sunday deadline set by the White House fast approaching.

“The fact is, Canada is not making concessions in areas where we think they’re essential,” US Trade Representative Robert Lighthizer said in New York on Tuesday, as quoted by The Hill.

“We’re going to go ahead with Mexico,” he added. “If Canada comes along now, that would be the best. If Canada comes along later, then that’s what will happen.”

One of the primary sticking points is a demand from the Trump administration that Canada cut dairy subsidies, a move that would provoke the ire of part of Canadian Prime Minister Justin Trudeau’s political base.

“We know that Canada’s interests are what we have to stand up for and we will,” Trudeau said, speaking at the Council of Foreign Relations in New York. “We are looking for the right deal.”

Japan next in firing line

As the NAFTA negotiations are wrapping up, and after a successful renegotiation of the US-South Korea free-trade agreement, the Trump administration’s focus appears to be shifting to trade talks with Japan.

After a meeting on Monday between US President Donald Trump and Japanese Prime Minister Shinzo Abe, the two countries agreed to a framework on Tuesday to expand trade, which would include negotiations on tariffs, The Japan Times reported.

Already a target of metals tariffs imposed by the Trump administration, Japan is keen to be granted exemptions from threatened tariffs on cars and auto parts.

Speaking at the United Nations General Assembly on Tuesday, Trump touted the success of his trade policy, citing the renegotiated bilateral trade deal with South Korea, as well as a partial rework of NAFTA agreed to with Mexico.

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