Nafta Nations Report Modest Progress as Bombardier Tensions Grow

(Bloomberg) — Trade negotiators touted some progress on updating the North American Free Trade Agreement even as the U.S. decision to impose duties on Canadian-made jets inflamed tensions with Prime Minister Justin Trudeau’s government.

While the nations made advances in the third round of talks that wrapped up Wednesday, such as closing the chapter on small and medium-sized businesses, the U.S. Commerce Department’s decision to impose duties on Bombardier Inc.’s marquee jetliner hung over the final day of negotiations.

Canada’s Foreign Minister Chrystia Freeland said that she raised the Bombardier issue with U.S. Trade Representative Robert Lighthizer, who she hosted for a working dinner just as the decision was handed down Tuesday. Mexican Economy Minister Ildefonso Guajardo also attended the dinner at Canada’s National Arts Center in Ottawa.

“It’s true this is a protectionist administration, and it’s no secret,” Freeland told a group of reporters after the conclusion of the five-day round, in perhaps her most heated public comments since Nafta negotiations began. The Bombardier issue is “a priority for the government of Canada and we’re going to continue to fight very, very hard,” she said, adding that it’s separate from the Nafta process.

Chicago-based Boeing Co. had complained that the Canadian company received unfair government help. The Bombardier decision adds to the distractions following President Donald Trump’s repeated threats to withdraw from Nafta and demands that Mexico fund a border wall to keep undocumented immigrants out of the U.S.

‘It’s a Litigation’

In the Nafta talks, negotiators said they made headway on telecommunications, digital trade and state-owned enterprises, and the chapter on competition will probably be agreed on before the fourth round. Bombardier doesn’t affect the process to overhaul the 23-year-old agreement, Lighthizer told reporters.

“It’s a litigation, it has a process,” he said about Commerce’s decision. “The incentives we all have to get an agreement that works for us don’t change.”

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