Time is running out
Canadian PM Trudeau and Trump couldn't meet at the UN meetings and that's probably the final straw in failing to meet a September 30 deadline.
Lighthizer says "there is still a fair amount of distance" between Canada and the US. He's also saying Canada is not making concessions on key issues.
At some point we will find out if that was really a deadline. Trump said he would move ahead with a Mexico-only deal but on the weekend he said Canada would probably be included in a deal so that doesn't sound like someone ready to pull the trigger.
Mexico wanted a deal by month-end so it could be signed before Amlo takes office on December 1. However that's seemingly not a deal breaker.
For the US, we're already into the lame duck session of Congress. There is a statutory requirement that Congress gets 60 days to review the final text of any trade deal and there's some time needed between a high-level agreement on many of the NAFTA points and a final text.
Reports today say a particular hangup is on de minimus numbers. Mexico agreed to allow US online retailers to sell up to $100 in Mexico without sales tax. Canada insists that would make it extremely tough for local retailers to compete against what would be a 15% discount.
Lighthizer and Freeland are expected to meet on the sidelines of the UN today.
"It is Canada's strong view that, particularly on Chapter 19 but also some other issues, we need to see further movement from the United States if we're going to get there," a Canadian source told the Toronto Star.
Another problem is that Canada wants assurances that the US won't sign a new NAFTA then immediately hit Canadian autos with 'national security' tariffs.
All that said, the Canadian dollar seems to have settled into a spot where NAFTA headlines don't drive the bus. The pair is down 17 pips to 1.2939 as it falls to a session low.
10 min chart:
