Canada, U.S. resume talks as parties remain quiet on details of tentative trade deal

Open this photo in gallery:A view of vehicles parked outside the GM assembly plant in Oshawa, Ont., on Tuesday, the day after the U.S. said it would pause tariffs on Canada for three days while talks continue.Carlos Osorio/ReutersTrade negotiations between Ottawa and Washington are set to continue Wednesday morning, while premiers and industry representatives scramble for information about what Canada agreed to on Tuesday to persuade U.S. President Donald Trump to postpone the introduction of new tariffs for three days. Late Tuesday, Mr. Trump announced on social media that he had reached a tentative trade deal with Ottawa and would extend the deadline for 50-per-cent tariffs on US$20-billion worth of Canadian goods until end-of-day Friday. Prime Minister Mark Carney said in a statement Tuesday evening that “substantial progress has been made, although there is important work still to be done.”Canada-U.S. Trade Minister Dominic LeBlanc and Janice Charette, the chief trade negotiator, were scheduled to meet with U.S. Trade Representative Jamieson Greer on Wednesday morning at the latter’s office.So far, a few scant details of what may be in the tentative agreement have emerged from the U.S. side. In a social media post, Mr. Trump mentioned the possibility of reviving the Keystone XL pipeline proposal, while Mr. Greer said on social media that the deal includes “market access for all American goods, economic security commitments, digital trade alignment.”Mr. Trump’s executive order postponing the tariffs suggests that Canada has agreed to U.S. demands to remove retaliatory tariffs on autos, accept the U.S. interpretation of dairy quotas and get the provinces to restock U.S. alcohol. Neither Mr. Trump nor Mr. Greer provided details about what Canada is looking for in return for any concessions, such as lower sectoral tariffs on metals, automobiles and forest products. Two industry sources said that Ottawa and Washington have not finalized an agreement on automobile tariffs. The U.S. has proposed lowering the tariff on vehicles to 15 per cent, but the two sides have been haggling over whether Canadian content in vehicles should be exempt from the tariffs, as is currently the case for U.S. content. Auto discussions are complicated by the fact that the U.S. is also in discussions with Mexico about auto tariffs and is trying to triangulate a deal between the three countries. Open this photo in gallery:Dominic LeBlanc, the minister responsible for Canada-U.S. trade, and Janice Charette, Canada's chief trade negotiator to the U.S., address the media in June in Washington.Anna Rose Layden/ReutersOn Tuesday evening, Mexican Economy Minister Marcelo Ebrard, the country’s point man on trade talks with the U.S., met with Mr. Greer at the latter’s offices near the White House. On his way out, Mr. Ebrard confirmed that “we presented something similar” to Canada’s demand that the value of all North American content be excluded from U.S. tariffs.On the Canadian side of the talks, details of the tentative agreement, and whether there are still sticking points, remain a closely guarded secret. Canada’s premiers were given no advance notice of the Tuesday developments and learned of the tariff delay at the same time as other Canadians when Mr. Trump posted about it on his social media channel, three sources said.After the news was made public, the premiers were still not given any information about the deal by the federal government, the sources said. As of Wednesday morning, one of the sources said Ottawa had yet to schedule any briefing with the premiers to explain what has been agreed to.Another one of the sources said the premiers’ offices were kept so in the dark as talks went down to the wire that they were relying largely on what was published in the press.The Globe is not identifying the sources as they were not authorized to speak publicly on the matter.As of Wednesday morning, Ottawa had not briefed its Advisory Committee on Canada–U.S. Economic Relations, made up of industry representatives, according to two sources. A government official said as of Wednesday morning a news conference or statement from the Prime Minister has not been scheduled, but they stressed that could change. They said talks are continuing and as it stands and they did not expect briefings to be given until the deal is completed. The Prime Minister’s Office did not release a Wednesday itinerary for Mr. Carney.The Globe is not identifying the official as they were not authorized to discuss the still-tentative plans.The outlines of a possible deal have emerged over the past two weeks, as Canadian negotiators have camped out in Washington trying to avert a new round of tariffs while also addressing longer-standing issues. The Globe has reported that a deal would lower tariffs on Canadian steel and aluminum but introduce a quota system. As of Monday, the two sides were still nailing details about lumber tariffs, and auto discussions remain a live issue. In return, The Globe reported, Canada was offering to address a list of U.S. trade grievances and to buy U.S. military equipment. Mr. Carney has on multiples times in the last year told the Canadian public a tariff deal with the U.S. was coming, only for any agreement to evaporate before it was completed. Most recently in October, Mr. Trump ripped up a pending deal after Ontario ran an anti-tariff ad campaign in the United States. This time around, Mr. Carney’s office is taking a cautious approach with any communications on the agreement, which is still under negotiation. Several of the sources said the information is “close hold” internally and not being shared.Bay Street economists said that news of the tariff postponement was welcome Wednesday morning, but that there are not enough details yet to assess the impact of a potential trade deal.BMO senior economist Robert Kavcic said it appears the two sides are working toward a deal that sets up further negotiations related to the United States-Mexico-Canada Agreement.“Hard to say without any details, of course, but it looks like the negative outcome of 50-per-cent tariffs is going to be avoided,” he said in an e-mail to The Globe and Mail Wednesday.“If the terms are favourable and look sustainable, it could help clear some uncertainty for Canadian businesses at a time when investment momentum appears to be picking up. Even so, you have to imagine that businesses will still show some hesitancy given how volatile this situation has been, and how the U.S. has been willing to almost disregard the existing trade agreement that’s already in place,” he said.Desjardins economist Randall Bartlett said he continues to expect that threatened new tariffs will not be enacted as outlined.“While this brief reprieve is good news for Canadian businesses and the broader economy, the fact that the outlook for U.S. tariffs and trade policy remains highly uncertain will continue to suppress business investment in Canada,” he said in an e-mail to The Globe.Candace Laing, president and chief executive officer of the Canadian Chamber of Commerce, said in a statement on Tuesday evening that “an extension doesn’t bring the certainty that a signed interim deal would.”“We know that stability is in short supply and businesses will take any ounce they can get. This limbo state is not anyone’s preferred outcome – time is of the essence,” she said. With a report from Bill Curry