Canada hopeful as U.S. hears NAFTA counter-proposals and keeps listening

Canada's counter-proposals on controversial American demands for a renewed NAFTA have not been rejected out of hand by U.S. Trade Representative Robert Lighthizer, The Canadian Press has learned.

Foreign Affairs Minister Chrystia Freeland met Thursday with Lighthizer in Davos, Switzerland, and a well-placed source said they discussed the U.S. demands on continental content requirements for automobiles, NAFTA's dispute resolution mechanisms, and for a sunset clause.

"He didn't shoot anything down. They agreed on the need to make some progress," said the source, who spoke on condition of anonymity because of the sensitivity of the negotiations.

"He was engaged, he asked questions ... They had a substantive conversation, not the same degree of granularity that they have here (at negotiations in Montreal)."

The source emphasized that it's too soon to assess what that means.

Freeland's conversation with her American NAFTA counterpart occurred on the sidelines of the World Economic Forum meeting in Davos. And it came ahead of their much-anticipated meeting Monday in Montreal with their Mexican counterpart, Ildefonso Guajardo, which will close the pivotal sixth round of NAFTA talks here.

NAFTA negotiators in Montreal are mired in talks focused on breaking new ground on controversial U.S. proposals.

Canada has tabled what is being billed by government officials as a set of creative counter-proposals on both those issues and the U.S. response could make or break the talks.

'Creative ideas'

Freeland told CNN in Davos that Canada is approaching the discussions with positive intent and sees real opportunities.

"There is a set of what we call the unconventional U.S. proposals in areas like rules of origin, particularly for the car sector, like the sunset clause proposal ... there is a greater distance between the parties," Freeland said.

"We have put forward some creative ideas on the sunset clause, on ISDs (investor state disputes) and creative ideas on rules of origin which we hope will help us have a real conversation on these issues."

Prime Minister Justin Trudeau told reporters in Davos that he agrees with recent comments by U.S. Vice-President Mike Pence that there's a possibility of a win-win-win scenario for all three NAFTA countries.

Trudeau said a deal is "eminently possible."

"Obviously, there are always opportunities to improve a deal that is close to 25 years old and that's what we have undertaken diligently and responsibly," Trudeau said.

"I know we are going to be able to get there and I am going to keep repeating that as often as I can because so many jobs in Canada, in the United States, in our three countries rely on the smooth flow of goods and services back and forth across our borders.