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00:00AMBASSADOR TO CANADA. THANK YOU FOR YOUR TIME. ARE WE EXPECTING AN AGREEMENT THIS WEEK AND WHAT WOULD THAT MEAN FOR AN EVENTUAL FINAL NAFTA DEAL? > > THERE IS A REALLY GOOD CHANCE IF THE U.S. TRADE REPRESENTATIVE IS IN THE MODE OF COMPROMISE AS WELL AS THE CANADIANS TO GET A DEAL IN PRINCIPLE BY FRIDAY. IT SEEMS SHORT BUT YOU HAVE TO REMEMBER PEOPLE HAVE BEEN WORKING ON THIS FOR YEARS. THEIR WHOLE CAREER A LOT OF EXPERTS HERE BOTH SIDES ARE VERY WELL-VERSED IN THIS. IT SEEMS LIKE TWO DAYS ARE SHORT, IF THERE IS COMPROMISE AND AARON THINK WE CAN GET A DEAL IN PRINCIPLE. WHAT THAT MEANS IS THERE ARE A LOT OF BLANKS THAT NEED TO BE FILLED IN. THIS IS A VERY COMPLICATED DEAL. IT HAS 30 CHAPTERS, A LOT OF DETAILS YET TO BE FILLED IN. THEY WILL NEED TO GET THAT FILLED IN VERY QUICKLY. > > AS WE ARE SPEAKING, WE ARE NOW HEARING FROM THE CANADIAN PRIME MINISTER SAYING THAT THERE IS IT FOR POSSIBILITY OF A DEAL BY FRIDAY. CANDIDATE WILL DEFEND THEIR SUPPLY MANAGEMENT. WHAT DOES THAT MEAN FOR THE FUTURE OF NAFTA? WE HAVE SEEN THE PRESIDENT BEING VERY ADAMANT ON RELAXING CANADA'S TARIFFS. > > IT IS INTERESTING HOW THIS COMES UP TO BE SUCH A BIG ISSUE SO THAT EVERYONE HAS INSPECTED HERE. DAIRY IS LESS THAN 1% OF THE TRADE WITH CANADA. THE U.S. HAS A SURPLUS OF DAIRY WITH CANADA. IT IS THEN POINTED OUT THAT THERE ARE PENALTIES OF 270%, NO ONE ACTUALLY PAYS THOSE BECAUSE WE HAVE QUOTAS TO GET US INTO CANADA. THE CANADIANS DO NOT SO MUCH DAIRY AT ALL TO THE U.S.. THE PRESIDENT HAS MADE THIS AN ISSUE AND THE PRIME MINISTER HAS DOMESTIC ISSUES OF KEEPING SUPPLY MANAGEMENT IN PLACE. THERE IS ROOM HERE TO GIVE ADDITIONAL AXES TO THE UNITED STATES WITHOUT DISBANDING THE WHOLE NINE. IT IS SO SMALL RELATIVE TO THE OVERALL TRADE, I WOULD HATE TO SEE THIS BE THE ISSUE THAT BREAKS DOWN THE AGREEMENT. > > THE PRIME MINISTER ALREADY INDICATED SOME GIVE IN DEALING WITH THE EU IN TRADE AGREEMENTS. IS IT POSSIBLE TO INCREASE THOSE QUOTAS? > > YES I THINK SO. THEY DID THE SAME IN TPP AS WELL. THEY HAVE SHOWN SOME ABILITY TO GIVE ADDITIONAL ACCESS TO THE MARKET. ANOTHER STICKING POINT ON THIS IS ALSO FILTERED MILK -- ALTRA ALTERED MILK. THAT AREA IS DEALT WITH, THEY CAN TACKLE THIS ISSUE. > > LET'S MOVE ONTO SOMETHING TOUGHER. THE DUMPING PANELS. THAT SEEMS TO BE A RED LINE FOR THE PRIME MINISTER AT THIS POINT. IT WAS NOT ADDRESSED WITH MEXICO IN A WAY THAT CANADA CAN ACCEPT. > > IS A BIT OF HISTORY, BACK WHEN THE ORIGINAL NAFTA WAS PUT IN PLACE, THE CANADIANS WANTED TO MAKE SURE THERE WAS INDEPENDENT ARBITER WOULD NEVER TRADE DISPUTES. THAT WAS SET UP IN CHAPTER 19 AS WELL AS OTHER CHAPTERS WITHIN NAFTA. THIS IS IMPORTANT TO CANADA BECAUSE WE DON'T WANT TO BE IN A POSITION WHERE THE U.S. DOES SOMETHING TO CANADA AND CANADA DOESN'T LIKE IT. THEY DON'T WANT TO BE RELIANT ON JUST ONE VERSUS ANOTHER. U.S. DOES NOT WANT TO HAVE TO GO TO MEXICO OR CANADA TO DO LAWSUITS IN THAT COUNTRY. THEY LIKE THE INDEPENDENT ARBITRATION. IT WILL BE INTERESTING TO SEE HOW IT WORKS OUT BUT I'M SURE THERE IS A COMPROMISE. I THINK YOU CAN CARVE OUT INDUSTRIES, BUT TO A CERTAIN DEGREE GETTING RID OF A COMPLETELY WILL BE A HARD THING FOR CANADA. > > YOU TALKED ABOUT POLITICS WITHIN CANADA. THE PRIME MINISTER HAD ENJOYED SUPPORT WHEN IT CAME TO NEGOTIATING ON NAFTA AGAINST THE U.S. AREA WILL HE HAVE A MORE CHALLENGING TIME COMING UP AS WE ARE HEARING FROM CONSERVATIVE LEADERS CRITICIZING THE PRIME MINISTER? > > THE ELECTION SEASON HAS BEGUN IN CANADA. THE PRIME MINISTER HAS ANNOUNCED THAT HE IS RUNNING AGAIN AND IT IS CLEAR THAT THE BEHAVIORS DOMESTICALLY ARE LINING UP FOR A CAMPAIGN THAT WILL BE NEXT OCTOBER. THAT BEING SAID, THE CANADIAN POPULATION OVERALL IS HIGHLY SUPPORTIVE OF THE PRIME MINISTER IN THE NEGOTIATIONS WITH NAFTA. THIS IS TOO IMPORTANT ECONOMICALLY ACROSS THE BOARD. IT IS HARD TO BELIEVE TOO MANY PEOPLE WOULD ATTACK THE PRIME MINISTER IN THE MIDDLE OF THESE NEGOTIATIONS. > > WE HAVE SOME SENSE FROM THE U.S. POINT OF VIEW WHAT PRESIDENT TRUMP FEELS HE HAS TO DELIVER. FROM TRUDEAU'S POINT OF VIEW, OUR CARS CRITICAL. IS THAT GOING TO BE IMPORTANT TO THE CANADIAN PEOPLE? > > $670 BILLION WORTH OF I LATERAL TRADE AGAIN, THE U.S. HAS A SURPLUS WITH CANADA. FROM THE CANADIAN PERSPECTIVE, IF YOU TAKE AWAY ENERGY IN A CULTURE, THE MOST IMPORTANT MANUFACTURED PRODUCT IS AUTOMOBILES. WE MAKE HOURS TOGETHER. A CAR MADE IN CANADA, 50% OF THE CONTENT IS FROM THE U.S.. WE MAKE IT TOGETHER. THIS IS IMPORTANT TO THE CANADIANS. I WOULD SAY WITH THE MEXICANS HAVE DONE IN THE NEGOTIATIONS, THAT FALLS IN LINE WITH WHERE CANADA IS AREA CANADA IS RUNNING 72% NORTH AMERICAN CONTENT ANYWAY. TO GET TO 75 IS NOT A HEAVY LIFT . WAGES OF THEIR ARE MUCH HIGHER THAN MEXICO SO I THINK THE

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Canada's Trudeau Says There Could Be Trade Deal by Friday

Bruce Heyman, former U.S. ambassador to Canada, discusses the future of Nafta with Bloomberg's Shery Ahn and David Westin on "Bloomberg Markets: Balance of Power." (Source: Bloomberg)

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