Canada optimistic NAFTA deal can be struck this month: source

FILE PHOTO: Canadian Foreign Minister Chrystia Freeland takes part in a news conference at the Embassy of Canada in Washington, U.S., August 31, 2018. REUTERS/Chris Wattie/File Photo

By David Ljunggren

WASHINGTON (Reuters) – Canada is increasingly optimistic it can reach a deal with the United States to salvage the North American Free Trade Agreement, although it may take until the end of September, a source with direct knowledge of the talks said on Friday.

U.S. and Canadian officials resumed their negotiations this week to modernize the 1994 pact, which governs $1.2 trillion a year in trade between the United States, Canada and Mexico and supports hundreds of thousands of jobs.

President Donald Trump has struck a trade deal with Mexico and threatened to push ahead without Canada, a move that would kill NAFTA.

The talks in Washington are focused on Canada’s dairy supply system, which the United States says hurts its exports, Ottawa’s desire to keep NAFTA’s Chapter 19 dispute resolution mechanism and Canadian media laws that favor domestically produced content.

The Canadian source, who declined to be named given the sensitivity of the situation, said Canadian negotiators thought it was quite possible the talks would continue until the end of this month.

A U.S. official told Reuters on Thursday that Canada needed to move further on dairy. In its recent trade deal with the European Union, Canada made concessions on dairy imports.

“We’re down to three issues: Chapter 19, the cultural issues and dairy. We’ve created leverage and driven Canada to the table,” the U.S. official said. “Part of our problem is that Canada has been backsliding on its commitments (on dairy).”

Trump has targeted what he sees as “unfair” trade as part of his “America First” agenda to boost U.S. manufacturing and jobs, imposing tariffs on trading partners, including Canada, China, the EU and Mexico. That has prompted retaliation.

Tens of billions of dollars in Chinese imports have been slapped with U.S. tariffs and a new round of duties are due to be triggered soon.

Both Canada and Mexico want Trump to agree to permanently exempt them from U.S. tariffs on steel and aluminum imports. Washington has used those tariffs as leverage in the NAFTA talks.

Canada has used the provisions of NAFTA’s dispute resolution mechanism to defend its lumber exports to the United States. Washington charges that Canadian lumber unfairly undercuts prices on U.S. lumber.

APPROVAL OF CONGRESS

Trump appeared to set a deadline for a deal this week, prompting aides to U.S. Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia Freeland to work well into the evening on Thursday to find ways to move forward.

The Republican chairman of the U.S. House of Representatives Ways and Means Committee, Kevin Brady, a powerful voice in Congress on trade, told reporters differences remained between the two sides over Canada’s dairy quota regime, a trade dispute resolution settlement procedure and “other longstanding issues.”

“My sense is that everyone is at the table with the intention of working these last, always difficult issues out,” Brady told reporters after speaking with Lighthizer on Thursday.

Trump has notified Congress he intends to sign the trade deal reached last week with Mexico by the end of November, and officials said the text would be published by around Oct. 1.

Negotiators have blown through several deadlines since the talks started in August 2017. As the process grinds on, some in Washington insist Trump cannot pull out of NAFTA without the approval of Congress.

(Writing by David Chance; Editing by Paul Simao)

Turkey says will drive Kurdish YPG from Syrian border area if no deal with U.S.

FILE PHOTO: A general view shows the south eastern city of Manbij, in Aleppo Governorate, Syria, June 25, 2016. REUTERS/Rodi Said

ANKARA (Reuters) – Turkey will drive the Kurdish YPG militia away from the Syrian border if it does not reach agreement with the United States on a plan to remove the group from Syria’s Manbij region, Foreign Minister Mevlut Cavusoglu said on Thursday.

“If this plan is not realised, the only option left will be clearing away terrorists. This is not just valid for Syria, but also for Iraq,” he said in interview with state-run Anadolu news agency.

He added that President Tayyip Erdogan and President Donald Trump will speak by telephone on Thursday.

(Reporting by Tuvan Gumrukcu; Writing by Daren Butler; Editing by David Dolan)

U.S. officials say Russian inaction enabled Syria chemical attack

A civil defence member breathes through an oxygen mask, after what rescue workers described as a suspected gas attack in the town of Khan Sheikhoun in rebel-held Idlib, Syria April 4, 2017.

By Sarah N. Lynch

WASHINGTON (Reuters) – Trump administration officials on Sunday blamed Russian inaction for enabling a deadly poison gas attack against Syrian civilians last week as Secretary of State Rex Tillerson prepared to explain to Moscow a U.S. retaliatory missile strike.

Tillerson said Syria was able to execute the attack, which killed scores of people, because Moscow had failed to carry out a 2013 agreement to secure and destroy chemical weapons in Syria.

White House National Security Adviser H.R. McMaster said Syria’s “sponsors,” Russia and Iran, were enabling President Bashar al-Assad’s “campaign of mass murder against his own civilians.”

But Tillerson, who is expected to visit Moscow on Wednesday for talks with Russian officials, said on ABC’s ‘This Week’ program there was “no change” to the U.S. military posture toward Syria.

“I think the real failure here has been Russia’s failure to live up to its commitments under the chemical weapons agreements that were entered into in 2013,” Tillerson said.

“The failure related to the recent strike and the recent terrible chemical weapons attack in large measure is a failure on Russia’s part to achieve its commitment to the international community,” he added.

U.S. President Donald Trump ordered cruise missile strikes on a Syrian air base after he blamed Assad for the chemical attack, which killed at least 70 people, many of them children, in the Syrian town of Khan Sheikhoun. The Syrian government has denied it was behind the attack.

Speaking on “Fox News Sunday,” McMaster said the United States would take further action in Syria if necessary.

“We’re prepared to do more. In fact, we were prepared to do more two days ago,” McMaster said. “The president will make whatever decision he thinks is in the best interests of the American people.”

Russian President Vladimir Putin and Iran’s Hassan Rouhani said in a phone call that aggressive U.S. actions against Syria were not permissible and violated international law, the Kremlin said.

McMaster said Russian leaders were supporting “a murderous regime” and their actions would dictate the future of U.S.-Russian relations.

“Do they want it to be a relationship of competition and potential conflict,” McMaster said. “Or do they want it to be a relationship in which we can find areas of cooperation that are in our mutual interest?”

Tillerson stopped short of accusing Russia of direct involvement in planning or carrying out the attack, saying he had not seen “any hard evidence” to suggest Moscow was an accomplice to Assad.

But he said the United States expected Russia to take a tougher stance by rethinking its alliance with Assad because “every time one of these horrific attacks occurs, it draws Russia closer into some level of responsibility.”

(Reporting by Sarah N. Lynch and David Morgan; Editing by James Dalgleish)

Chinese, Czech presidents forge strategic partnership on Prague visit

By Jason Hovet and Jan Lopatka

PRAGUE (Reuters) – China’s President Xi Jinping and his Czech counterpart Milos Zeman signed an agreement on a strategic partnership on Tuesday, meant to step up business ties and investments.

Zeman has been keen to forge stronger ties with China and Russia since his election in 2013, rather than with the ex-communist country’s partners in NATO and the European Union, although the Czech government not the president is chiefly responsible for foreign policy.

EU relations with both Beijing and Moscow are tainted by disputes over human rights.

The partnership agreement puts the Czechs among about 15 other European countries that have similar ties.

Xi was given a special welcome to mark the first ever visit of a Chinese leader, including a dinner at the presidential residence and 21 artillery salvos in a ceremony at the historic Prague Castle, courtesies not extended to other visitors.

But it drew protests from opposition parties and human rights activists.

Police on Monday detained more than a dozen people who replaced Chinese flags on the main road from Prague airport to the city center with those of Chinese-ruled Tibet. There was a scuffle between pro-Tibet activists and groups of Chinese supporters.

Two demonstrations by activists were called on Tuesday outside Prague’s Lichtenstein Palace, where Xi is to meet Prime Minister Bohuslav Sobotka, and at the Prague Castle.

Czech government officials told Reuters the agreement does not deviate from standard EU language on human rights, diplomatic or economic relations, and reflected Czech interests in continued business relations with Taiwan, which China sees as a wayward province.

The Czechs are hoping to become a financial and air travel hub in central Europe for China, where Czech firms such as financial group PPF and Volkswagen’s Skoda Auto have been active.

Chinese investments in the Czech republic have so far included several acquisitions of financial, airline and brewery companies by a company called CEFC China Energy, whose ownership has not been disclosed.

“I wish that Czech Republic becomes … an entry gate for the People’s Republic of China to the European Union,” he said.

While the Czechs maintain the EU line on China, Zeman has made gestures others have not. Zeman attended a military parade in Beijing last September marking the end of World War Two, the only Western leader to do so.

(Editing by David Holmes)