Canada's Trudeau cites 'positive momentum' on trade deal as U.S. official visits

By David Ljunggren

OTTAWA (Reuters) - Canadian Prime Minister Justin Trudeau on Wednesday cited "positive momentum" in the U.S. process to ratify a new North American trade deal, which has been in limbo for months amid concerns over labor standards.

The U.S.-Mexico-Canada Agreement (USMCA) was signed almost a year ago by the three countries, ending a period of difficult negotiations after U.S. President Donald Trump demanded the North American Free Trade Agreement be renegotiated or scrapped.

But the Democratic-led U.S. House of Representatives has yet to hold a formal vote to ratify it. Democrats want better mechanisms to enforce labor and environmental protections and to ensure the deal does not lead to higher drug prices.

U.S. House Speaker Nancy Pelosi said last week she would not rule out a vote on the deal slipping into next year, but hoped it could happen sooner.

"It is a pleasure to see the positive momentum that seems to be happening on this renewal of this very important trade deal," Trudeau said at the start of talks in Ottawa with the Democratic chairman of the House Ways and Means Committee, Richard Neal.

Mexico has already ratified the new deal, but Canada is holding back on the grounds it wants to move in tandem with the United States on the trade agreement that will replace NAFTA.

Canadian Foreign Minister Chrystia Freeland has made it clear that Ottawa has no intention of reopening the pact.

Freeland said in a statement that the two sides had discussed "the shared commitment ... to support the implementation of important labor reforms in Mexico."

Neal, who also met with Canadian Labour Minister Patty Hajdu, said the trip was productive. "I particularly stressed the importance of meaningful enforcement mechanisms that ensure the protection of workers in all three nations and of our shared environment," Neal said.

Neal's committee said a U.S. House Democratic working group had made "substantial progress" in negotiations with U.S. Trade Representative Robert Lighthizer, and was working to resolve remaining critical questions on "worker protections and labor-specific enforcement mechanisms."

U.S. Senate Finance Committee Chairman Chuck Grassley told reporters on Wednesday he felt more "positive" about getting the agreement ratified this year after his discussions with Pelosi and Republicans on the House Ways and Means Committee.

A Canadian government source, who requested anonymity given the sensitivity of the situation, said: "Our interlocutors are not the Democrats but the White House."

Freeland said she discussed the ratification process this week with Lighthizer, who led the Trump administration's efforts to negotiate the trade pact.

(Reporting by David Ljunggren; Additional reporting by Andrea Shalal in Washington; Editing by Leslie Adler and Peter Cooney)

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