Canada and the United States are pushing to finalize a new trade agreement before another round of U.S. tariffs takes effect this weekend.
Canadian Trade Minister Dominic LeBlanc and chief negotiator Janice Charette met U.S. Trade Representative Jamieson Greer in Washington on Wednesday.
The talks came after U.S. President Donald Trump delayed planned 50 percent tariffs on about $20 billion worth of Canadian goods for three days.
Trump says deal is close
Trump has said both countries reached a deal in principle. However, the agreement still needs to be finalized.
Canadian Prime Minister Mark Carney has taken a more cautious approach. He said the two sides have made significant progress, but several major issues remain unresolved.
The latest deadline is 12:01 a.m. ET on Saturday.
If negotiators fail to reach a final agreement, the new tariffs could affect products that normally receive preferential treatment under the U.S.-Mexico-Canada Agreement.
As a result, Canadian exporters are closely watching the negotiations.
Auto tariffs remain a key issue
The auto sector remains one of the biggest obstacles in the talks.
Canada wants the United States to reduce its existing 25 percent tariff on Canadian vehicles and auto parts.
Ottawa is reportedly pushing for a 10 percent tariff rate. Meanwhile, Washington has offered a rate of 15 percent.
The two sides also disagree over how North American content should be calculated for tariff purposes.
In addition, negotiators must decide whether any tariff relief would cover products beyond passenger vehicles.
Other trade disputes remain
The talks also cover Canadian policies affecting U.S. dairy, alcohol and vehicle exports.
The White House says Canada has agreed to address policies that Washington considers unfair. However, Canadian officials have not publicly confirmed the exact concessions under discussion.
Despite those differences, both governments say negotiations are moving forward.
LeBlanc said officials are working toward a finalized agreement. Carney has also stressed the need for greater certainty for Canadian industries.
Several sectors have already been affected by U.S. tariffs, including autos, steel, aluminum and forest products.
Trump has also raised the possibility of reviving the Keystone XL oil pipeline. However, it remains unclear whether the project is formally part of the current trade talks.
With the tariff deadline approaching, both sides now face pressure to turn recent progress into a signed agreement.
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