Canada says it could have bilateral critical sector deals with US

By Promit Mukherjee

OTTAWA, Feb 26 (Reuters) - Canada is negotiating with the U.S. to remove tariffs on some critical sectors, and a deal could be wrapped into bilateral pacts alongside a review of the United States-Mexico-Canada free trade agreement, a Canadian senior minister said on Thursday.

Dominic LeBlanc, who is responsible for Canada-United States trade, also said that despite some U.S. officials casting doubt on the USMCA, private conversations between the three governments about the pact were not discouraging.

Canada is trying to persuade the United States to reduce or remove painful tariffs on key sectors such as steel, aluminum and automobiles that President Donald Trump's administration imposed last year. Canadian Prime Minister Mark Carney said last year that the talks on sectoral tariffs were likely to be incorporated into the broader USMCA review.

"We are still ready and anxious to do that work," LeBlanc told a business audience in Toronto, referring to removing sectoral tariffs.

"Those will be bilateral arrangements," LeBlanc said, adjacent to a trilateral trade agreement.

Trump has said that he could ditch the free trade deal as it was irrelevant for the United States, and could strike separate deals with Canada and Mexico instead.

"There is a public prosecution of the argument, the political argument in the United States. And there are the private government-to-government-to-government conversations which are not discouraging," said LeBlanc, who plans to meet U.S. Trade Representative Jamieson Greer next week.

Mexico already started formal negotiations with the United States on renewal of the USMCA.

LeBlanc said that he is not pessimistic about renewing the trilateral framework, given it is in the economic interests of the three signatories to keep it going.

The U.S.-Mexico-Canada free trade deal is up for review and needs to be completed by July 1.