Contentious US-Canada trade talks ended with no deal to revamp the North American Free Trade Agreement after the mood soured, and President Donald Trump notified Congress of his intent to sign a bilateral trade pact with Mexico.
US and Canadian trade officials set plans to resume their talks on Wednesday with the aim of getting a deal all three nations could sign.
After four intensive days of talks in Washington between Canada and the United States, the biggest sticking points were familiar ones: US demands for more access to Canada's closed dairy market and Canadian insistence that a trade dispute settlement system be maintained, not scrapped as Washington wants.
"For Canada, the focus is on getting a good deal, and once we have a good deal for Canada, we'll be done," the country's foreign minister, Chrystia Freeland, told a news conference.
All three countries have stressed the importance of NAFTA, which underpins $1.2 trillion in regional trade. A bilateral deal announced by the United States and Mexico on Monday had paved the way for Canada to rejoin the talks this week.
But by yesterday the sentiment turned, partly on Mr Trump's explosive off-the-record remarks made to Bloomberg News that any trade deal with Canada would be "totally on our terms." He later confirmed the comments, which the Toronto Star first reported.
"At least Canada knows where I stand," he later said on Twitter.
Wow, I made OFF THE RECORD COMMENTS to Bloomberg concerning Canada, and this powerful understanding was BLATANTLY VIOLATED. Oh well, just more dishonest reporting. I am used to it. At least Canada knows where I stand!— Donald J. Trump (@realDonaldTrump) August 31, 2018
Mr Trump notified Congress that he intends to sign the trade pact by the end of November. Text of the deal will be published by around 1 October.
Ottawa has stood firm against signing "just any deal."
Some US lawmakers and business groups expressed concern about Canada's not yet being not yet part of the agreement.
Anything other than a trilateral agreement will not win Congressional approval and would lose business support, the chief executive of the US Chamber of Commerce, Thomas Donohue, said in a statement.
The Canadian dollar weakened to C$1.3081 to the US dollar after news of the talks' lack of a result first broke. Canadian stocks remained 0.5% lower. Global equities were also down following the hawkish turn in Mr Trump's comments on trade.
Following a meeting with Freeland, Mexican Economy Minister Ildefonso Guajardo said he was confident the United States and Canada would reach an agreement.
US Trade Representative Robert Lighthizer has refused to budge despite repeated efforts by Freeland to offer some concessions on dairy to maintain the independent trade dispute resolution mechanism under Chapter 19 of NAFTA, The Globe and Mail reported yesterday.
However, a USTR spokeswoman said Canada had made no concessions on agriculture, which includes dairy, but said that negotiations continued.