by Josh Wingrove and Andrew Mayeda

The U.S. and Canada are getting ready to decide on key issues as they work to strike a deal to update the North American Free Trade Agreement, Canada’s foreign minister said.

“Our officials did some work. They prepared some issues for me and Ambassador Lighthizer to take some decisions,” Foreign Minister Chrystia Freeland told reporters Thursday afternoon in Washington, as she headed to her latest meeting with U.S. Trade Representative Robert Lighthizer. 

The tone is becoming increasingly optimistic as the two countries approach a U.S. deadline to reach a deal by Friday, when President Donald Trump plans to notify Congress that he’ll sign a pact to replace the 24-year-old NAFTA. 

“This is a very, very intense set of conversations and I continue to feel that there is a lot of goodwill on all sides,” Freeland told reporters earlier Thursday. There’s still a lot of work to do in a short amount of time, she said.

Canadian Prime Minister Justin Trudeau will brief provincial premiers on Thursday about the discussions, after he and Trump both signaled Wednesday that an accord could be reached.

“We’re doing really well,” Trump told reporters at the White House. “They want to be part of the deal. And we gave ‘till Friday and I think we’re probably on track.” Trudeau acknowledged the Friday deadline cited by Trump, saying they were pushing toward it but will only sign the “right deal.” 

The tone sounded more positive than a Monday news conference at the White House, where Trump called outgoing Mexican President Enrique Pena Nieto on speakerphone to announce a two-country deal. He urged Canada to take it or leave it, and threatened to apply new tariffs on Canadian auto exports otherwise.

Deadline Looms 

The U.S. is emphasizing the Friday deadline, but there’s some wiggle room. Analysts have said they don’t necessarily need a full agreement by then, and Lighthizer has said he might be able to send a letter that leaves a door open to Canada joining.

“I think there’s a really good chance” to get a “deal in principle” by Friday if both countries compromise, Bruce Heyman, a former U.S. ambassador to Canada under President Barack Obama, told Bloomberg TV on Wednesday. “What that means though is there’s a lot of blanks that will need to be filled in” quickly to meet congressional deadlines, he said.

Dairy, Dumping 

Two key issues for the U.S. and Canada are dairy and anti-dumping dispute panels. The U.S. wants to dismantle Canada’s dairy system and kill the panels; Canada has signaled it would compromise on dairy and wants to preserve the so-called Chapter 19 panels. 

There are warnings that U.S. trade law will prevent, or impede, Trump from forging ahead on a quick timeline with only a two-country accord, and key figures in Congress are calling for Canada to be included. Lighthizer has said he believes he can proceed without Canada. The Friday deadline would allow a signing before Mexico’s president-elect, Andres Manuel Lopez Obrador, takes office on Dec. 1. 

--With assistance from Toluse Olorunnipa, Vivek Shankar, Debra Mao, Theophilos Argitis, Greg Quinn, Jennifer Epstein and Jennifer Jacobs.

To contact the reporters on this story: Josh Wingrove in Washington at [email protected] ;Andrew Mayeda in Washington at [email protected]

To contact the editors responsible for this story: Brendan Murray at [email protected] ;Michael Shepard at [email protected] Sarah McGregor, Randall Woods

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