Canada’s Carney reports progress in trade talks with Trump as he expands ties with Asia

TORONTO (AP) — Canadian Prime Minister Mark Carney said Saturday that he had a lengthy conversation with U.S. President Donald Trump and senior administration officials before leaving for Europe and Asia and that the two countries are making progress toward a trade deal after negotiations collapsed in August.

The comments came as Carney announced that Canada had substantially concluded free-trade negotiations with the Association of Southeast Asian Nations, a bloc of nearly 700 million people, and completed separate negotiations with the Philippines. Both agreements are part of Canada’s efforts to reduce its dependence on the United States during Trump’s trade war.

Carney was in the Philippine capital ahead of a key three-day summit of the Association of Southeast Asian Nations and their Asian and Western counterparts that starts Sunday.

“I had quite a long, substantive conversation with President Trump just before leaving for this trip,” Carney told reporters in Manila. “We are making progress. There is the possibility of a deal, a bilateral deal. But we’re not yet there.”

Carney said U.S. Trade Representative Jamieson Greer and Trump’s new White House chief of staff, Stephen Miller, also participated in the call.

Carney said Canada would not accept a deal that undermines its auto industry, which has been battered by Trump’s tariffs.

Canada suspended trade negotiations in August after last-minute U.S. demands that Ottawa considered unacceptable. Washington subsequently imposed 50% tariffs on about $20 billion in Canadian goods, prompting retaliatory Canadian tariffs in September. The countries have since resumed discussions.

Canada and the United States have one of the world’s largest trading relationships. A trade deal could reduce some tariffs on key sectors, including steel and aluminum.

Trump said before the midterms that the countries were “very close” to an agreement, while Carney said Washington had backed away from demands involving Canada’s culture, French-language protections and ability to negotiate other trade agreements.

U.S. tariffs on Canadian goods became an issue in the midterms, with Democrats blaming them for higher prices and pledging to challenge them.

The Democratic victories have left Canada with a dilemma: Accept a deal that reduces Trump’s tariffs but leaves some in place, or hold out for free trade as Congress prepares to challenge them.

The Canadian government estimates the ASEAN agreement could add nearly 2 billion Canadian dollars (US$1.4 billion) to Canada’s economy and create almost 14,000 jobs, particularly in agriculture and manufacturing. Officials hope to sign it next year.

The Philippines agreement, expected to be signed next year, covers more than 90% of tariff lines, Carney said. The Canadian government said the agreement could help triple Canadian exports to the Philippines by 2035.

Carney attended the European Political Community summit in Ireland before traveling to Manila for the ASEAN summit. He will also attend the Francophonie summit in Cambodia and the Asia-Pacific Economic Cooperation summit in China, where he is scheduled to meet President Xi Jinping.

Carney has made doubling Canadian exports to countries other than the United States by 2035 a central goal.