CANADA is ready to offer the United States limited access to the Canadian dairy market as a concession in negotiations to rework the North American Free Trade Agreement (NAFTA), two Canadian sources with direct knowledge of Ottawa’s negotiating strategy said Tuesday.

U.S. President Donald Trump said at the White House that trade talks with Canada were going well and that Ottawa wants to make a deal. Chrystia Freeland, Canada’s foreign minister, returned to Washington on Tuesday for talks with U.S. Trade Representative Robert Lighthizer.

Canada’s protected dairy industry is one of three sticking points in NAFTA talks between the two countries, along with a system for settling trade disputes and cultural protections for Canadian media firms.

Trump has already struck a deal with Mexico, NAFTA’s third member, and has said he is prepared to leave Canada out of the revised deal if Ottawa fails to accept terms more favorable to the United States.

Canada’s politically powerful dairy farmers are likely to resist changes to the price controls and high tariffs that protect them from foreign competition. But as an Oct. 1 deadline to renegotiate NAFTA looms, Canada is prepared to offer similar concessions on the dairy industry to those that it agreed to in free trade deals with the European Union and Pacific Rim nations, the sources said.

“I think we understand there are certain issues on which we will need to compromise,” one of the sources said when asked about increased dairy access for the U.S. industry. (SD-Agencies)