Trump almost tore up the Nafta pact previous year after visiting farmers in Wisconsin, a major USA dairy producer that Washington says has been hurt by Canadian protectionism.
American networks anxious that the CRTC's decision reduced the value of Canadian programming because the amount they pay for Super Bowl rights is determined by how much advertising they can sell in Canada, Lighthizer's report said.
The emergence of the cultural exemption as a bone of contention at this stage in the talks surprised those who have followed NAFTA closely.
Until now, the issue had largely remained in the background over the past year.
Canadian negotiator Chrystia Freeland left the USTR building a few hours ago and said Canada's positions were very clear and that "fresh ideas" were needed.
The U.S. and Canada are sparring over issues including U.S. access to Canada's protected dairy market and American plans to protect some drug companies from generic competition.
Talks to revamp the North American Free Trade Agreement are set to resume as United States and Canadian negotiators push to strike a deal amid President Donald Trump's threats to walk away.
He warned Congress on Wednesday not to "interfere" with the negotiations and said he would "simply terminate NAFTA entirely and we will be far better off". He said they've come a long way with Canada and now he thinks "they will treat us fairly".
Steve Bannon Calls David Remnick 'Gutless'
The New Yorker just needed to ignore Bannon , and not offer him a platform in the first place. I hope the New Yorker will do the right thing and cancel the Steve Bannon event.
Either way, Warner is convinced the cultural exemption will survive. The president also said the US would be fine if a deal can't be reached with its northern neighbour.
The negotiating teams face a new deadline in October when the text of the deal must be submitted to Congress.
"There are a number of things we absolutely must see in a renegotiated NAFTA", Trudeau told reporters on Tuesday.
"I think that's where we are".
"It was important to discuss a couple of issues face-to-face", she said, without elaborating. Quebec has insisted it's crucial to maintain protections in this area in order for it to maintain its francophone culture.
Trump said he will cancel the 24-year-old North American Free Trade Agreement among the United States and both its neighbors in favor of what he called the U.S. -Mexico trade agreement.
ENERGY: Benchmark U.S. crude declined 76 cents to $69.11 per barrel in electronic trading on the New York Mercantile Exchange while Brent crude, used to price global oils, shed 64 cents to $77.51 per barrel in London.
In a statement Wednesday, the Bank of Canada said more hikes should be expected thanks to encouraging numbers for business investment, exports and evidence that households are adjusting to pricier borrowing costs.
"As a small country, with a small population, up against a giant south of the border, it would be extremely hard for Canadian artists, authors, publishers, etcetera to withstand the onslaught of the American entertainment industry", he said.
But the talks will be dogged by President Donald Trump's repeated threats to leave Canada on the sidelines and proceed with Mexico, which reached a deal with Washington last week and could sign NAFTA 2.0 as soon as November 30.