Trudeau sees high chance of NAFTA deal with US, Mexico
Prime Minister Justin Trudeau warned that the proposed US levies would cause significant pain on both sides of the border AFP/File / PUNIT PARANJPE

Canadian Prime Minister Justin Trudeau signalled Thursday he saw a strong chance of reaching a deal with the US and Mexico to revamp the North American Free Trade Agreement.

"We have a high chance of reaching a win-win-win deal for Canada, the United States and Mexico," Trudeau told reporters.

"With the pressures of the elections in Mexico, and the US elections, if we could announce something at the Summit of the Americas, that would be great," he added, in reference to the April 13-14 gathering of regional leaders in Peru.

Foreign Minister Chrystia Freeland, meanwhile, headed to Washington to meet with her counterpart, US Trade Representative Robert Lighthizer, who on Wednesday met with Mexican Economy Minister Ildefonso Guajardo, to try to reach an agreement in principle on NAFTA.

The trio are to get together for a working dinner later, according to public broadcaster CBC, and hold talks on Friday.

Freeland's office said negotiators in seven rounds of talks since last August had made "some good progress" in overhauling the 24-year-old trade pact.

Several stumbling blocks remain to be resolved, particularly Washington's proposals on rules of origin for the auto manufacturing, a "sunset clause" for the agreement and a dispute resolution mechanism.

But the administration of US President Donald Trump is increasing pressure to quickly reach a new trade deal at time when uncertainties about cross-border commerce are weighing on Wall Street, and ahead of July's presidential elections in Mexico and November's midterm US congressional elections.

The White House must also contend with market jitters over Trump's new import tariffs on metals and Chinese-made goods, and Beijing's response, which has roiled the stock markets.