WASHINGTON: Canada is increasingly optimistic it can reach a deal with the United States to salvage the North American Free Trade Agreement, although it may take until the end of September, a source with direct knowledge of the talks said on Friday.

US and Canadian officials resumed their negotiations this week to modernise the 1994 pact, which governs $1.2 trillion a year in trade between the United States, Canada and Mexico and supports hundreds of thousands of jobs.

President Donald Trump has struck a trade deal with Mexico and threatened to push ahead without Canada, a move that would kill Nafta.

The talks in Washington are focused on Canada’s dairy supply system, which the United States says hurts its exports, Ottawa’s desire to keep Nafta’s Chapter 19 dispute resolution mechanism and Canadian media laws that favor domestically produced content.

The Canadian source, who declined to be named given the sensitivity of the situation, said Canadian negotiators thought it was quite possible the talks would continue until the end of this month.

A US official told Reuters on Thursday that Canada needed to move further on dairy.

Published in Dawn, September 8th, 2018