Mexico sees "room" for NAFTA deal despite gaps

Mexico believes the three parties to the North American Free Trade Agreement (NAFTA) can reach a deal to update the terms of the accord, despite their current differences, Economy Minister Ildefonso Guajardo said on Friday.

"We have room to reach an understanding," Guajardo told attendees at the opening of a national textile convention in Cancun, adding: "We know the complexity of this negotiation."

Canada, the United States and Mexico have been renegotiating the two-decade-old trade agreement to address U.S. grievances and include fields, such as e-commerce, that were not relevant back in 1994.

One of the main U.S. preoccupations has been its bloated trade deficit with Mexico, which Guajardo downplayed not as the main cause of a poorly performing economy, but as the result of monetary and fiscal policies.

"We can help them with their concern about the trade deficit so they have a favorable redistribution of trade, as long as it is through the expansion of trade and not the contraction of trade," said Guajardo.

The three sides concluded the fourth round of talks on Tuesday in Washington, with "significant conceptual gaps," said U.S. Trade Representative Robert Lighthizer.

Washington said a new NAFTA should help it reduce its 64-billion-U.S-dollar trade deficit with Mexico and 11-billion-U.S.-dollar deficit with Canada.

To do that, the United States has proposed making it easier to slap import duties on some Mexican and Canadian imports.

Mexico will host the fifth round of talks on Nov. 17-21, when the parties plan to schedule additional rounds for the first quarter of 2018.