Chances of U.S. leaving NAFTA must be taken seriously: Canada

LONDON, Ontario (Reuters) - The United States must be taken seriously when it says it might walk away from NAFTA, Canada's foreign minister said on Thursday, a day after government sources said Ottawa was increasingly convinced U.S. President Donald Trump would pull the plug.

Chrystia Freeland also told reporters that Canada had come up with some creative ideas in a bid to solve the toughest challenges facing negotiators when they meet for the sixth and penultimate round of talks to modernize the North American Free Trade Agreement later this month.

Trump has repeatedly threatened to walk away from the 1994 pact between the United States, Canada and Mexico unless major changes are made.

"The United States has been very clear since before the talks started that ... (this) was a possibility and I think we need to take our neighbors at their word, take them seriously, and so Canada is prepared for every eventuality," Freeland told reporters on her way to a two-day cabinet meeting.

Freeland also said it was "absolutely possible to have a positive outcome" at the Jan. 23-28 talks in Montreal if all three sides showed good will.

The Canadian and Mexican currencies, as well as stocks of firms that rely heavily on North America's integrated economy, fell on Wednesday after government sources told Reuters they saw an increased likelihood of a U.S. withdrawal.

(Reporting by David Ljunggren; Editing by Chizu Nomiyama and Andrea Ricci)