Mexico will seek deal with Canada if NAFTA talks fail: Lopez Obrador

MEXICO CITY (Reuters) - Mexico's incoming government will pursue a bilateral deal with Canada if talks to overhaul the North American Free Trade Agreement falter, Mexican president-elect Andres Manuel Lopez Obrador said on Friday.

After more than a year of talks to modernize the NAFTA trade pact between the United States, Mexico and Canada, the United States and Mexico reached a side deal in late August.

Days later, Canada began negotiating with the United States to close a deal on the 24-year-old trade pact. But the talks have hit an impasse over U.S. threats to impose tariffs to Canadian auto exports.

"We would like the government of the United States and the government of Canada to come to an agreement so the treaty can be trilateral, as it was originally signed," said Lopez Obrador, a veteran leftist who takes office in December.

"But in the event that the governments of the United States and Canada do not come to an agreement ... we would have to maintain the bilateral deal with the United States and seek a similar deal with Canada."

With just over a week to go before a U.S.-imposed Oct. 1 deadline to publish the text of a deal, the United States and Canada have still not agreed on terms, White House economic adviser Kevin Hassett said on Friday.

Speaking with Fox News Channel, Hassett said the United States was getting "very, very close" to having to advance in its commercial deal with Mexico, leaving Canada behind.

Markets in all three countries have suffered amid uncertainty about the future of the pact, which underpins $1.2 trillion in annual trade.

(Reporting by Diego Ore, writing by Julia Love; Editing by James Dalgleish)