NAFTA talks progress on energy, telecoms, customs - lobby group

MEXICO CITY (Reuters) - Trade negotiators from Canada, the United States and Mexico have made headway on issues including energy, small businesses and telecommunications in talks to revamp the North American Free Trade Agreement (NAFTA), the head of a top business lobby said on Monday.

"I think we've made a lot of progress," said Juan Pablo Castañon, head of the Consejo Coordinador Empresarial (CCE), which represented Mexico's private sector during the trade talks.

Castañon highlighted advances in energy, telecommunications, investment, as well as improving conditions for small-and-medium-sized firms and streamlining the customs procedures.

He was talking to reporters near the close of the fourth day of a second round of negotiations to modernize the 23-year-old trade accord that underpins more than $1.2 trillion in annual trade. The round is set to wrap on Tuesday in Mexico City.

The optimism stands in contrast to comments from U.S. President Donald Trump last week, who said he could move to withdraw from NAFTA if he does not get concessions to reduce a U.S. trade deficit of around $64 billion with Mexico.

Castañon said talks on the automotive sector, labor and dispute resolution mechanisms were among the areas least advanced in the negotiations so far.

Those issues remain some of the toughest sticking points on which to broker consensus and all three countries have previously flagged they could walk away from the table without any resolution on such matters.

Free-trade negotiations often take years to conclude, but delegates in the new round of NAFTA dialogs are seeking to finish the current talks over a very tight timeframe.

Negotiators aim to end the talks before Mexico's presidential election campaign begins in earnest next year and the U.S. mid-term elections later in 2018.

The next round of talks will start on Sept. 24 in Ottawa, said Castañon.

So far talks have largely focused on proposing preferred language for less controversial areas, such as digital and cross-border services trade, according to government officials and industry representatives briefed.

But negotiators have not started banging out the wording for more controversial subjects, including rules of origin and dispute resolution mechanisms.

U.S. Trade Representative Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland and Mexican Economy Minister Ildefonso Guajardo are scheduled to hold a joint news conference on Tuesday afternoon after talks conclude.

(Reporting by Anthony Esposito; Editing by Sam Holmes)