NAFTA teams ready to 'start solving' stalled issues: Mexico

By David Lawder

WASHINGTON (Reuters) - Mexican Economy Secretary Ildefonso Guajardo said on Friday that the negotiating teams for the North American Free Trade Agreement (NAFTA) are ready to kick off talks again after they stalled last month.

NAFTA talks between the United States, Mexico and Canada had stalled since June when the United States imposed tariffs on Mexican and Canadian steel and aluminium. Both countries responded with levies on products including U.S. pork, ketchup and Kentucky bourbon.

"I think we have agreed on the process and the method on how to start solving from the less complex to the most complex issues and that's the way we're approaching this," said Guajardo, who is in Washington for talks with U.S. Trade Representative Robert Lighthizer and President Donald Trump's son-in-law and senior adviser, Jared Kushner.

Mexico and the United States agreed on Thursday to step up talks on updating NAFTA in hopes of reaching an agreement on major issues by August, after Guajardo had what he described as "constructive" and "very positive" talks with Lighthizer and Kushner.

Mexico's President Enrique Pena Nieto said in Mexico City on Friday that he hoped the accelerated talks would allow for a deal in August.

Asked if Canadian Foreign Minister Chrystia Freeland will join the talks soon, Guajardo said: "What I am expecting is that we have to engage with Canada, either two bilaterals, one trilateral, whatever we agree to."

Freeland visited Mexico on Wednesday and she and Guajardo insisted that NAFTA remain a trilateral pact, in response to Trump's suggestion that he could seek a bilateral deal with Mexico.

Guajardo was joined in Washington by Jesus Seade, whom Mexican president-elect Andres Manuel Lopez Obrador has tipped as his lead trade negotiator.

Mexico's government said in a statement that teams from both nations would continue to work over the coming days to prepare for an upcoming ministerial meeting.

"NAFTA talks seem to be entering another wave of optimism now that the Mexican election has been decided ... But we should not rush to pop the champagne just yet," Fernando Murillo, senior economist for Oxford Economics, said in a note to clients.

"NAFTA talks have gone through several painful waves of optimism and pessimism over the last year, and it is still unclear how the contentious issues, which include automotive rules of origin, five-year sunset provision, and dispute settlement process will be sorted out," he added.

(Reporting by David Lawder; Writing by Anthony Esposito; Editing by Susan Thomas)