By David Ljunggren
LA MALBAIE, Quebec (Reuters) - Canadian Prime Minister Justin Trudeau on Saturday rejected a U.S. demand for a sunset clause in NAFTA but said he was prepared to compromise on the issue, which is holding up talks to update the 1990s-era pact.
U.S. President Donald Trump - who regularly threatens to pull out of the North American Free Trade Agreement - insists that Canada and Mexico agree to a sunset clause that would allow a member nation to withdraw after five years.
"I think there are various discussions about alternatives that would not be that, and that would not be entirely destabilizing for a trade deal, and I think we are open to creativity," he said.
Talks to modernize NAFTA, which started last August, have effectively stalled as Canada and Mexico resist U.S. demands for major changes such as the sunset clause and boosting the North American content of autos made in the three nations.
Trudeau said he had told Trump that the talks had been made more complicated by a U.S. decision to impose tariffs on Canadian steel and aluminum, ostensibly for national security reasons. Canada has promised retaliatory measures on July 1.
"Canadians, we're polite, we're reasonable, but we will also not be pushed around."
(Reporting by David Ljunggren; editing by Grant McCool)
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