CANADA’S top trade negotiator said Friday she and her U.S. counterpart were making “very good progress” in talks to save the North American Free Trade Agreement (NAFTA) amid increasing Canadian optimism that a deal could be reached, even if a conclusion did not appear imminent.

Canadian Foreign Minister Chrystia Freeland repeated her upbeat assessment of the negotiations, again terming them constructive, as she spoke to reporters after a meeting in Washington with U.S. Trade Representative Robert Lighthizer.

“We are certainly making very good progress at understanding each other, understanding what each side needs,” Freeland said.

But the talks Friday were not headed toward an immediate conclusion. Lighthizer is scheduled to be in Brussels today for trade talks with the European Union’s trade commissioner, Cecilia Malmstrom, and is due back in Washington on Tuesday.

The main sticking point in the U.S.-Canada NAFTA talks appeared to be Canada’s dairy quota regime, according to the White House’s top economic adviser, Larry Kudlow, who spoke before the start of the latest talks.

U.S. President Donald Trump has struck a trade deal with Mexico and threatened to push ahead without Canada, a move that would kill NAFTA, which covers US$1.2 trillion in trade between the three countries, and further spook financial markets.

Other sticking points include Ottawa’s desire to keep the 1994 pact’s Chapter 19 dispute resolution mechanism, and Canadian media laws that favor domestically produced content.

A Canadian source said Canadian negotiators thought it was quite possible the talks would continue until the end of this month.(SD-Agencies)