(Adds comments from Mexican government spokesman in paragraphs10-11)By David LawderNEW YORK, Sept 25 (Reuters) - Canada is not makingconcessions needed to reach a deal with the United States for atrilateral NAFTA pact and is running out of time beforeWashington proceeds with a Mexico-only agreement, a top U.S.official said on Tuesday.U.S. President Donald Trump's administration recently beganincreasing the pressure on Canada, urging it to conclude a dealby Sunday or face exclusion from a revised North American FreeTrade Agreement.A spokesman for Canadian Foreign Minister Chrystia Freeland
brushed off the latest remarks from the United States, sayingCanada was not interested in focusing on timelines.U.S. Trade Representative Robert Lighthizer said there was"some distance" between the two sides on issues such as accessto Canada's dairy market and how best to settle trade disputes."The fact is, Canada is not making concessions in areaswhere we think they're essential," he said at the ConcordiaSummit in New York."We're going to go ahead with Mexico," he said. "If Canadacomes along now, that would be the best. If Canada comes alonglater, then that's what will happen."He added: "We're sort of running out of time."But Freeland's spokesman, Adam Austen, said Canada wouldonly sign a good deal."Our focus is the substance, not timelines. We will continueto negotiate with a view to getting a deal that is in Canada'snational interest," he said.Mexican government spokesman Eduardo Sanchez said on Twitterlate on Tuesday that Mexican President Enrique Pena Nieto andCanadian Prime Minister Justin Trudeau, held a bilateral meetingon the sidelines of the U.N. General Assembly."The leaders exchanged points of view on the process ofrenegotiation of NAFTA," said Sanchez.Lighthizer and Freeland are also in New York for the U.N.meeting but it is unclear whether they will meet.U.S. automakers and congressional aides now believe a dealwith Canada is not possible by the deadline, which they saidwould most likely prompt the United States to move ahead with abilateral agreement with Mexico.
But they also predicted new talks with Canada in anotherattempt to settle outstanding issues before the signing withMexico, which would be set for Nov. 30.
'HOPEFULLY END UP WITH SOMETHING'The Trump administration has said the text of an agreementis needed by Sunday to allow the current Mexican government tosign it before it leaves office at the end of November.Trump has demanded major changes to NAFTA, which he has saidcaused U.S. manufacturing jobs to move to low-wage Mexico.Markets are nervous about the impact on a deal that underpins$1.2 trillion in annual trade.Canadian officials have said that despite the U.S. threatsto go it alone with Mexico, they do not believe Trump can byhimself turn the 1994 pact into a bilateral deal.U.S. business groups, alarmed by the potential disruption tothe three increasingly integrated economies, have lobbied theWhite House to keep NAFTA as a trilateral deal.Trudeau, who has repeatedly stated he would rather walk awayfrom NAFTA than sign a bad deal, spoke before Lighthizer at anevent hosted by the Council on Foreign Relations in New York andtook a more cautious tone."They (the United States and Mexico) made certainagreements," he said. "I think there's a possibility there tobuild on what they agreed.""With Mexico, we're not going to say: 'No deal' because ofCanada," Lighthizer said. "That doesn't make any sense at all,so hopefully we'll end up with something with Canada."
(Reporting by David Lawder in New York; Additional reporting byDavid Ljunggren in Ottawa, David Shepardson in Washington andAnthony Esposito in Mexico City; Writing by David Ljunggren;Editing by Peter Cooney)