UPDATE 1-Mexico president vows to defend NAFTA, nation's 'dignity'

(Adds details on Trump comment about South Korea trade deal, NAFTA talks schedule)

MEXICO CITY, Sept 2 (Reuters) - Mexican President Enrique Pena Nieto on Saturday defended free trade and young migrants in the United States, saying his government would not accept insults against "national dignity" from the administration of U.S. President Donald Trump.

Trade negotiators from Canada, the United States and Mexico are working through the weekend in Mexico City to present more proposals for a renewed North American Free Trade Agreement, which Trump just this week threatened to rip up.

Pena Nieto, in his annual address to the nation, sent "warm greetings" and pledges of solidarity to the young Mexicans enrolled in a program that protects immigrants who entered the United States illegally as children.

Trump is expected to announce on Tuesday whether he will end the Deferred Action for Childhood Arrivals program, known as DACA, that was put in place under former President Barack Obama and which protects nearly 800,000 young men and women from deportation.

"The relationship with the new government of the United States, like any other nation, must be based on irrevocable principles: sovereignty, defense of the national interest and protection of our migrants," Pena Nieto said.

"We will not accept anything that goes against our national dignity," he told a crowd of politicians and the country's elite, who rose at that point to deliver the most vigorous standing ovation of his address.

Trump this week also insisted again that Mexico would eventually pay for his proposed wall on the southern U.S. border to block the flow of illegal immigrants and drugs.

Pena Nieto shied away from mentioning the wall but said Mexico would promote the recognition of migrants for their contributions and reject discrimination against them.

Since Trump took office, pledging to crack down on illegal immigration, Mexico has increased its legal defense teams at consulates.

Most of Pena Nieto's speech focused on the government's achievements, and the leftist opposition said he skated over problems such as rising crime.

Pena Nieto also said Mexico would continue to defend NAFTA as a vehicle to further integrate the region.

"The negotiating team has precise instructions to participate in this process with seriousness, good faith and a constructive spirit," he said, "always putting first the interest of Mexico while reaching for a result where all three countries win."

Trump repeatedly threatened to pull out of NAFTA if talks do not go his way and on Saturday said he would discuss next week with his advisers whether to withdraw from a trade deal with South Korea that he has also long criticized.

Top Mexican officials said Latin America's No. 2 economy would walk away from negotiations if Trump moves to withdraw from the deal.

Teams from the three countries kicked off a second round of closed-door talks on Friday on 25 areas of discussion.

Negotiators were going to take until Monday to get to one of the thorniest issues, so-called rules of origin that set what percentage of parts in goods need to come from NAFTA countries in order to get tariff breaks, according to a schedule.

Trump has been pushing for higher U.S. content in goods like automobiles made in Mexico.

Francisco Rosenzweig, a former Mexican trade negotiator who is now lobbying for the country's private sector, said he had seen no "disruptive" proposals from the U.S. team in the working groups but that Trump's threats should be taken seriously.

(Writing by Michael O'Boyle; Editing by Lisa Von Ahn and Bill Trott)