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UPDATE 2-Top U.S. NAFTA negotiator sees no problem with pace of talks

(Adds Canadian foreign minister detailing areas of progress)

OTTAWA, Sept 25 (Reuters) - The top U.S. negotiator at talks to modernize the NAFTA trade pact on Monday dismissed questions about why his team had so far failed to produce specific proposals on key issues, saying "I don't see a problem."

Officials from the United States, Mexico and Canada are in Ottawa for the third of seven planned rounds of talks. The U.S. delegation has yet to unveil its precise position on several points, prompting concerns the process to update the 1994 pact could drag on beyond the scheduled end-December finish.

"We've been working very hard so I don't see a problem," John Melle told reporters when pressed on the matter. "We're moving across the board, so it's very ambitious."

Canadian Prime Minister Justin Trudeau earlier predicted some tough days ahead for negotiators and declined to say whether he thought the talks could meet the deadline.

"The negotiations are still under way and of course there will be more difficult discussions in some cases than others," he told a Toronto news conference.

He added: "The negotiations move forward at a certain pace and we respect that reality."

U.S. President Donald Trump, who frequently describes the treaty as a disaster, is threatening to walk away unless major changes are made.

Canada's chief negotiator on Sunday said he did not expect the U.S. side to present detailed proposals in Ottawa on major issues such as dispute settlement, the dairy sector and tougher rules for North American content on autos.

Foreign Minister Chrystia Freeland later told reporters that the three sides had made "solid progress" on topics such as electronic border forms and harmonization of regulations.

Pressed on the chances of finishing by the end of the year, she repeated earlier statements that "we want a good deal, not any deal". Trade talks traditionally leave the toughest topics until the end, she added.

Canadian officials say it is still possible to meet the year-end deadline although they concede there are significant uncertainties about the timetable.

At his Toronto event, Trudeau repeated a promise to defend Canada's system of tariffs and import restrictions designed to defend its dairy sector. The U.S. industry dislikes the measures.

U.S. Trade Representative Robert Lighthizer, Freeland and Mexican Economy Minister Ildefonso Guajardo, the three top officials driving the talks, will meet in Ottawa on Tuesday and Wednesday, the last two days of the third round.

(Reporting by David Ljunggren in Ottawa; Editing by Nick Zieminski and James Dalgleish)