U.S. President Donald Trump said on Wednesday he was open to bilateral trade pacts with either Canada or Mexico if a three-way deal cannot be reached to substantially revise the North American Free Trade Agreement.
Asked by a reporter if he could envision maintaining free trade with Canada if NAFTA talks sour with Mexico, Trump said: "Oh sure, absolutely. It's possible we won't be able to reach a deal with one or the other, but in the meantime we'll make a deal with one."
Trump added that a "very creative" deal was still possible to benefit all three countries.
Trump's comments came at a White House meeting with Canadian Prime Minister Justin Trudeau, who was in Washington to promote NAFTA's benefits as a new round of renegotiations began near Washington.
Asked about Trump's comments at a news conference later, Trudeau said he was still optimistic about the chances of modernizing the 1994 trade pact.
"I continue to believe in NAFTA ... so saying, we are ready for anything, and we will continue to work diligently to protect Canadian interests," Trudeau said.
Trudeau added that Canada was "very much aware of and very braced for" Trump's unpredictability, but his government would work in a "thoughtful, meaningful way towards getting a good deal."
Mexican Economy Minister Ildefonso Guajardo, speaking on Mexican radio, praised Trump's comments as "very balanced" to include the possibility of a deal with either country and hold out hope for a creative solution.
The U.S. Chamber of Commerce on Tuesday accused Trump's administration of trying to sabotage the talks with "poison pill proposals," including demands for more favorable treatment for the U.S. side on car production, and a "sunset clause" to force regular negotiations.
In his appearance with Trudeau, Trump said: "We'll see what happens" when asked whether NAFTA was doomed.
"It's possible we won't be able to make a deal, and it's possible that we will," he said. "We'll see if we can do the kind of changes that we need. We have to protect our workers, and in all fairness, the prime minister wants to protect Canada and his people also."
U.S. Commerce Secretary Wilbur Ross, one of Trump's top trade advisers, downplayed the chances that a NAFTA termination would become necessary.
"We don't hope it will, we don't desire that it will, we don't believe that it will, but it is at least a conceptual possibility as we go forward," Ross said.
But U.S. and Mexican corporate chief executives gathered in Mexico City said they would be better off with no NAFTA than be saddled with a "bad agreement."