Canadian Finance Minister William Morneau said Thursday that he was optimistic for a new deal on North American trade, calling negotiations an "opportunity for improvement."

A day after US President Donald Trump warned that NAFTA talks between Canada, the United States and Mexico could fail -- and that the pact could be replaced by bilateral treaties -- Morneau said friction is natural in any trade deal.

"We all understand that it has worked," he said of the 23-year-old North American Free Trade Agreement, before adding, "As we think about redoing trade agreements between Canada, the US and Mexico, there is opportunity for improvement."

Trump made revamping or ending NAFTA -- which he has called "a terrible deal for our country" -- a core pillar of his election campaign as he promised more benefits for US workers in international trade deals.

- 'Some friction' -

Just as a fresh round of talks opened Wednesday in the Washington suburb of Arlington, Virginia, Trump gave a direct warning to visiting Canadian Prime Minister Justin Trudeau.

"If we can't make a deal, it'll be terminated and that will be fine," Trump said.

But Morneau sought to calm worries that the NAFTA negotiations could be headed toward a dead end.

"It's going to continue as we figure out new rules, there is going to be some friction," he said on the sidelines of the World Bank-International Monetary Fund annual meetings in Washington.

He said it was important to make sure the populations affected understand how the treaty benefits them.

"There's a path to be optimistic," he said.

Trudeau was heading to Mexico City after leaving Washington for talks with President Enrique Pena Nieto.

source: AFP