MEXICO CITY (Reuters) - U.S. Energy Secretary Rick Perry promised on Thursday to promote cross-border electricity trade and investment with Mexico and said he expected talks aimed at updating the North American Free Trade Agreement (NAFTA) to proceed quickly.

Slideshow ( 3 images )

Standing beside his Mexican counterpart Pedro Joaquin Coldwell during a visit to Mexico City, Perry said it was a top priority to agree on a North American energy strategy, develop untapped resources and diversify energy supplies.

“Mexico’s prosperity is inextricably intertwined with our prosperity,” Perry said at a news conference.

His comments underscored a different tone in bilateral relations from earlier this year, when U.S. President Donald Trump threatened to impose punitive tariffs on Mexican goods to protect U.S. industry, and to pull out of NAFTA altogether if he cannot rework it in the United States’ favor.

Trump hailed progress on trade after meeting his Mexican counterpart last Friday, on the sidelines of the Group of 20 leaders’ summit in Hamburg, Germany, and Mexico said it expected a general agreement on reworking NAFTA by the end of 2017.

With Mexico, the United States and Canada expected in mid-August to begin negotiations to update NAFTA, Perry said he was particularly supportive of those talks in the energy sector.

He said he expects the NAFTA negotiations to progress relatively quickly and lead to an agreement “ASAP”.

Perry also said the three nations would establish a work plan to accelerate development of untapped energy resources and diversify energy supplies.

Joaquin Coldwell said he and Perry agreed to work on expanding cross-border energy infrastructure and to encourage the use of nuclear energy. The two countries need to modify rules governing electricity markets to create incentives for cross-border electricity trade, he added.

In a bid to reverse years of declining output, Mexico in 2013 changed its constitution to end a 75-year production and exploration monopoly enjoyed by state oil company Pemex.

Due to a lack of refineries, Mexico relies on the United States for much of its gasoline supply.

Mexico’s government is auctioning off exploration and production rights for oil and gas fields to local and foreign companies, but fresh output streams from the new entrants are not expected for several years.