U.S. Trade Representative Robert Lighthizer Robert (Bob) Emmet LighthizerWhiskey, workers and friends caught in the trade dispute crossfire GOP senator warns quick vote on new NAFTA would be 'huge mistake' Pelosi casts doubt on USMCA deal in 2019 MORE on Tuesday cast doubt on the prospects of the U.S. and Mexico reaching a deal with Canada on an updated North American Free Trade Agreement (NAFTA) by the Sunday deadline.

“The fact is, Canada is not making concessions in areas where we think they’re essential,” Lighthizer told the Concordia Summit in New York.

“We’re going to go ahead with Mexico,” he added. “If Canada comes along now, that would be the best. If Canada comes along later, then that’s what will happen.”

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The fast-track deadline requires Trump to submit the final legislation to Capitol Hill by Sept. 30, leaving just a few days to close significant policy gaps with Canada. Congress appears unlikely to approve an agreement that excludes Canada.

"I think Canada would like to be in the agreement,” Lighthizer said. “I think the U.S. would like them to be in the agreement, but there is still a fair amount of distance between us. There are very large issues."

The Trump administration is pushing Canada to withdraw its dairy subsidies, while Canada is demanding that the U.S. withdraw threats of auto tariffs and reconsider its demands on how trade disputes are settled.

Canadian Prime Minister Justin Trudeau told the Council on Foreign Relations in New York that there is room to build on the U.S.-Mexico deal, but reiterated that Canada would not sign a deal that goes against Canada’s interests.

“We know that Canada’s interests are what we have to stand up for and we will,” Trudeau said. “We are looking for the right deal.”

Updated at 2:59 p.m.