WASHINGTON—The Trump administration is signaling to Congress it would seek mostly modest changes to the North American Free Trade Agreement in negotiations with Mexico and Canada, a deal President Donald Trump called “a disaster” during the campaign.

According to an administration draft proposal being circulated in Congress by the U.S. trade representative’s office, the U.S. would keep some of Nafta’s most controversial provisions, including an arbitration panel that lets investors in the three nations circumvent local courts...