Trade worries cloud Nafta talks

The three leaders want to make Nafta more effective

Plans to modernise the North American Free Trade Agreement (Nafta) will take centre stage when the leaders of the US, Canada and Mexico meet on Monday.

The 14-year old agreement, which has generated $700bn in cross-border trade, has come under increasing fire in the US where it is seen to have cost jobs.

The trade deal is a cornerstone of a broad-ranging Security and Prosperity Partnership agreed by the trio in 2005.

Thousands of protesters are gathering in Quebec ahead of the two-day summit.

'Big challenge'

Police have established a 25km (15 mile) security cordon around the resort complex, a 90-minute drive from Ottawa, where President George W Bush, Mexico's President Felipe Calderon and Canada's Prime Minister Stephen Harper are to meet.

Critics of Nafta and other free trade deals argue that they have destroyed jobs in poorer countries and damaged the environment.

NAFTA FACTS Started in 1994 Allows free trade between US, Canada and Mexico Trade between partners grew at over 10% per year Side agreements regulate environment, labour Critics say 1m US manufacturing jobs were lost

Trade between the three partners has increased by more than 10% a year since the agreement, which paved the way for tariffs to be cut on key products, was ratified in 1994.

A leading Mexican official said the forthcoming talks were aimed at "bringing the agreement up to date and making it more cutting-edge".

"Our big challenge is to resolve access issues concerning non-tariff barriers," said Beatriz Leycegui Gardoqui, Mexico's undersecretary for the economy.

Protectionist pressures

Growing protectionist sentiment in Washington has meant Nafta and other free trade agreements have come under growing scrutiny.

Leading Democrat Presidential candidates have all attacked the agreement saying that it discriminates against the US because it enforces labour laws more strictly than others.

There is also unease about Nafta in Mexico with farmers opposed to the imminent liberalisation of the maize industry to corn imports from the US.

The three leaders are expected to discuss a range of other issues including co-operation over security and energy and safety concerns over Chinese-made imports.