WASHINGTON (BLOOMBERG) - US Trade Representative Robert Lighthizer said it's possible Nafta partners will reach a tentative agreement next month to revamp the 24-year-old pact.

In congressional testimony on Thursday (July 26) in Washington, Mr Lighthizer said the timetable would meet the Mexican objective of having President Enrique Pena Nieto sign a new North American Free Trade Agreement before he leaves office in December.

That's because US trade law requires a three-month period after a deal is reached before the parties can sign it.

In other words, if the three countries don't strike a deal until September or even later, the incoming Mexican president, Mr Andres Manuel Lopez Obrado, would have to sign off on it after he takes office.

"You're probably looking at having to have some conclusion during the course of August, and my sense is that that's not an unreasonable time frame if everybody wants to get it done," Mr Lighthizer said in testimony to the Senate Appropriations Committee.

But Mr Lighthizer said Canada may be the sticking point in reaching a new deal.

"My hope is that we will before very long have a conclusion with respect to Mexico and that, as a result of that, Canada will come in and begin to compromise," he said. "I don't believe that they've compromised in the same way the United States has or Mexico has."

The Mexican peso reversed an earlier depreciation and advanced during Mr Lighthizer's hearing, while the Canadian dollar trimmed losses and briefly turned positive.

Speaking to reporters after talks with USTR officials Thursday in Washington, Mexican Economy Minister Ildefonso Guajardo said it's possible to reach a tentative deal in August.

Mr Jesus Seade, the chief Nafta negotiator for the incoming government, said he was cautiously optimistic about the direction of the talks.