Talks between the US and Canada about amending the North American Free Trade Agreement (Nafta) are heading into their final day with no deal in sight.

US President Donald Trump set a Friday deadline for Canada to sign a new agreement with the US and Mexico.

He has threatened to leave Canada on the sidelines since announcing a breakthrough with Mexico on Monday.

However, he and Canadian Prime Minister Justin Trudeau have both said they are hopeful a deal is close.

US Trade Representative Robert Lighthizer is holding talks in Washington with Canadian Foreign Minister Chrystia Freeland aimed at reaching a new deal.

Ms Freeland said on Friday morning that negotiators are “not there yet” on a deal that can be agreed upon by both parties, and that talks would continue later in the day.

“We’re looking for a good deal, not just any deal,” she said. “And we’ll only agree to a deal that is a good deal for Canada.

Issues that have led to discord between the neighbouring countries include Canada’s dairy trade rules, dispute-handling mechanisms and patent protections for medicines.

Dairy in particular appeared to be a stumbling block in the negotiations on Friday, with US officials saying Canada had made no concessions on agriculture and Canadian Prime Minister Justin Trudeau saying he was standing firm on the issue.

Mr Trump has threatened to levy tariffs on car parts exported from Canada to the US if a deal is not reached.