MEXICO CITY (Reuters) – U.S., Canadian and Mexican negotiators are zeroing in on ways to enshrine Mexican President Enrique Pena Nieto’s sweeping energy reforms into a updated North American Free Trade Agreement, Mexico’s chief negotiator said on Saturday. The 2014 reforms wrung control of the country’s oil and gas industry from state hands, opening it up to private investment, and incorporating them into the 23-year-old NAFTA is seen as a means to help preserve them for the long run. “We are working in this particular sense, analyzing each of the elements that need to be included in the energy discussion to reflect the reform Mexico established,” Mexico’s chief trade negotiator, Kenneth Smith, said on Saturday after a bargaining session in the second round of NAFTA modernization talks. Smith, speaking to reporters as he walked side-by-side with his counterparts John Melle of the United States and Steve Verheul of Canada, added that negotiators would “search for mechanisms that allow us to incorporate ourselves in a positive manner in the energy industry.” Trade negotiators from the three nations are working through the weekend in Mexico City to present more proposals to revamp NAFTA, an accord that underpins over $1.2 trillion in annual cross-border trade. When NAFTA was enacted in 1994, Mexico’s energy industry was closed and Pena Nieto’s reforms ended a decades-long monopoly for federal oil firm Pemex [PEMX.UL] and ensured competitive oil auctions. Incorporating them would help protect them from any governments that might want to reverse them. Trade specialists both in the USA and Mexico have said that raising energy trade and investments through NAFTA would help reduce the $64 billion U.S. trade deficit with Mexico that disturbs U.S. President Donald Trump, partly through increased U.S. gas and oilfield equipment sales to Mexico. PENA NIETO STRIKES BACK AT TRUMP’S SWIPES Trump has repeatedly threatened to rip up NAFTA, warning he could do this again. Pena Nieto, in his yearly address to the nation on Saturday, defended free trade and young migrants in the USA, saying his government would not accept insults against “national dignity” from Trump’s administration. Where the round of NAFTA talks involving the United States, A NAFTA banner is pictured, Mexico and Canada is occurring in Mexico City, Mexico September 1, 2017. REUTERS/Carlos Jasso “The connection with the new government of the USA, like any other nation, must be based on irrevocable principles: sovereignty, protection of the national interest and protection of our migrants,” Pena Nieto said. “We will not accept anything that goes against our national dignity,” he told a crowd of politicians and the country’s elite, who climbed at the point to provide the most vigorous standing ovation of his address. Trump this week also insisted again that Mexico would eventually pay for his proposed wall on the southern U.S. border to block the flow of illegal immigrants and drugs. Slideshow (3 Pictures) Pena Nieto shied away from mentioning the wall but said Mexico would promote the recognition of migrants for their contributions and reject discrimination against them. Pena Nieto said Mexico would continue to defend NAFTA as a vehicle. “The negotiating team has precise instructions to participate in this process with seriousness, great faith and a constructive spirit,” he said, “always putting first the attention of Mexico while reaching for a result where all three nations win.” Trump has repeatedly threatened to pull out of NAFTA if talks on Saturday said he would talk next week whether to withdraw from a trade deal with South Korea that he has criticized and do not go his way. Leading Mexican officials said Latin America’s No. 2 economy would walk away from negotiations if Trump proceeds to withdraw from the offer. Negotiators were going to take until Monday to get to one of the thorniest issues, U.S. demands for increased North American and U.S. articles for autos and other manufactured products, according to a program seen by Reuters. Mexico’s Smith said no specific proposals were put on the table by U.S. negotiators regarding rules of origin. Reporting by David Lawder and Adriana Barrera; Writing by David Lawder and Michael O’Boyle; Editing by Lisa Von Ahn and Bill TrottOur Standards:The Thomson Reuters Trust Principles.