Mulroney said Justin Trudeau phoned him last weekend to discuss the NAFTA situation and the two spoke for an hour.
"I think we understand there are certain issues on which we will need to compromise", one of the sources said when asked about increased dairy access for the USA industry.
He and other American politicians have long demanded Canada's system of domestic dairy protections either be abolished or heavily modified to give USA exports a bigger share.
"I think it's something that we obviously have to be aware (of), that the president is contemplating", said Trudeau.
"It seems even if we give a lot, the USA keeps asking for more", said Mr. Kronby, an global trade lawyer with Borden Ladner Gervais.
Negotiations have stretched on for 13 months so far and are stalled on a number of issues including dispute resolution, cultural protection, and how much access American farmers should have to the Canadian dairy market.More news: Stewart, Storm sweep Mystics for WNBA title
Trump has already struck a deal with Mexico, NAFTA's third member, and has said he is prepared to leave Canada out of the revised deal if Ottawa fails to accept terms more favorable to the United States.
Yet, he stressed that "if we sign the deal it'll be. for Canada and Canadians".
FILE PHOTO: U.S. Trade Representative Robert Lighthizer takes part in a joint news conference on the closing of the seventh round of NAFTA talks in Mexico City, Mexico March 5, 2018.
"Not negotiating in public has helped us to have the kind of frank and candid conversations we need to have around the table, and crucially, it has helped to build that trust and goodwill and good faith on both sides".
The two countries will meet in Washington on Tuesday to decide how they'll include the U.S.'s agreement with Mexico into the deal. The governing Liberal Party is holding its caucus retreat in Saskatoon on Wednesday and Thursday and it's not known whether Ms. Freeland will pause negotiations after Tuesday to head to the caucus meeting.
If this time frame holds true, Canada and the US have roughly until the end of November to reach a deal over these contentious negotiations. "President, I recommend we accept this deal with Canada; it's not ideal, but it's a good deal, ' then I think he takes it,"' Mulroney said.More news: Barrow sends special delegation to Kofi Annan's funeral
"Forget what you read about NAFTA negotiations and Twitter wars".
As the two sides met, new economic data showed that the US trade deficit with Canada grew to $3.1 billion in July.
"We're just going to stay working constructively to get to that win, win, win that we know is there".
The Teamsters Canada believes that the best compromise is to conclude a new free trade agreement with the United States would be dropping the chapter 19 of the NAFTA.
The hope is for a trilateral agreement in principle that Congress can approve before Mexico's new president takes office on December 1.More news: Don't Be Fooled by Hurricane Florence Being 'Downgraded.' It's Still Very Dangerous
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