Canada Draws Line in Trade Dispute with Trump

Liberal cabinet ministers have delivered a collective message that Canada will "stay strong" to defend the country's interests in the face of escalating trade tensions with the United States.

The economic consequences from trade disputes is top of mind for ministers holding a two-day winter retreat in London, Ont., after Canadian stocks and the dollar fell Wednesday on reports the U.S. is increasingly likely to withdraw from the North American Free Trade Agreement.

Foreign Affairs Minister Chrystia Freeland said today it's "no secret" the U.S. could signal its intent to withdraw from the agreement, since U.S. President Donald Trump has made that publicly known even before talks began.

She said the government is treating the U.S. threat seriously.

Freeland said Canada will enter the sixth round of NAFTA talks, to be held in Montreal Jan. 23 to 28, with a spirit of good will, and says it's "absolutely possible" to have a positive outcome. Many of the bread-and-butter, business chapters are reaching a closing stage, and officials are developing new, creative ideas to respond to "unconventional" U.S. proposals, she said.

Withdrawal from NAFTA could take place six months after a country provides written notice of its intent.

But in an interview with the Wall Street Journal published Thursday, Trump said he would be "a little bit flexible" on the time frame for when a NAFTA deal had to be struck because of the impending Mexican presidential election.

Freeland insisted NAFTA talks are on a separate track from the ongoing dispute with the U.S. over softwood lumber.

This week, Canada launched a 32-page complaint to the World Trade Organization (WTO) against the U.S., challenging American anti-dumping and anti-subsidy duties.

International Trade Minister Francois-Philippe Champagne said Canada will remain solution-oriented and constructive in its trade talks, but said the WTO complaint sends a clear message of "firmness" in Canada's approach.