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Canada talks tough on trade as endgame on NAFTA talks nears

Reuters  |  LONDON, Ontario 

By David Ljunggren

LONDON, Ontario (Reuters) - is talking tough with the United States, stressing its determination to push back against what it says are unfair practices ahead of crucial talks to revamp the tri-nation North American Free Agreement.

U. S., Canadian and Mexican officials meet this month for the sixth and penultimate round of talks to update NAFTA, which has threatened to abandon unless major changes are made.

The talks start on Jan. 23, just weeks after launched a wide-ranging complaint against the at the World Organization, potentially complicating negotiations. The complaint challenges Washington's use of anti-dumping and anti-subsidy duties.

"Our American colleagues ... understand when you stand strong," Minister told reporters. "You get respect when people see you are firm."

has so far largely shunned confrontation with Washington, stressing instead the merits of and free as Canadian makes efforts to forge closer ties with Trump.

But Trump's more isolationist approach has put strains on the bilateral trading relationship between the two countries, the second largest of its kind in the world.

is riled about duties on lumber and planemaker , which is based in the politically important province of Quebec, where Trudeau's Liberals are looking to build up support.

"Strategically, standing up to the Americans plays well at home," said lawyer

"The Canadians are getting tougher ... they've been more aggressive in their response, in their threats, than perhaps people have realized," he said in a phone interview.

Canadian cabinet ministers have been fanning out across the for 18 months, spreading an upbeat message about the benefits of

But when went to last week, he gave a speech in which he warned the Americans against "tanking the whole relationship".

sources told on Wednesday they were increasingly convinced the plans to announce it intends to pull out of NAFTA, sending markets lower.

On Thursday though, Trump told he would be "a little bit flexible" on his threat to withdraw from because is facing a this year.

STUCK IN NEUTRAL

Canadian companies and industries that would be most acutely impacted by the pact's demise are largely stuck in neutral given the uncertainty of what might replace it, analysts and executives have said.

and are unhappy about U. S. demands to establish rules of origin for goods that would set minimum levels of U.

S. content for autos, a sunset clause that would terminate the deal if it is not renegotiated every five years and ending the so-called Chapter 19 dispute mechanism.

Canadian said on Thursday the U. S. threat to quit has to be taken seriously. Still, she said it was "absolutely possible to have a positive outcome" in if all three sides showed good will.

"When it comes to the more unconventional U. S. proposals, we have been doing some creative thinking," she said.

"We have some new ideas," she added. One person familiar with government thinking said some of the ideas related to auto content.

Laura Dawson, of the Washington-based Woodrow Wilson's Institute, said there were sharp limits to Ottawa's influence.

"There's nothing that could do, short of setting fire to the again, that would change the trajectory of whatever it is that is going to do," she said in reference to an 1812 war.

(Reporting by David Ljunggren; Editing by Chizu Nomiyama, and Susan Thomas)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, January 12 2018. 04:16 IST
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