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After reports Wednesday that Canada now considered it inevitable that Trump would try to withdraw the U.S. from the treaty, one Canadian official with knowledge of the NAFTA negotiation offered a more nuanced position in an email to the Post, saying, “it’s not accurate to say we’re convinced,” but that there was “no question we think there’s a chance it could happen.”

The confusion over Canadian expectations comes ahead of the next round of negotiations, scheduled to be held in Montreal Jan. 23-28.

Trump withdrawing from NAFTA “was always a risk, but that risk is clearly more elevated now,” said Brian DePratto, senior economist at Toronto-Dominion Bank.

Import duties

An official with the Foreign Affairs Ministry said Ottawa’s most recent complaint aims to add weight to Canada’s argument that import duties have been levied unfairly.

But it also goes well beyond Canada-U.S. softwood lumber spats, citing alleged international trade breaches by the U.S. against a host of imported products, from Argentine lemon juice to frozen shrimp from India.

The complaint is “certainly not typical,” said Greg Kanargelidis, an international trade lawyer at Blake, Cassels & Graydon LLP.

Under WTO dispute resolution rules, other countries named in the complaint can decide to take part in consultations after an initial reading.

“In a normal situation you wouldn’t expect this to impact the long-term trading relationship that we’ve got under NAFTA,” he said. “But with the Trump administration being relatively new, and because of the protectionist noises we’ve been hearing from them, it’s not at all clear what sort of reaction the U.S. might have.”

Publication of the complaint came just hours after the U.S. Commerce Department placed preliminary duties on Canadian exports of uncoated groundwood paper, which is used to manufacture newspapers, soft-cover books and phone directories.

Steep import duties leveled by the U.S. have become a regular fixture of the industry, according to Joel Neuheimer, a vice-president at the Forest Products Association of Canada.

“This has been a chronic problem for us,” he said. “It’s the same horror show over and over.”

With files from Marie-Danielle Smith, The Canadian Press and Bloomberg News

