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Ontario Premier Kathleen Wynne speaks during a town hall meeting in Ottawa, on Jan. 18, 2018.Justin Tang/The Canadian Press

Ontario is preparing for a trade war on New York State, with plans to restrict its companies from bidding on government contracts in retaliation for a new "Buy American" law.

Premier Kathleen Wynne announced on Tuesday evening that she will table legislation on Feb. 20 giving her government the power to punish any state that implements protectionist policies.

"It is a retaliatory measure, but we really believe that that's what we need to do to respond to the protectionism that Buy America really invokes," Ms. Wynne said in an interview at the Canadian embassy in Washington. "We have to respond if we're going to be pushed."

The Premier said the legislation is also a warning to other jurisdictions that they will "pay a price" if they follow New York's lead. Texas, for instance, has a Buy American bill that has not yet been signed into law.

The New York law, signed by Governor Andrew Cuomo in December and set to take effect on April 1, mandates that only U.S. iron and steel be used on roads, bridges and rail lines for all contracts more than US$1-million. Ontario has not yet worked out exactly what its sanctions on New York companies will look like, but Ms. Wynne said they will be "proportionate" to the harm New York State is inflicting on her province and will involve public procurement.

Mr. Cuomo's office did not respond to a request for comment late on Tuesday.

The move comes amid the renegotiation of the North American free-trade agreement, in which Canada and Mexico are fighting a series of protectionist demands from the Trump administration.

Ms. Wynne's Washington trip is part of a full-court press by Canadian politicians and business leaders to lobby the United States to preserve NAFTA. She met with the U.S.'s chief NAFTA negotiator, John Melle; Mark Calabria, an adviser to Vice-President Mike Pence; Ted McKinney, the undersecretary for trade at the Department of Agriculture and several members of Congress.

Ms. Wynne said U.S. officials told her there had been "a little bit of movement" in the deadlocked NAFTA talks in the most recent round of discussions in Montreal. Canada tried to bridge the gap on one of the key sticking points – North American content rules in vehicles – only to see their proposal shot down by Mr. Trump's Trade Representative, Robert Lighthizer.

The Premier said the Americans told her they were looking for more detail on how Canada's proposal would work.

"They're looking for more specifics and my understanding is that's now the negotiation that will happen between Montreal and the next round … what would that mean in terms of the numbers," she said. "I'm not under any illusion that we're going to sail into an agreement over the next couple of months. But I do think that we are in a better position than we were in November."

Agriculture Secretary Sonny Perdue, a pro-NAFTA member of the Trump administration, struck a note of optimism on Tuesday, saying a deal was possible by the end of the year once Mexico's July presidential election is done.

With a report from The Canadian Press

U.S. trade representative Robert Lighthizer says progress was made at Montreal’s NAFTA talks, but adds he hopes they will 'accelerate.'

The Canadian Press

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