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Trade Minister Chrystia Freeland rises during Question Period in the House of Commons on Oct. 17, 2016.

Justin Tang/The Canadian Press

Canada will fight U.S. softwood lumber tariffs in front of the World Trade Organization if a negotiated settlement can't be reached, Trade Minister Chrystia Freeland says.

A tariff standstill expired last week and opened the door for U.S. industry to begin proceedings to add charges to Canadian lumber. The last softwood pact expired in 2015 and Canadian exports have since increased.

Ms. Freeland, speaking Monday in the House of Commons, said the Canadian government is now taking a "two-track approach" – pursuing a negotiated deal while preparing for any WTO fight.

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"We understand the way to get a great deal is to be prepared for the possibility there is no deal at all," Ms. Freeland told lawmakers in Ottawa. "We want a good deal, not just any deal. And if we can't achieve a negotiated agreement, Canada's prepared to fight."

Ms. Freeland and her counterpart, U.S. Trade Representative Michael Froman, pledged last week to continue to work toward a "durable and equitable solution" despite failing to reach a deal before the tariff standstill expired. Ms. Freeland addressed a portion of her comments directly to U.S. officials, saying, "I want to assure them we are negotiating in good faith" while preparing for any WTO dispute.

Any U.S. industry complaint will be filed "at the most effective time," the U.S. Lumber Coalition said in a statement last week, adding industry has "no choice" but to press the U.S. government to act against Canadian softwood. U.S. industry proposals are currently "inadequate," Ms. Freeland said Monday. "The government of Canada is prepared for any situation."

The U.S. Lumber Coalition has said any new agreement should maintain Canadian exports at or below an agreed U.S. market share. Producers in British Columbia want to choose between an export tax model and a restriction on volumes, similar to the structure of the previous agreement.

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