Canada says it's optimistic about NAFTA talks, but it's also diversifying trade ties

  • Canada is "cautiously optimistic" about NAFTA talks on the back of positive signs from the U.S., Canadian Minister of International Trade Francois-Philippe Champagne said.
  • Canada has been involved in several other trade agreements, include the revamped Trans-Pacific Partnership.
  • NAFTA talks have been going on for months, with an eighth round is expected in April.

Canada is feeling positive about how NAFTA talks are playing out, but it will continue to develop its trade ties elsewhere, the country's minister of international trade said on Friday.

Canada was "cautiously optimistic" about NAFTA negotiations on the back of positive signals from the White House and was keen on continuing to modernize the 24-year-old agreement, Francois-Philippe Champagne, Canada's minister of international trade, told CNBC's "Squawk Box."

NAFTA negotiations have been going on for months, with an eighth round of talks expected in April. One sticking point has been Washington's demand that auto exports to the U.S. contain a minimum of 50 percent U.S. content, although that requirement could have been dropped, according to recent reports.

Earlier this week, Canadian Prime Minister Justin Trudeau indicated he was upbeat about working out a satisfactory deal, Reuters reported.

Champagne also highlighted the significance of the U.S.-Canada relationship, adding that "there are no two nations that are trading more."

"Where we are in this discussion, it's not a relation of buyers and sellers. We make things together and because of that, we have created prosperity on both sides of the border and we want to continue that," he said.

NAFTA Plan B?

Although Champagne did not directly address what Canada's plans would be should NAFTA talks break down, he said that the U.S. would "always remain" Canada's largest trading partner, due to the former's geographical location and size of its economy.

In the meantime, Canada has been involved in various trade agreements as the global economic power balance shifts.

"There's never been a better time to diversify ... I think Canadians understand that the center of gravity of the world economy is shifting toward Asia Pacific," Champagne said. As Canada is "very much a Pacific nation," it had to position itself for the next few decades, he added.

Canada has participated in various trade agreements of late, including last year's Comprehensive Economic and Trade Agreement with Europe and this year's revamped Trans-Pacific Partnership deal.

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