Canada's Prime Minister Paul Martin has attacked US trade policy, following an ongoing row over import tariffs on Canadian softwood lumber.
Mr Martin wants the US to back down over Canadian lumber
His comments came as US Secretary of State Condoleezza Rice made her first official visit to Canada.
Mr Martin accused the US of breaking a free trade ruling. Ms Rice said it was still possible to settle the issue.
The relationship between Canada and the US has been chilly since Ottawa decided not to back the invasion of Iraq.
Canada has also refused to support the US's missile defence plan.
It was for this reason that Ms Rice was said to have cancelled an earlier planned visit for April.
The dispute over softwood lumber centres on a ruling by the North American Free Trade Agreement (NAFTA).
Canada says the judgement means the US should return billions of dollars in duties on the wood, but the US claims the ruling was much more limited.
"Friends live up to their agreements," said Mr Martin.
Ms Rice said the dispute should be kept "in perspective".
"I don't think the time for negotiation has passed," she said.
"We are very large trading partners and there will be disputes."
When Mr Martin took over as Canadian Prime Minister in December 2003, he promised to work to improve relations with the US, while at the same time continuing to defend Canada's interests.
The two nations have also had heated arguments over fishing rights in their Pacific coast waters.
Domestic critics of Mr Martin claim he is now "acting tough" over the lumber issue because of a general election due in the spring.