U.S. Treasury's Mnuchin to bring up defense on Ottawa trip: U.S. official

WASHINGTON (Reuters) - U.S. Treasury Secretary Steven Mnuchin will raise the issue of defense spending during his trip to Ottawa on Friday, a senior U.S. Treasury official said.

FILE PHOTO: U.S. Treasury Secretary Steven Mnuchin discusses the Trump administration's budget plan during the Peterson Foundation's 2017 Fiscal Summit in Washington, U.S.,on May 23, 2017. REUTERS/Jim Bourg/File Photo

Earlier this week, Canada unveiled plans to bulk up its military amid doubts that it could continue to rely on the United States as the world’s foremost global leader. [nL1N1J418R]

“I expect we’d cover issues related to defense spending and we saw of course Canada’s recent announcements just in the last couple of days about that,” the senior Treasury official said in a conference call with reporters on Thursday.

President Donald Trump has scolded NATO allies, which includes Canada, for not spending enough on defense and has so far declined to personally affirm the alliance’s mutual defense doctrine.

While in Ottawa, Mnuchin is scheduled to hold a bilateral meeting with Canadian Finance Minister Bill Morneau. Deputy National Security Adviser Dina Powell will accompany Mnuchin on the trip, Treasury said.

The official, who spoke on condition of anonymity, also said that Mnuchin would raise trade issues with his Canadian counterpart.

Tensions between the traditionally close allies have been rising over the Trump administration’s accusations of unfair trade practices by its northern neighbor.

The United States and Canada will soon begin talks on renegotiating the North American Free Trade Agreement(NAFTA). Mexico is also a member of the pact.

During Friday’s talks, the United States wants to get a sense of Canada’s thoughts on timing and issues on trade before starting negotiations, the senior Treasury official said.

Canada is already at odds with the United States over dairy subsidies, as well as exports of lumber and airliners.

Mnuchin is expected to raise tax reform, financial regulation and countering terrorist financing as part of the discussions, the senior Treasury official added.

Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama