OTTAWA -- Prime Minister Stephen Harper and U.S. President George Bush may have to strongly signal that they're serious about resolving the bitter softwood lumber war before Canada and the United States resume peace talks on the issue, says Trade Minister David Emerson.

Harper will be meeting George W. Bush next week and if all goes well, the two leaders are expected to announce a return to the negotiating table to try and resolve the long-running dispute.

But both sides will need to see some sign from the other that the work won't be in vain, Emerson said in an interview Friday from Mexico.

Previous talks to end the ugly dispute, which began roughly four years ago, have always broken down.

"There's a feeling on both sides of the border that if there isn't a pretty unambiguous signal from the highest level, then negotiations could end in yet another frustration,'' Emerson told The Canadian Press following meetings with U.S. Trade Representative Rob Portman.

"We're just going to have to wait and see how that meeting goes with the president and the prime minister,'' added Emerson.

"I think it will be a two-way street that both leaders are going to have to see if they want to walk down.''

Emerson has been meeting with his counterparts from Washington and Mexico to prepare for next week's summit in Cancun, involving the leaders of the three NAFTA countries.

Border security as well as trade will be on the agenda when Bush and Harper meet with President Vicente Fox.

It's expected the leaders may be able to kick-start talks to end the longrunning dispute which threatens $10 billion in annual lumber exports from Canada.

The softwood battle "has become an irritant that is really contaminating the relationship and it's time, if conditions are right,'' to talk about a solution, said Emerson, who also discussed expanding free trade with his counterparts.

Emerson, Portman and Mexico's Sergio Garcia de Alba agreed to "collaborate'' on expanding free trade to other countries during their meetings Friday.

Some Canadian lumber producers have argued Ottawa should think less about negotiating with the giant U.S. and instead focus on continuing to fight punitive duties imposed by the Americans before NAFTA tribunals and the World Trade Organization.

Canada has won numerous trade tribunal cases against claims by the U.S. lumber industry that Canadian governments subsidize the softwood industry through provincial forestry practices.

The U.S. lumber industry has also won some cases, especially before the WTO.

But the court battles are cold victories because they can run on indefinitely, said Emerson.

"The reality is, you win some; you lose some; but even when you win, there's nothing to stop another lumber action as soon as this one has been dispensed with.''

In a major win for Canada just last week, a NAFTA panel eliminated most of the duties levied against Canadian softwood.

But the war is far from over since the Americans can still appeal the decision and drag the issue out for up to a year.

When the U.S. tariffs were first confirmed in May 2002, Canadian producers were paying about 27 per cent in combined duties. Canadian legal challenges and revisions by the U.S. Department of Commerce have steadily reduced them.