OTTAWA (AFP) - A bitter trade dispute between Canada and the United States over softwood lumber is unlikely to be resolved when its leaders meet in Mexico this week, a Canadian official said, downplaying hopes for a deal.

Canadian Prime Minister Stephen Harper and US     President George W. Bush will "take stock" of the trade row when they meet on the sidelines of a NAFTA summit in Cancun, but no decision to start a new round of formal lumber talks is expected in the Mexican resort town, the senior official said.

Last week, Canada's trade minister said both countries were on the cusp of returning to the bargaining table, but added a final decision was up to their leaders.

"Each of the leaders will receive the report of their trade ministers' conversations ... To my knowledge, as of now, what we have is an opportunity flowing from that conversation to take stock," said the Canadian official, who asked not to be named.

"I don't expect (a deal in Cancun)."

Canada broke off talks last year to protest a US decision to continue to collect duties on Canadian softwood imports despite a NAFTA ruling that Canadian imports of softwood lumber had not harmed the US lumber industry.

Canada is seeking a refund of 4.5 billion US dollars in duties on Canadian softwood imports since May 2002, but the United States has balked at the demands.

Instead, US officials have repeatedly pressed for a negotiated settlement.

A North American Free Trade Agreement panel ruled earlier this month that Canada does not substantially subsidize its lumber industry and that the United States was wrong to have imposed punitive duties.