Manalapan Florida USA - Amid doubts over the future of the North American free-trade agreement (NAFTA), Canadian Pacific Railway Ltd. (CP) CEO Keith Creel says he finds the pace of talks "frustrating" but he isn't losing sleep.
 
That's because the diverse revenue streams of Canada's second-largest railway are not entirely dependent on NAFTA and the bilateral 1987 Canada-United States trade deal would come into force if NAFTA were to be cancelled.
 
"We're paying attention to it, but right now, I'm not losing sleep over it," Mr. Creel said on Wednesday at an investors' conference in Florida.
 
The three-way trade agreement between Canada, the United States, and Mexico is being renegotiated after U.S. President Donald Trump called the pact a bad deal for his country.
 
Canada and Mexico have resisted U.S. demands that would require North American vehicles contain 50 percent U.S. content and undercut the agreement's dispute resolution mechanisms.
 
The Alabama-born Mr. Creel said trade between Canada and the United States is "critically important" and he has been meeting with officials and business leaders on both sides as the talks drag on.
 
"What's being proposed at this point, if I put my Canadian hat on, is not acceptable to Canada. If I put my American hat on, I know what their demands are," Mr. Creel said.
 
"Is there a deal to be made? I don't know where the pin's going to fall. So far, they haven't made a lot of progress."
 
In 2016, Calgary-based CP made 22 percent of its revenue from shipping into the United States.
 
Another 8 percent came from U.S. shipments into Canada, according to company reports.
 
Mr. Creel said the freight hauler's autos business, at 3 percent of sales, is most exposed to cross-border trade.
 
Jason Seidl, a transportation stock analyst with U.S. investment bank Cowen and Co., said the end of NAFTA would have a "net negative impact" on U.S. and Canadian freight carriers, although not all railways would be affected equally.
 
New tariffs and slower border-crossing procedures would reduce freight volumes and reduce network traffic, he said in a research note.
 
"Freight is, first and foremost, a function of the economy and trade activity," Mr. Seidl said.
 
Mr. Seidl said the railway most at risk if NAFTA fails is Kansas City Southern, which relies on Mexican manufacturing, autos and appliances, and agricultural trade for about 45 percent of its traffic and half its revenue.
 
Union Pacific Railroad could be affected given its reliance on imports and exports.
 
CP and Montreal-based Canadian National Railway could also be exposed because both have significant U.S. networks and interchange Mexican freight with both Kansas City and Union Pacific, Mr. Seidl said.
 
Apart from the NAFTA talks, the battle continues over Canadian softwood exports to the United States.
 
Ottawa is challenging anti-dumping and countervailing duties the United States has imposed on Canadian imports.
 
Ghislain Houle, chief financial officer of CN, said lumber shipments account for about 8 percent of the company's sales.
 
So far, the 25 percent penalty CN's customers face has not had a big impact on shipments.
 
But threats of quotas could divert Canadian lumber exports to Asian markets through West Coast ports, a shorter and less lucrative haul for CN, Mr. Houle said on Wednesday.
 
Eric Atkins.