OTTAWA (Reuters) - Canadian Prime Minister Paul Martin decided not to sign on to the U.S. missile defense network, despite urging from Washington, because the political risks were too great, a senior official said Wednesday.

But Dan McTeague, parliamentary secretary to the foreign minister, dismissed suggestions that Washington might retaliate by dragging out two major bilateral trade disputes.

Officials say Martin is due to announce this week that Canada will not be part of a system designed to protect against attacks from "rogue states" such as North Korea. The idea is opposed by many legislators in Martin's Liberal Party.

Martin brushed off a flurry of questions in Parliament about the missile plan, saying he would make an announcement when it was in Canada's interest to do so. Domestic media said he would make clear his decision Thursday.

Staying out of the network is likely to be seen as a snub to President Bush, who publicly urged Martin three times during a visit to Ottawa last December to sign on...