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Obama taking pro-trade message to Canada

Barack Obama heads to Canada with a decidedly pro-trade message, hoping to reassure a valuable partner that the US is not pulling back even as it enforces new "Buy American" language and considers renegotiating the 1994 North American Free Trade Agreement.

world Updated: Feb 18, 2009 11:08 IST

President Barack Obama heads to Canada on Thursday with a decidedly pro-trade message, hoping to reassure a valuable partner that the US is not pulling back even as it enforces new "Buy American" language and considers renegotiating the 1994 North American Free Trade Agreement.

In his first foreign trip as president, Obama will meet with Canadian Prime Minister Stephen Harper in Ottawa, the Canadian capital. The relationship between their countries is vital: No country takes part in as much daily trade with the US or exports as much oil to the US as Canada does.

Yet the new American president has stirred up some nervousness north of the border by pledging to renegotiate NAFTA, which links the US, Canada and Mexico, to get better labor and environmental standards. When he was battling for the Democratic presidential nomination a year ago, Obama said "we should use the hammer of a potential opt-out as leverage to ensure that we actually get labor and environmental standards that are enforced."

Now, though, Obama and his aides are choosing softer language. "I think there are a lot of sensitivities right now because of the huge decline in world trade," Obama said on Tuesday when asked whether now was the time to renegotiate NAFTA. He maintained that labor and environmental standards, currently part of side deals, could be better enforced if woven into the main agreement. "But what I've also said is that Canada is one of our most important trading partners," Obama said in an interview with the Canadian Broadcasting Corp. "We rely on them heavily. There's $1.5 billion worth of trade going back and forth every day between the two countries. ... It is not in anybody's interest to see that trade diminish."

Reopening NAFTA to deal with standards could spiral into a broader debate about the deal itself, a potential mess for the White House as protectionist tendencies run high in weak economic times. Free-trade opponents say expanded international trade threatens US jobs and keeps wages from growing.

Denis McDonough, Obama's senior foreign policy adviser, said Tuesday that the president still will use the visit with Harper to underscore his views on labor and environmental standards, and that he will do the same in conversations with Mexican President Felipe Calderon.

Meanwhile, Canadian worries have subsided somewhat over the "Buy American" clause wrapped into the giant economic stimulus bill Obama signed on Tuesday.

It requires that US iron, steel and other manufactured goods be used for public buildings and other public projects paid for under the bill. But the final language makes clear that the policy must not violate US obligations under existing international trade agreements, including NAFTA.

Obama's quick trip to Canada is to be dominated by the economy, trade, energy, the environment and the war in Afghanistan. Setting a tone, Obama told a Canadian news organization on Tuesday that the United States will seek a more comprehensive, diplomatic approach to Afghanistan, where the US has been engaged in war since 2001.

"I am absolutely convinced that you cannot solve the problem of Afghanistan, the Taliban, the spread of extremism in that region solely through military means," the president said in a White House interview with Toronto-based Canadian Broadcasting Corp. "We're going to have to use diplomacy," Obama said. "We're going to have to use development. And my hope is that in conversations I have with Prime Minister Harper, that he and I end up seeing the importance of a comprehensive strategy, and one that ultimately the people of Canada can support, as well as that the American people can support."

The president made those comments hours before adding some 17,000 US troops for the flagging war in Afghanistan, his first significant move to change the course of a conflict that his closest military advisers have warned the United States is not winning. Although the Afghanistan conflict is overshadowed in the US by the war in Iraq, the Afghan war is a deeply sensitive matter in Canada.

Canada is planning to pull its forces out of the country's volatile south by 2011, with diminishing support among its people to keep troops there.