February 19, 2009 / 6:26 AM / 9 years ago

Obama to address protectionist fears on Canada trip

By Ross Colvin and Jeff Mason

WASHINGTON, Feb 19 (Reuters) - Barack Obama will seek to quell Canadian concerns about U.S. protectionism when he makes his first foreign trip as president on Thursday to the United States' biggest trading partner and energy supplier.

Obama and Canadian Prime Minister Stephen Harper will discuss trade, clean energy technology, the global economic crisis and the war in Afghanistan, officials said, but the president's tight schedule on the one-day trip to Ottawa leaves little time for substantive talks.

Trade will dominate the discussions, and Harper has said he will seek assurances that the "Buy American" clause in the $787 billion U.S. economic recovery package signed by Obama this week will not discriminate against firms in Canada, which sends about 75 percent of its exports to the United States.

U.S. officials, in turn, have said Obama will seek to allay those fears. The president said in an interview with the Canadian Broadcasting Corporation this week that Canadians should not be concerned, noting that history showed that "beggar thy neighbor" protectionist policies could backfire.

The "Buy American" provision imposes a requirement that any public works project funded by the stimulus package use only iron, steel and other goods made in the United States. While Obama has stressed that the United States will comply with its international free trade obligations, Harper said last week he was still concerned about the language in the clause.

Canada is also alarmed by Obama's stated desire to renegotiate the North American Free Trade Agreement, to which Canada, the United States and Mexico are signatories, fearing that it could lead to new tariff barriers. Obama has said he wants to strengthen environmental and labor provisions.

U.S. administration officials this week sought to downplay the issue, saying that while Obama would raise it in his talks with Harper, the fragile state of the world economy meant he would not be pushing hard for NAFTA to be re-examined now.

Obama foreign policy adviser Denis McDonough said the president would underscore his commitment to boosting trade between the neighbors, which amounts to $1.5 billion a day, the largest trading partnership in the world.

David Biette, director of the Canada Institute at the Woodrow Wilson International Center for Scholars, said now was not the time for Obama to meddle with NAFTA as it would invite Canada and Mexico to seek changes to the treaty, too.

"Why open it up now? It doesn't make economic sense. Why invite trouble?" he said.

CLEAN ENERGY

Obama, who wants the United States to take the lead in the fight against climate change, will also discuss clean energy technology with Harper, U.S. officials said, while stressing the importance of Canada as a key U.S. energy supplier.

Environmentalists want Obama to press Canada to clean up its "dirty" tar sands in the western province of Alberta, from which oil is extracted in a process that spews out vast amounts of greenhouse gases.

In his CBC interview, Obama said he wanted to work with Canada on new technologies to capture greenhouse gases, a statement analysts interpreted as recognition that the United States cannot afford to adopt a tougher stance right now against its main energy supplier.

Obama said he would also discuss Canada's role in Afghanistan, where it has 2,700 soldiers as part of a NATO-led force tackling a worsening insurgency. Obama ordered 17,000 more troops there this week to try to arrest the violence.

But with Canada due to withdraw its troops in 2011, and Obama saying he was not going to Ottawa with an "ask in my pocket" for them to stay beyond that date, the talks are expected to focus on other ways the Canadians can help.

U.S. officials have billed Thursday's visit, which comes a month after Obama took office, as an opportunity for Obama to deepen a personal relationship with Harper, a conservative who had a natural affinity with former President George W. Bush. (Editing by Eric Beech)




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