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FACTBOX-Trade dominates Canada-U.S. issues for Obama visit

OTTAWA, Feb 17 (Reuters) - Following are the main issues between Canada and the United States ahead of the one-day visit by U.S. President Barack Obama to Ottawa on Thursday:

TRADE

This is the most contentious bilateral issue by far.

Canada, which sends about 75 percent of its exports to the United States, is deeply concerned by the “Buy America” clause in a $787 billion stimulus bill passed by Congress last week. Although the U.S. administration insists the package will respect America’s international obligations, Ottawa is worried Canadian firms will be hurt by protectionism.

“Our intent and our resolve is to see that there is no increase of that ‘Buy America’ act ... that’s the territory that we’ll be marking out and I’m sure the prime minister will be sharing some of those things with the president,” Canadian Trade Minister Stockwell Day told CTV television on Sunday.

Canada, he said, would be “reminding our trading partners in the U.S. that we have agreements and we live up to our agreements and we expect all our partners to do the same.”

Another issue of potential concern is Obama’s stated desire during his election campaign to renegotiate the North American Free Trade Agreement to make it fairer for U.S. workers.

This could cripple trade ties that are already being hit by the economic crisis. Canadian Prime Minister Stephen Harper last year took an unusually assertive public stance, warning that if NAFTA were reopened, Canada would use its position as the main U.S. energy supplier as a lever in any negotiations.

AFGHANISTAN

Canada has around 2,700 soldiers in the southern city of Kandahar on a mission due to end in 2011. Canada has lost 108 soldiers since first sending troops to Afghanistan in late 2002 and complains that only a handful of other NATO nations are pulling their weight in the violent south -- the heartland of the Taliban. Although the minority Conservative government insists the mission will end in 2011, defense analysts believe up to 1,000 Canadian soldiers could stay on in a non-combat role. Given Canada’s stated determination to end the mission on schedule, it is uncertain whether Obama would openly press Ottawa to keep the troops on for longer.

Lieutenant-General Andrew Leslie, the Canadian army’s top commander, told Reuters in an interview on Monday he was unaware of any plans to extend the mission in any way.

“I’ve heard none of those (stories) on any official or unofficial channel ... no one has hinted or intimated me in a position of authority and my responsibility in my chain of command, that there is any nuance or option about something post-2011,” he said.

ENERGY/ENVIRONMENT

Canada is fond of reminding Americans that it is the single largest exporter of oil and natural gas to the United States at a time when other important suppliers are gripped by political uncertainty.

The challenge for Ottawa is that much of the oil comes from the Alberta tar sands and can be extracted only through an energy-intensive process that emits vast amounts of greenhouse gases. In the run-up to the presidential election, some Obama advisors were quoted as considering curbs on so-called dirty oil.

Canada said just before the U.S. election it wanted to set up a North American cap and trade system to regulate carbon emissions -- an approach it had until that point shunned. Critics suggested this new stance on regulation reflected a desire to strike a deal ensuring the United States could not take any action against the tar sands.

The current Conservative government took power in early 2006 and then followed the lead of former U.S. President George W. Bush by walking away from the Kyoto protocol on climate change on the grounds it would unfairly hurt Canadian industry.

Obama says it is time for the United States to lead the fight against climate change and wants U.S. emissions in 2050 to have dropped by 80 percent from 1990 levels. Ottawa’s goal is to cut 2007 emissions by up to 65 percent by 2050.

GUANTANAMO BAY INMATE OMAR KHADR

Canadian-born Omar Khadr, charged with killing a U.S. soldier in a firefight in Afghanistan in 2002 when he was aged 15, is the only Western inmate in the Guantanamo Bay prison.

Critics say Khadr, now 22, was a child soldier and want Ottawa to press Washington for his release. The Canadian government shrugs off calls to act, saying Khadr faces serious charges, and seems confident that Obama will not raise the matter.

That said, there are bound to be developments in the near future, since Obama has ordered the prison be shut by early 2010. Khadr’s trial was halted last month to give Obama time to decide whether to scrap the war crimes tribunals at Guantanamo that critics say are a travesty of justice. (Reporting by David Ljunggren; Editing by John O’Callaghan)

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