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U.S. News

North American leaders defend free trade

NEW ORLEANS (Reuters) - North American leaders defended their 14-year-old free trade agreement at an annual summit on Monday amid criticism in the U.S. presidential campaign that the pact costs American jobs.

On the first of a two-day summit held in New Orleans to showcase the city’s rebirth, free trade was at the forefront for U.S. President George W. Bush, Canadian Prime Minister Stephen Harper and Mexican President Felipe Calderon.

The 14-year-old North American Free Trade Agreement has come under fire by presidential candidates amid concerns that the United States is in or is headed to a recession.

“I assured the prime minister that I’m a strong advocate for free trade. I believe it’s in our nation’s interest that we continue to have a free trade agreement,” Bush said after a meeting with Harper.

After his initial talks with Bush, Calderon acknowledged the fierce debate over trade in the U.S. election. But he said NAFTA was not all bad, noting that opponents to the deal do not realize how many jobs have been created and how much immigration from Mexico has dropped as a result of the treaty.

“I stress this issue because recently NAFTA has come under criticism and I do not believe that people are realizing how many benefits NAFTA has brought both to the United States and Mexico,” Calderon said through a translator.

Trade issues have been in the spotlight in the U.S. race for the White House as Democrats Barack Obama and Hillary Clinton have appealed for labor backing by promising to renegotiate or even abandon the unpopular NAFTA, citing the loss of roughly 3 million U.S. manufacturing jobs since 2000.

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Obama and Clinton are vying for the Democratic nomination with the winner facing Republican John McCain in the November presidential election to replace Bush. Their opposition to NAFTA has caused concern in Canada and Mexico.

Aside from reaffirming their commitment to free trade, analysts expect few concrete results from the “Three Amigos” summit -- in part because Bush is leaving office in January.

“The political environment’s not terribly conducive to any big progress,” said Leonardo Martinez-Diaz, a Mexico expert at the Brookings Institution. “The Mexican president already knows that Bush can’t deliver, given his lame-duck status.”

NEARLY $1 TRILLION IN THREE-WAY TRADE

Canada is the United States’ largest trading partner and Mexico ranks third. Trade between the three countries last year totaled $930 billion and is expected to reach $1 trillion by the end of this year.

Canada and Mexico are the largest sources of imported energy to the United States, and Canada is the largest supplier of foreign oil.

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Harper said he and Bush had discussed border and trade issues in their initial discussion.

“We made considerable progress on some things,” he said, without elaborating.

Canadian business -- important parts of which rely heavily on “just in time” deliveries across the border -- is unhappy about increasing delays at the frontier caused by what they say is strict U.S. security.

Talks will continue through a dinner on Monday night and during a joint session on Tuesday. The leaders are expected to discuss regulatory cooperation, harmonizing energy efficiency standards and coordinating efforts to prevent unsafe food and products from entering North America.

Bush said the summit was held in New Orleans to showcase the “comeback of a great American city”.

Bush’s administration was lambasted for its poor response to the August 2005 Hurricane Katrina -- the worst natural disaster in U.S. history. Critics have said recovery has been slow in the city once known mainly for its jazz and lively night life but now marked by memories of deadly flooding.

“I wanted to send a clear signal to the people of my country that New Orleans is open for business, it’s a good place to visit and that after the devastation of Katrina, it’s become a hopeful city,” Bush said.

Additional reporting by David Ljunggren; Editing by Cynthia Osterman

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