Obama faces tensions over trade, war on first trip

Feb 20, 2009, 7:49 GMT

U.S. President Barack Obama (L) and Canadian Prime Minister Stephen Harper hold a joint press conference after their bilateral meeting on Parliament Hill in Ottawa, Ontario, Canada on 19 February 2009. The trip is Obama\'s first outside the U.S. since his inauguration last month. EPA/MATTHEW CAVANAUGH

Washington - If there was any tension in private between the leaders of the United States and Canada over an existing free-trade agreement or the Afghanistan conflict, they were deftly deflected before the press.

Meeting with Canadian Prime Minister Stephen Harper in Ottawa during his first foreign visit since taking office on January 20, US President Barack Obama said they held wide-ranging discussions on climate change, the global economic crisis, trade and Afghanistan.

While Canada has set a 2011 deadline for pulling its soldiers out of Afghanistan, Obama this week ordered the deployment of 17,000 additional US troops to step up the fight against the resurgent Taliban, in advance of the Afghan presidential elections in August.

Canada has about 2,700 soldiers in Afghanistan's most volatile province of Kandahar. With 108 dead and more than 300 wounded, it has suffered greater troop casualties per capita than any other NATO country in Afghanistan.

Obama clarified that he 'certainly did not press' Harper for 'any additional commitments beyond the ones that have already been made.'

All the president did was compliment Canada's troop presence, and he pointed out that the largest recipient of Canadian foreign aid is Afghanistan. The United States is 'extraordinarily grateful for the sacrifices of the families of Canada. ... You put at risk your most precious resource: your people.'

The Obama administration is conducting a review of US strategy for Afghanistan, where the last two years have seen a spike in violence and erosion of stability.

'In the last several years we took our eye off the ball,' Obama said Thursday. '... and there's a consensus of a deteriorating situation in Afghanistan.'

Dodging a question on the 2011 withdrawal, Harper said the main task of the Canadian forces was to train the Afghan Army.

'We are not, in the long term, going to establish peace and security in Afghanistan. That job must be done by the Afghans themselves,' Harper said.

Another potential flashpoint was the North American Free Trade Agreement (NAFTA), which created a free-trade zone between Canada, the US and Mexico in 1994. On the presidential campaign trail, Obama threatened to pull the US out of NAFTA unless Canada and Mexico agreed to strengthen provisions related to labour and environmental standards.

While softening his trade rhetoric since taking office, he alluded Thursday to possible changes in NAFTA, bringing up the idea of moving labour and environmental provisions into the main body of the agreement. But Obama also emphasized: 'Now is a time when we've got to be very careful about any signs of protectionism.'

'As obviously one of the largest economies in the world, it's important for us to make sure that we show leadership in the belief that trade ultimately is beneficial to all countries,' he said.

Like much of the world, both nations are battling a severe recession, and neither would want to spark a trade war. In Canada, the world's eighth-largest economy, the unemployment rate in January soared to a four-year high of 7.2 per cent. The jobless rate was at 7.6 per cent in the US, the highest since 1992.

'The people of North America are hurting, and that is why our governments are acting,' Obama said. 'We know that the financial crisis is global and so our response must be global.'

Harper said more cautiously, 'We know, as a small economy, we can't recover without recovery in the United States.'

Canada is the US' largest trading partner, with trade between the neighbours valued at 1.5 billion dollars a day - making it the world's largest commercial relationship.

While Obama vowed to combat protectionism, Canadian leaders had expressed concerns about the 'buy American' provision in the 787- billion-dollar US economic stimulus package signed into law this week.

The measure, which bars foreign manufactured goods from being used in government projects, was modified in the final bill to assure it doesn't violate existing trade agreements.

'I know some aspects of trade invariably cause political concerns,' Harper said. 'But nobody should think for a minute that trade between Canada and the United States is anything but a benefit.'

If there was a point of clear agreement, it was battling climate change, and they announced a US-Canada clean-energy dialogue to reduce greenhouse-gas emissions.

Obama, who has made 'green jobs' a key element of his plans to pull the US out of recession, said that new investments in clean energy made both economic and environmental sense for the country.

'How we produce and use energy is fundamental to our economic recovery, but also our security and our planet,' he said.

In veiled criticism of former president George W Bush, Harper said he was 'quite optimistic that we now have a partner on the North American continent that will provide leadership to the world on the climate-change issue.'

'The US is once again ready to lead,' Obama emphasized, 'but strong leadership depends on strong alliances, and strong alliances need constant renewal.'