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American Shipper

Obama takes gentle approach on NAFTA reform

Obama takes gentle approach on NAFTA reform

   Barack Obama made his first foreign trip as president across the border to Canada and reassured leaders that the United States is not interested in moving toward protectionist policies that might trigger a series of anti-trade measures in countries also combating recession.

   'Now is a time where we've got to be very careful about any signals of protectionism ' It's important for us to make sure that we are showing leadership in the belief that trade ultimately is beneficial to all countries,' he said at a press briefing with Canadian Prime Minister Stephen Harper.

   The United States and Canada boast the world's largest trading partnership, but often have differing views on how to manage the flow of goods and services. More than $1 billion worth of goods cross the border between the countries each day for a total value in excess of $500 billion per year.

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   Obama said he was still interested in trying to solidify enforcement mechanisms within the North American Free Trade Agreement by incorporating labor and environmental side agreements into the main body of the treaty.

   'My hope is that as our advisors and staffs and economic teams work this through, that there's a way of doing this that is not disruptive to the extraordinarily important trade relationships that exist between the United States and Canada,' he said.

   His comments were much more benign than ones he made during the presidential campaign last year calling for renegotiating NAFTA to create a level playing field for American workers.

   Harper said Canada is willing to tweak the agreement where needed as long as the process doesn't subject the whole deal to reconsideration.

Obama

   Obama addressed Canadian concerns about the 'Buy American' provisions in the economic stimulus he signed into law this week, saying that they were consistent with U.S. obligations under NAFTA and the World Trade Organization and would not affect trade with Canada. Those international treaties allow limited domestic preferences and purchasing policies.

   'I provided Prime Minister Harper an assurance that I want to grow trade and not contract it. And I don't think that there was anything in the recovery package that is adverse to that goal,' he said.

   Canada expects the United States not to exceed the domestic preference caps under NAFTA and the WTO, because the G20 countries have all agreed to pursue economic stimulus measures in ways that help their own economies and those of their trading partners, Harper said. Any deviation from that principle would only worsen the global recession, he added.

   Harper noted that in Canada's own, smaller stimulus package the government actually removed duties on some imported goods.

   'Part of the reason we did that, it's in our own economic interest, but also, as well, it will help stimulate continental and global trade. And this is important for our recovery.'

   'So I think it’s critical that the United States has been a leader for a long time in the goals of an open global economy. I think it’s critical that that leadership continue.    And I’m quite confident that the United States will respect those obligations and continue to be a leader on the need for globalized trade,' Harper said.

   The two leaders instructed their administrations to meet soon to review and develop joint security measures, including management of the shared border. ' Eric Kulisch

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