Obama, in Canada, Warns Against Protectionism

• FEBRUARY 20, 2009

By JONATHAN WEISMAN

OTTAWA -- President Barack Obama, in his first foreign trip, sought to reassure Canada that he had no intention of turning some of his campaign rhetoric on trade into actual barriers between the U.S. and its largest trading partner.

"Now is a time where we've got to be very careful about any signals of protectionism, because as the economy of the world contracts, I think there's going to be a strong impulse, on the part of constituencies in all countries, to see if they can engage in beggar-thy-neighbor policies," Mr. Obama said.

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President Obama met with Canadian Prime Minister Stephen Harper for the first time Thursday.

Visiting Canada has traditionally been the first trip for a new U.S. president. In his daylong trip here, Mr. Obama touched upon an array of bilateral concerns, from trade to a declining North American auto industry to Afghanistan, where Canadian combat forces are set to leave by mid-2011.

He capped the visit with a joint appearance with Canadian Prime Minister Stephen Harper that highlighted some strains that have developed between the two sides in recent years. Mr. Harper took some apparent swipes at the Bush administration's position on climate change, noting that Washington was only now forming a comprehensive policy on the environment and energy.

"I will be watching what's done in the United States with great interest," the Canadian leader said. "But I'm 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."

Mr. Harper also questioned whether the North American Free Trade Agreement could be reopened, as Mr. Obama had pledged to do during the campaign, without "unraveling what is a very complex agreement." Mr. Obama reiterated his belief that Nafta side agreements on environmental and labor standards should be incorporated into the main agreement to ensure enforcement.

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"My hope is that as our advisers 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," Mr. Obama said. He repeatedly stressed his commitment to open trade between the U.S. and Canada.

Canada's concerns over Mr. Obama's pledge to reopen Nafta have been exacerbated by a provision in the president's just-passed $787 billion economic-stimulus package that stipulates that certain building materials for infrastructure projects funded by the plan come from U.S. suppliers. The plan says the provision must be carried out in accordance with the U.S.'s obligations under the World Trade Organization, but questions remain over how the two mandates can be reconciled.

Mr. Obama had criticized Nafta on the campaign trail last year in hard-hit industrial states, where many people blame the trade deal for robbing the U.S. of manufacturing jobs.

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President Barack Obama is saluted by a Royal Canadian Mountie as he arrives in Ottawa Thursday.

U.S.-Canada relations are likely to become a testing ground for Mr. Obama's efforts to balance the demands of his liberal and labor backers with the broader considerations and sensitivities he must consider as president. Before his departure, some labor and progressive groups sent a letter to Mr. Obama urging him to stand by his Nafta pledge.

Environmentalists are pushing Mr. Obama to take a firm stand against Canada's already ailing oil-sands industry, which emits more greenhouse gases in the production of oil than are emitted in the production of ordinary crude. Mr. Obama brought along his energy czar, Carol Browner, who is expected to push hard for policies to address climate change.

The two leaders announced an agreement to begin a clean-energy dialogue. White House aides had said Mr. Obama would bring up his effort to advance research into technologies that capture carbon emissions and trap them underground, even from dirty fuel sources, such as Canadian oil sands and U.S. coal. The stimulus plan provides $3.5 billion for developing carbon capture and sequestration technology.

Denis McDonough, Mr. Obama's deputy national security adviser, said the president would also press for the tougher greenhouse-gas reduction targets advocated by Mexican President Felipe Calderon.

On Afghanistan -- where Mr. Obama has pledged to increase U.S. troop presence by about 50% -- the president didn't push Canada to rethink its plans to withdraw its troops. Instead, he said he praised Canada for its sacrifices and for making Afghanistan its largest recipient of foreign aid.

Ottawa has said it won't renew its troop commitment to a conflict that has killed 108 Canadian soldiers.

Write to Jonathan Weisman at jonathan.weisman@wsj.com

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