Obama Raises Nafta Renegotiation During First Official Visit to Canada

Potential strains in relations between the US and Canada were exposed today when Barack Obama, on his first foreign trip as president, hinted at renegotiation of the North American Free Trade agreement.

Obama at a joint press conference with the Canadian prime minister, Stephen Harper, tried to square a campaign pledge to renegotiate the agreement while at the same time avoid sparking a trade war with Canada.

Obama told reporters at the press conference in Ottawa he wanted to begin talks on adding provisions to the agreement relating to workers and to the environment.

"My hope is 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 relationship that exists between the two countries," he said.

It is a risky strategy for Obama to pursue. While some trade protection measures would be popular in parts of the US suffering worst from job losses, the US could suffer if trade partners choose to retaliate.

The president made the promise to renegotiate Nafta on the campaign trail in response to protests in the mid-west that it was partly response for a drain in jobs from the US. Nafta has created a free trade zone between the US, Canada and Mexico.

But Canada continues to champion free trade and has warned that any attempt to renegotiate part of the deal could see the whole thing unravel.

Obama may have raised Nafta with Harper in order to avoid accusations by the media and Republicans of reneging on a campaign pledge so early in his administration.

The president muddied his position on Nafta at the press conference by adding something positive. "Now is a time where we have to be very careful about any signals of protectionism," he said, adding a promise that the US will meet its international trade obligations.

Harper was equally anxious to avoid signs of a split. "I'm quite confident that the United States will respect those obligations and continue to be a leader on the need for globalised trade," he said, though he did not sound totally convinced.

As well as concern over Nafta, the Canadian government has been alarmed by other protectionist moves by Obama such as the "buy America" provisions in his $787bn economic stimulus package, which originally proposed only US steel be used for infrastructure projects. The "buy America" provisions have since been watered down, with Obama saying the US would not do anything that ran counter to existing trade agreements.

Relations between the two were more upbeat on climate change, with the two promising to work together to develop new technologies to reduce greenhouse gases.

Harper, in what sounded like a rebuke to George Bush, who opposed international action on climate change for much of his presidency, said he was confident that the continent had a leader who could provide a direction on climate change.

On Afghanistan, where Canada has troops engaged in the south of the country, Obama said he did not press Harper to send additional troops. The president did not ask him either to extend Canada's commitment beyond 2011, the timeline agreed by the Canadian parliament.

"I certainly did not press the prime minister on any additional commitments beyond the ones that have already been made," Obama.

"All I did was to compliment Canada on, not only the troops that are there ... but also the fact that Canada's largest foreign aid recipient is Afghanistan."