Obama Says U.S., Canada Must Avoid Erecting Barriers to Trade

Feb. 19 (Bloomberg) -- President Barack Obama said the U.S. and Canada must avoid erecting trade barriers or impeding cross- border commerce amid a worldwide recession.

Obama also said he raised with Canadian Prime Minister Stephen Harper the idea of putting labor and environmental provisions within the main body of the North American Free Trade Agreement without unraveling the accord.

“Now is a time when we’ve got to be very careful about any signals of protectionism,” Obama said at a joint news conference with Harper in Ottawa.

Canada and the U.S. have the world’s largest commercial relationship, with almost $600 billion in trade annually. Each nation is the other’s largest trading partner.

Canada’s exports to the U.S. have more than tripled since 1989, the first year the two countries implemented an accord that became the North American Free Trade Agreement, or Nafta, when Mexico joined in 1994.

Obama’s stance on trade became a sensitive issue after he said during the U.S. presidential campaign that the U.S. should threaten to pull out of Nafta unless Canada and Mexico agree to strengthen labor and environmental protections. He has backed away from that position since winning the election.

In recent weeks, Canadian officials expressed concern about the prospect of a trade spat after the U.S. Congress inserted a “buy American” requirement into a $787 billion economic stimulus bill. The provision was modified in the final legislation.

“It was very important to make sure that any provisions that were there, were consonant with our obligations under WTO and Nafta and I think that was achieved,” Obama said.