Obama reassures Canada on open trade

OTTAWA Thu Feb 19, 2009 11:30pm GMT

1 of 16. President Obama and Canadian Prime Minister Stephen Harper walk down on the way to a news conference on Parliament Hill in Ottawa, February 19, 2009.

Credit: Reuters/Chris Wattie

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OTTAWA (Reuters) - U.S. President Barack Obama on Thursday assured Canada, his country's biggest trading partner, he would not pursue protectionist policies and the two neighbors agreed to cooperate on cleaner energy technology.

Obama, on his first trip abroad as president, sought in talks with Prime Minister Stephen Harper to allay Canadian concerns raised by a "Buy American" clause in a $787 billion U.S. economic recovery plan he signed this week.

"Now is a time where we have to be very careful about any signals of protectionism," Obama told a joint news conference after several hours of talks with Harper on his one-day visit.

He stressed the United States would meet its international trade obligations and told Harper he wanted to "grow trade not contract it."

"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 sides announced they would develop environmentally friendly technologies that would enable them to tap their vast fossil fuel resources with less pollution. The technology is not cost-effective now.

But Obama and Harper announced no steps toward introducing a cap-and-trade system to reduce carbon emissions. Obama, who took office last month, campaigned on a pledge to reduce U.S. greenhouse gas emissions by 80 percent of 1990 levels by 2050. Canada says it supports a North American-wide system.

In contrast to a passive approach from his predecessor George W. Bush, Obama is committed to tackling global warming, but he said climate change initiatives must be balanced against economic considerations in the midst of a worldwide recession.

Harper said he was willing to look at strengthening environmental and labor provisions of the North American Free Trade Agreement, something Obama has said he wants. But the Canadian leader said he did not support renegotiating the agreement, which has boosted trade between the two countries.

"PRESSING CHALLENGE"

Discussing plans to cooperate on "clean energy" technology, Obama said this was "one of the most pressing challenges of our time." A White House official said they would work on "elements like carbon capture and sequestration and the smart grid."

Carbon dioxide is the main greenhouse gas blamed by scientists for warming the Earth. Carbon sequestration, which is not yet commercially viable, involves capturing the gas and storing it underground before it enters the atmosphere.

"We can make our economies more energy-efficient. That saves consumers money and saves businesses money. It has the added advantage of enhancing our energy security," Obama said.

Environmentalists have campaigned against the greenhouse gas emissions from the United States' huge coal deposits and Canada's oil sands, a major source of U.S. crude oil.

"As two relatively wealthy countries it is important for us to show leadership," Obama said. But participation by India and China, two huge greenhouse gas emitters, was "absolutely critical" to tackling climate change, he said.

On Afghanistan, where Canada has 2,700 troops as part of a NATO-led force fighting a growing insurgency, Obama said he had not asked for more military help. Obama ordered 17,000 fresh U.S. troops there this week to battle the insurgency. Canada plans to withdraw its troops in 2011

(Additional reporting by Doug Palmer in Washington and Randall Palmer in Ottawa; Editing by David Storey)

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