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The Peace Tower on Parliament Hill in Ottawa, Canada, is framed between Canadian and U.S. flags as people await the arrival of President Barack Obama, Thursday, Feb., 19, 2009. President Barack Obama will meet with Prime Minister Stephen Harper in his first foreign trip as President. The Canadian Press, Graham Hughes
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President Barack Obama and Canadian Prime Minister Stephen Harper arrive in the Rotunda on Parliament Hill in Ottawa, Canada, Thursday, Feb. 19, 2009. The Canadian Press, Tom Hanson

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February 20, 2009

By Julian Beltrame The Press Republican Fri Feb 20, 2009, 07:05 AM EST

OTTAWA — U.S. President Barack Obama strongly pledged sweeping co-operation on a wide range of economic issues Thursday in what appeared to be a designed effort to reassure Canadian insecurities about growing protectionism in his country.

The first visit from the new president appeared to be an unqualified success for Prime Minister Stephen Harper as Obama not only checked off each of his stated concerns — from the border, to autos, to free trade — but offered a rosy view of future relations.

"I expect four years from now the U.S.-Canada relationship will be even stronger than it is today," he said after the leaders' meeting in the prime minister's office.

"I expect increased trade, I think we'll see increased integration of efforts on energy and various industry, and I think that's to be welcomed."

Specifically, Obama said he does not believe the controversial "buy America" clause in his stimulus package will significantly discriminate against Canada.

Rather, he said he and Harper discussed using some of the spending earmarked by both countries for infrastructure projects to improve traffic flow at clogged border crossings.

And, he said it would be possible to include labour and environmental side agreements into the North American free trade deal without disrupting the agreement, a major concern with both Canada and Mexico.

Obama said he had no interest in doing something that would shrink trade.

On autos, Obama made clear he considered the battered industry one that is shared between Canada and the U.S. and said there would be co-operation in government rescue efforts.

The soothing words from the smooth-talking president was welcomed by Canada's business community, which had been awaiting any signal from Obama on where the relationship was headed.

"In my view the meeting was as good as it could get," said Thomas d'Aquino of the Canadian Council of Chief Executives.

But d'Aquino and others cautioned that "the devil is in the details" and that in the U.S. system, the president shares power with Congress on most economic matters.

Jayson Myers of the Canadian Manufacturers and Exporters called it a "a good basis for moving forward" but added that "we've seen good starts before."

"We'll see as time goes on how buy America provisions are interpreted, we'll see how the administration balances border security with efficiency, and we'll certainly see (the impact) of this plethora of regulations coming out of the departments of the U.S. governments," he said.

Business leaders believe the stickiness at the border is probably the most serious and most difficult challenge facing Canada because the Americans see it primarily as a security issue, while Canada sees it as an impediment to trade.

Chamber of Commerce president Perrin Beatty points out that on average a North American automobile involves six or seven crossings of parts and supplies, estimating new regulations have added several hundreds of dollars to the cost.

Harper confronted the issue at his joint news conference with Obama, trying to make the case that Canada is equally concerned with security.

"The view of this government is unequivocal," he said. "Threats to the U.S. are threats to Canada. There is no such thing as a threat to the national security of the United States that does not represent a direct threat to this country."

D'Aquino said he was encouraged that Obama's response was to talk about common security concerns.

"If he had said, 'We are deeply concerned about security in Canada, I would have been worried,' " he said, although he cautioned much work remains to be done before the border problem is resolved.

The same could be said about how the Barack administration will implement the buy America clause in the new stimulus package, said Brenda Swick, a trade lawyer with McCarthy Tetrault.

Although Obama said the U.S. will abide by its trade obligations, those obligations do not extend to states and local governments. Still, she said Obama could wave the protectionist provisions for U.S. trading partners, particularly Canada, Mexico and Europe, by declaring it in the "public interest."

"So if there's a will, there's a way," she said. "I got it more from Harper that there was a will, (but) Obama wasn't as clear."