Bush, Harper, Calderon Defend Trade Amid Backlash

Bush, Harper, Calderon Defend Trade Amid Backlash

By Mark Drajem and Jens Erik Gould

April 21 (Bloomberg) -- President George W. Bush and the leaders of Canada and Mexico are using a summit meeting today in New Orleans to defend free trade and $930 billion in cross-border commerce against a political backlash. It won't be easy.

Canadian Prime Minister Stephen Harper and Mexican President Felipe Calderon have each made lowering trade barriers, cutting regulation and supporting the North American Free Trade Agreement a hallmark of their administrations and will make the case with Bush for those policies.

``All three governments want to push back on the perception that Nafta is a disaster,'' said Eric Farnsworth, vice president of the Council of the Americas, a business-backed group that will meet with the leaders tomorrow. ``The overriding political imperative is the support of Nafta.''

Bush and Calderon reopened the Mexican consulate in New Orleans today, a move they heralded as a sign of both the recovery following Hurricane Katrina in 2005 and of the close economic ties between the two countries.

``Mexico and the United States are working together to build a future of prosperity and opportunity for people on both sides of the border,'' Bush said.

`Three Amigos'

Each leader faces opposition related to Nafta, the world's largest free-trade agreement. Analysts are predicting more symbolism than tangible results from this fourth summit of the ``three amigos'' dealing with security and commerce.

``They will have some jambalaya, eat some gumbo and send the right signals, but don't expect much,'' said Michael Hart, a political science professor at Carleton University in Ottawa.

One goal of the meeting, which wraps up tomorrow, is to harmonize standards in areas such as fuel efficiency and automobile testing, Dan Fisk, director for Western Hemisphere affairs on Bush's National Security Council, told reporters on April 18.

Bush, Calderon and Harper will also pledge greater cooperation on seizing fake products, Fisk said.

A business advisory group made up of executives from United Parcel Service Inc., Exxon Mobil Corp. and General Motors Corp., which all have operations in Mexico and Canada, will meet with the leaders tomorrow.

In the U.S., the loss of jobs due to international competition has become an issue in this year's presidential election campaign as Republican Bush comes to the end of his presidency. The Democratic presidential candidates are squabbling over who dislikes Nafta more, and Congress voted to delay consideration of a similar trade accord with Colombia.

Clinton Versus Clinton

While campaigning in Pittsburgh last week, Senator Hillary Clinton of New York renewed her pledge to renegotiate Nafta to beef up labor standards and environmental protection provisions, and she took a swipe at her husband Bill Clinton for pushing the agreement through Congress.

``As smart as my husband is, he does make mistakes,'' Clinton said April 14. ``We've now had 15 years of experience with Nafta, and the evidence is clear that we have to change the basic provisions.''

Her rival, Senator Barack Obama of Illinois, counters that he has always opposed Nafta; he says Clinton only became disenchanted as part of the election campaign.

Protesters

As he arrived in New Orleans, Bush was greeted by a few dozen protesters waving signs against Nafta and complaining that the real aim of the three leaders is to create a North American political union.

The opposition isn't just in the U.S.

In Mexico, 150,000 farmers shut down Mexico City's main boulevard during a Jan. 31 march against cheap food imports, saying they are being put out of business by subsidized U.S. crops, especially corn.

They say Nafta will push more Mexican farmers off their land, forcing them to try to enter the U.S. illegally looking for better work.

In Canada, which sells about 75 percent of its exports to the U.S., attention is focused on what the next administration in the U.S. might do to weaken Nafta.

Congress has already been moving to restrict trade and immigration among the nations. They tried to block a requirement that Mexican trucks be allowed on American roads, and scuttled efforts by Bush to allow in more temporary workers from Mexico, which has soured relations between the nations.

`Integral Vision'

``Immigration is a natural economic phenomenon between the neighboring economies,'' Calderon said today. ``That's why we should have an integral vision on the issue.''

The U.S. Department of Homeland Security has proposed requiring passports to travel to Canada, a move that has drawn similar howls of protest from leaders in Ottawa.

Congress is also moving forward with legislation to require country-of-origin labeling of meat, which might destroy the cross-border coordination of hog producers.

In Manitoba, hog farmers are beginning to euthanize hundreds of thousands of young pigs because U.S. farmers, scared by the proposal, are breaking contracts and refusing to buy them, the National Post reported.

``Protectionist forces have been gathering steam for some years and they're showing no signs of abating,'' Canadian Trade Minister David Emerson said April 2.

`Gathering Steam'

Yet when the so-called Security and Prosperity Partnership began in Waco, Texas, in March 2005, Bush and his counterparts pledged to improve the flow of people across the borders, cooperate on regulatory standards and promote collaboration on transportation and other issues.

Since then, the three leaders have met with business leaders each year and affirmed their support for the concept. After their last summit in Montebello, Quebec, they announced a joint plan to fight avian flu, and agreed to cooperate on energy and protect copyrights and patents.

Future joint summits might end up being transformed into forums that a new U.S. president could use to seek changes to the trade accord.

Instead of scrapping Nafta, the forum ``could be adapted'' to deal with the labor and environmental issues raised by Obama and Clinton, said Christopher Sands, a senior fellow at the non- partisan Hudson Institute in Washington.

To contact the reporter on this story: Mark Drajem in New Orleans at mdrajem@bloomberg.net; Jens Erik Gould in New Orleans at jgould9@bloomberg.net.