Obama no threat to NAFTA: experts

U.S. President Barack Obama may turn out to be far better for Canadian free trade and economic interests than candidate Barack Obama ever pretended to be, experts on both sides of the border agree.

U.S. president-elect Barack Obama may turn out to be far better for Canadian free trade and economic interests than candidate Barack Obama ever pretended to be, experts on both sides of the border agree.

Obama — triumphant Tuesday in his bid to become America's first-ever black president-elect — was far from neighbourly in his pronouncements impacting Canada during the campaign.

President-elect Barack Obama gives his acceptance speech at Grant Park in Chicago Tuesday night, Nov. 4, 2008. (AP Photo/Morry Gash) ((Morry Gash/Associated Press))
At times, he sounded stridently protectionist and even hinted he might tear up the NAFTA trade agreement to protect industrial jobs in hard-hit parts of the U.S. industrial heartland.

But even if he meant it at the time — and an Obama adviser confided to Canadian officials he didn't — most analysts say opening up or scrapping the most successful trade deal in history is not in the cards.

"Canada can live very well with a president Obama," said Thomas d'Aquino, president of the Canadian Council of Chief Executives, representing the country's largest companies.

"I've watched many elections in the U.S. and what is said in a campaign and what comes out of the Oval Office are often very different."

The nearly 20-year-old Canada-U.S. trade deal, expanded to include Mexico in the mid-1990s, has proved successful for all three countries, with expanded trade flows across their borders. However, critics in the U.S. say it has led to job losses in that country.

Increased dependence

Meanwhile, critics in Canada worry about the increased dependence of Canadian industry on the American market and rising U.S. protectionism that has led to curbs on Canadian softwood lumber, wheat and other products in the United States.

Former U.S. ambassador to Canada Gordon Giffin said Obama has talked about strengthening the environmental and labour side agreements to the trade deal "and these are not issues with Canada (but) they may be issues with Mexico."

"The NAFTA debate is much ado about nothing," he added.

"The issue is what to do going forward" about tackling the thickening border, environmental co-operation and labour mobility between the three countries.

Even if Obama were seriously thinking of opening up NAFTA, which would pose practical and political hurdles, his hand would likely be stayed by the provision in the trade deal that gives the U.S. access to valuable Canadian oil production.

U.S. priorities

In Obama's list of priorities, weaning the U.S. off dependence on Middle East oil trumps rust-belt jobs that likely aren't returning anyway, said Alan M. Rugman, a professor of international business at Indiana University who has written extensively on the continental trade deal.

And for that, he needs NAFTA in place, he said.

"The energy program is a top priority so very speedily an Obama administration will state how valuable NAFTA is in guaranteeing Canadian energy supplies," he explained.

"Besides, I think Canadians have been tipped off that NAFTA is secure," he added, referring to the confidential assurance from an Obama aide that caused a stir in both countries last winter.

D'Aquino said he does expect an Obama administration would seek to strictly enforce current trade deals — if only to give some ballast to his soaring campaign rhetoric — but added that would not impact negatively on Canadian interests.

The widespread belief that Obama won't bring economic hardships for Canadians is reflected in polls in Canada showing overwhelming support for the charismatic Chicago politician, with most polls showing close to 80 per cent of Canadians saying they would have voted for him if they could.

Canadians could also benefit from Obama's intention to invest in new green energy technologies, which has the potential to generate high-tech jobs both in the U.S. and Canada, Rugman added.