June 12, 2008 / 7:34 PM / in 9 years

Canada lobbies Congress in defense of NAFTA

WASHINGTON (Reuters) - Attacks on the North American Free Trade Agreement in the U.S. presidential campaign and in the U.S. Congress are prompting Canada to send out its diplomats to give the 14-year-old pact a boost.

Senior envoys from Canadian consulates in New York, San Francisco, Detroit, Miami, Denver, Seattle and seven other U.S. cities fanned out across Capitol Hill on Wednesday to argue the agreement has benefited Canada, Mexico and the United States far more than it has hurt them.

“Yes, there have been job losses in the United States and in Canada because of technological changes, because of competition from low-cost economies around the world,” Canadian Ambassador Michael Wilson said in a speech.

“But that doesn’t mean we can’t compete. ... New U.S. jobs have been created by rising U.S. exports, which have been made more competitive by the imports received from your NAFTA partners,” Wilson said, recapping the message carried to more than 60 congressional offices.

Democratic presidential candidate Barack Obama has promised to renegotiate NAFTA to include stronger protections for workers and the environment, after a tough Democratic primary battle with Hillary Clinton in which both candidates frequently criticized the agreement that took effect January 1, 1994.

Encouraged by that contest, a group of manufacturing state Democrats have introduced legislation that would require the White House to review and potentially renegotiate existing U.S. trade pacts, which they blame for millions of lost jobs.

Wilson argued NAFTA, by eliminating tariffs between the United States, Canada and Mexico, makes it easier for North American companies to compete against lower-wage countries like China. U.S. exports to Canada also support one in 25 American jobs, or about 7.1 million, he said.

“This is the essence of the North American economic space. It is about North American companies working together across the border to improve efficiency and deliver better products ... And people want to put that relationship into jeopardy,” Wilson said.

Ian Friendly, executive vice president of U.S. food manufacturing giant General Mills, said his company has done well under NAFTA, “which eliminated virtually all tariffs on our key products, along with most other non-tariff restrictions.”

The company’s No. 1 breakfast cereal, Cheerios, is made in United States with the thousands of railcars of oats it imports duty-free from Canada under the trade pact, Friendly said.

Smooth North American trade flows are vital to the operation of many U.S. companies, he said.

“Above all, we don’t want to go back to the bad old days before NAFTA and the U.S.-Canada free trade agreement, when the supply chain was snagged by tariffs and licensing agreements,” Friendly said.

Editing by Doina Chiacu

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