Canada concerned about protectionism if NAFTA dies

Wed Feb 27, 2008 2:19pm EST
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By Randall Palmer

OTTAWA (Reuters) - Canada voiced concern on Wednesday about "protectionist outbursts" from the United States if that country were to pull out of the NAFTA trade agreement as Barack Obama and Hillary Clinton are threatening.

The two Democratic presidential candidates said in a debate on Tuesday that they would opt out of NAFTA, the North American Free Trade Agreement, unless certain environmental and labor standards were renegotiated.

"I've been very concerned for a couple of years now. The rhetoric of protectionism has been creeping, it's been getting more strident, it's permeating Congress, protectionist groups are flexing their muscle," Canadian International Trade Minister David Emerson told a crush of reporters.

"And it's not just the heat of the election campaign that's causing concern."

Emerson said that if the United States left NAFTA, which also includes Mexico, he did not envisage it suddenly erecting large tariff barriers.

But he did see the possibility of long-standing disputes erupting again and not being easily settled.

"The biggest risk is that there will be periodic outbursts of protectionist sentiment. It may be softwood lumber one day, it may be beef another day. The real risk is that you lose the ability to resolve these disputes in a relatively neutral and objective way," he said.

Canada has run substantial trade surpluses with the United States under NAFTA -- for 2007 it was C$85.2 billion ($86.9 billion at current exchange rates) -- but Emerson dismissed this as "simply an accounting outcome."   Continued...