December 5, 2007 / 2:28 PM / 10 years ago

Canada hurt by U.S. security mindset, minister says

OTTAWA (Reuters) - Washington’s overriding concern for security and its heightened protectionism are hurting the world’s largest trading relationship, Canada’s trade minister said on Monday.

<p>Minister of International Trade David Emerson answers questions from reporters outside the House of Commons on Parliament Hill in Ottawa in this file photo from June 7, 2007. REUTERS/Patrick Doyle</p>

In the prepared text of a speech he was delivering in Miami, Trade Minister David Emerson had tough words for his country’s top trading partner, criticizing Washington for “escalating protectionist rhetoric” and a “rigidity of mindset” that he said was damaging cross-border business.

“We see ‘security’ trumping all else in ways that are now hurting cross-border trade, and the legitimate and beneficial movement of people,” Emerson said.

“Looking inward and turning protectionist will not help. It will set all of North America back. It will weaken our competitiveness, and it will mean even tougher adjustments in the years ahead,” he said.

Nearly 80 percent of Canadian exports go to the United States, making Canada’s economy closely bound to that of its southern neighbor. Trade between the two countries totaled more than $530 billion in 2006, forging the world’s biggest economic relationship.

However, Canada’s trade surplus fell to its lowest in nearly nine years in September, in part as exports to the United States sagged and the Canadian dollar soared.

The United States has made matters worse by imposing stricter border controls, such as additional fees for product inspections and new regulatory requirements.

Washington’s new rules for cross-border travel already require passports for people flying into the United States from Canada. From next year they are scheduled to be required for the much more frequent land crossings.

“We recognize that the security measures are, for the most part, not specifically aimed at Canada, but cross-border industries are paying the price,” said Emerson.

“From a Canadian perspective, we face a critical historical moment ... The world needs renewed U.S. trade leadership. We need a manifest commitment to long-time friends: a commitment to the free and open flow of trade within North America.”

Canada is particularly keen to protect its trade relationship with the United States due to growing competition from China and other Asian countries who sell to the U.S. market.

Emerson was speaking to the Miami Conference on the Caribbean Basin, where he emphasized Ottawa’s interest in re-engaging with Latin America and the Caribbean through trade deals.

Reporting by Louise Egan; Editing by Rob Wilson

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