February 19, 2009 / 9:22 PM / in 9 years

Obama wants to alter NAFTA without hurting trade

OTTAWA (Reuters) - President Barack Obama said on Thursday he wanted to begin talks to add enforceable labor and environmental provisions to the North American Free Trade Agreement without disrupting trade.

<p>President Barack Obama (L) and Prime Minister Stephen Harper walk down the Hall of Honour on the way to a news conference on Parliament Hill in Ottawa, February 19, 2009. REUTERS/Chris Wattie</p>

“My hope is as our advisors and staffs and economic teams work this through that there’s a way of doing this that is not disruptive to the extraordinarily important trade relationship that exists between the United States and Canada,” Obama said at a joint news conference in Ottawa with Prime Minister Stephen Harper.

Obama promised during last year’s presidential campaign to “fix” NAFTA by adding enforceable labor and environmental provisions to the core of the pact and by changing an investment measure that critics say gives business too much power to challenge government regulations.

That raised concerns in both Canada and Mexico about the future of the pact, which has been in force for 15 years.

Although NAFTA already has labor and environmental provisions, those are contained in separate “side” agreements rather in the core text of the pact.

“It strikes me, if those side agreements mean anything, then they might as well be incorporated into the main body of the agreements so that they can be effectively enforced,” Obama said.

“I think it is important, whether we’re talking about our relationships with Canada or our relationships with Mexico, that all countries concerned are thinking about how workers are being treated,” he said.

Obama also defended “Buy American” provisions of the new $787 billion U.S. stimulus package, saying they would be implemented in accord with both NAFTA and World Trade Organization rules.

He said it was important that countries resist “beggar-thy-neighbor” policies in the midst of the current world economic contraction to avoid making it worse.

“And as obviously one of the largest economies in the world, it’s important for us to make sure that we are showing leadership in the belief that trade ultimately is beneficial to all countries,” Obama said.

Reporting by Doug Palmer; editing by Todd Eastham

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