I want to grow trade, not contract it: Obama

On his first foreign trip as president of the United States, Barack Obama welcomed efforts by Canada to strengthen the economy and said the two neighbours would work to strengthen the auto industry.

"The work that's being done by this government to stimulate the economy on this side of the border is welcomed," Obama said at a joint news conference with Prime Minister Stephen Harper.

"I’ve provided Prime Minister Harper with an assurance that I want to grow trade and not contract it," he said.

"We concur on the need for immediate, concerted action to restore economic growth and to protect workers and families hit hardest by the recession through lowering taxes, ensuring access to credit, and unleashing spending that sustains and stimulates economic activity," Harper said.

The news conference was short on detail, especially since Obama has caused some nervousness in Canada by promising during the presidential campaign to renegotiate North American Free Trade Agreement, a pact among the U.S., Canada and Mexico.

And the "Buy American" provision in the $787 billion US economic recovery plan requires that only U.S.-made iron, steel and manufactured goods be used for public works projects receiving money from the package. However, Obama has acknowledged previously that any purchases must be in line with international trade treaties, such as NAFTA.

Harper said NAFTA gives both countries some leeway in domestic buying but both leaders said as economies around the world face challenges, it's important for the U.S. and others to resist calls for protectionism.

Stimulus packages

"If we pursue stimulus packages, the goal of which is only to benefit ourselves, or to benefit ourselves, worse, at the expense of others, we will deepen the world recession and not solve it," said Harper. 

'It’s going to be very important for our government to co-ordinate closely with the Canadian government in whatever approach that we decide to take.' — U.S. President Barack Obama

"We have agreed to stimulus measures not just to stimulate our own economies but recognize that we have a synchronized global recession that requires policies that will not just benefit ourselves but benefit our trading partners at the same time," said Harper. 

"The trade challenges we face in North America are common trade challenges," said Harper. "They’re not challenges between countries."

Harper pointed out that in the Canadian stimulus package, some duties were removed on imported goods.

The auto sector

Obama said the two leaders were deeply concerned about the current state of the North American auto industry. He said his economic team was evaluating reports from Chrysler and General Motors on how the companies intend to move forward.

"One thing we know for certain is that there is going to have to be a significant restructuring of that industry," said Obama.

"When we provided our initial federal help to the auto industry, Prime Minister Harper stepped up and provided assistance that was commensurate with the stake that Canada has in the auto industry," he said.

"It’s going to be very important for our government to co-ordinate closely with the Canadian government in whatever approach that we decide to take. And we’re committed to doing that."

Harper said Canada has also been concerned by the "thickening" of the U.S.-Canada border caused by increased security since the Sept. 11, 2001, attacks on the U.S. and the impact it has had on trade.

"The key is to look at how we can look at security in a way that does not inhibit commerce and social interaction," Harper told reporters.

Canadian businesses have complained that some of the security measures enacted by the United States along the border in recent years have hurt cross-border commerce.

Obama said the leaders discussed how they might use the countries' economic stimulus packages to ease "bottlenecks" on the border.

"I think four years from now, relations between Canada and the United States will be even stronger," Obama said.