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NAFTA partners worry about Democrats' anti-free trade rhetoric
OTTAWA
Petroleumworld.com, Feb 28, 2008Canada, United States and Mexico on Wednesday were critical of US Democratic presidential candidates for suggesting the US might pull out of NAFTA, warning that protectionism would be devastating to the region.
Canada's Trade Minister David Emerson even hinted that if the North American Trade Agreement were to be revisited, a provision giving US priority access to Canadian oil would be on the table.
The 1994 North American Free Trade Agreement created the largest trading bloc in the world by eliminating import tariffs on goods circulating among partners Canada, the United States and Mexico.
In a televised debate late Tuesday, Democrats Hillary Clinton and Barack Obama said they would ask Canada and Mexico for new concessions in the pact to strengthen their respective labor and environmental standards, or quit NAFTA within six months.
"I will say we will opt out of NAFTA unless we renegotiate," said Clinton, echoed by Obama, who commented: "We should use the hammer of a potential opt-out" to force Canada and Mexico to reopen trade talks.
Canada's Finance Minister Jim Flaherty told reporters that NAFTA was of "tremendous benefit" to Americans.
"Perhaps the nominees have not had the opportunity to familiarize themselves with the benefit to Americans and the American economy of NAFTA ... (and) to recognize the mutual benefits that come out of free trade."
Flaherty acknowledged that both Democrats' remarks were made in the heat of a presidential nomination battle, but he urged them to seek advice from "those who are very knowledgeable about NAFTA" before making sweeping judgments for political gain.
Outside parliament, Emerson said: "There's no doubt if NAFTA were to be reopened we would want to have our list of priorities," and hinted that US access to Canadian oil could be one of them.
"Knowledgeable observers would have to take note of the fact that we are the largest supplier of energy to the US and NAFTA has been the foundation for integrating the North American energy market," said Emerson.
Under NAFTA, Canadian oil exports to the United States must be maintained if there is a worldwide shortage or supply disruption, at least to the same level available for Canadian consumers.
The provision has been a major concern to Canadian critics.
Clinton and Obama's comments were also criticized by US Commerce Secretary, Carlos Gutierrez, during a visit to Mexico.
"I don't want to get into the US elections, but NAFTA is a successful agreement. It involves a 230 billion dollar trade relation that might look simple, but it took a lot of work to reach that level of trade and investment," he told reporters in Mexico City.
"A protectionist policy would be devastating," he said in fluent Spanish.
Gutierrez recalled that one of the first rules established in NAFTA "was not to have to change laws or go before the legislature to renegotiate the agreement," adding that NAFTA alterations and improvements can be made during a change of administration.
"You don't need a rhetorical gimmick" to understand that, he stressed.
"If you go over the figures, it's clear (NAFTA) has benefited the three countries," Gutierrez added.
For his part, Mexico's Economic Secretary Eduardo Sojo defended NAFTA, saying it contributed to a two-point drop in unemployment in his country, from 6.9 percent to 4.9 percent, from 1994 to 2007.
"We believe in free trade and innovation. We don't propose anything that can isolate us from the rest of the world," he added.
And to "protectionist voices" in the United States who would renegotiate NAFTA, Sojo had this to say: "Not a step backwards, not even to get up speed."
Story from AFP
AFP 27 2302 GMT 02 08Copyright© 2007 Petroleumworld. All rights reserved.
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