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Obama not likely to renegotiate NAFTA, ex-diplomat says

Vancouver Sun

Obama not likely to renegotiate NAFTA, ex-diplomat says

Peter O’Neil, Europe Correspondent

Canwest News Service

13 November 2008

PARIS - President-elect Barack Obama will likely find a way to back off his election campaign promise to renegotiate the North American Free Trade Agreement, a former Canadian ambassador to both the U.S. and France said here Thursday.

"Clearly he has made the threat during the campaign," Raymond Chretien told Canwest News Service after a speech to the France-Canada Chamber of Commerce.

"But once in power in January, once apprised of what is at stake here, I doubt very much that he will want to reopen that."

Chretien, nephew of former prime minister Jean Chretien, seconded the view of a Belgium-based analyst who said earlier this week that a NAFTA renegotiation is unlikely.

Both Chretien and Fredrick Erixon, director of the European Centre for International Political Economy, said opening up NAFTA will be seen as too risky in Washington because of fears the U.S. could lose its access to Canadian energy guaranteed under the continental accord.

"I think that when apprised of their dependency on Canada’s imports, not only of oil but of gas, any president would think twice about reopening NAFTA," said Chretien, who starting serving as Canadian ambassador to Washington when the trade deal took effect in 1994.

He noted that Bill Clinton opposed North American free trade before his election in 1992.

He said the Obama administration could perhaps be accommodated through a side letter signed by Canada, the U.S. and Mexico relating to labour and environmental standards.

Chretien, while confident on NAFTA, said Canadian diplomats in Washington will have to keep a close eye on other possible initiatives that could hurt Canadian industries.

"The danger for Canada is the timing of the financial crisis and the hard economic recession might give rise to protectionist tendencies in Congress."

Erixon told Canwest News Service this week that current talks aimed at striking a comprehensive Canada-European Union deal to lower trade and investment barriers could send a positive signal to Washington that it’s counterproductive to enact protectionist laws.

But Chretien said he’s not optimistic about the prospects of a Canada-EU trade deal.

He said the world financial crisis is also sparking protectionist sentiment in Europe as well as the U.S., and that could sap European enthusiasm for negotiations.

Prime Minister Stephen Harper and French President Nicolas Sarkozy, who currently holds the rotating EU presidency, announced last month in Quebec City plans to begin negotiations on a compressive trade and investment agreement.

Chretien, now working out of the Montreal office of the Canadian law firm Fasken Martineau, said he was surprised by the lack of enthusiasm shown by the EU during the announcement.

"My fear is that because of this global financial crisis the appetite in Europe will not be the same," he said.

"Am I optimistic? I cannot say that I’m optimistic right now when I see that kind of lukewarm launch of those talks."

Chretien, who retired from the foreign service in 2004, was Canada’s ambassador to the U.S. from 1994 to 1996. He has extensive experience in Europe, serving as ambassador to Belgium and Luxembourg from 1991 to 1994 and to France from 2000 to 2003.