A friendly visit

Barack Obama visits, Stephen Harper, Canada's prime minister

Barack Obama sets foot on foreign soil for the first time as president on February 19th, following the tradition of new US presidents meeting first with their neighbours to the north and south (he met with Mexico’s president a week before his inauguration). While battling the global economic crisis will be the prime topic of discussion, the two allies also will talk about some contentious trade issues, including the “Buy America” provisions in the new US stimulus package and Mr Obama’s position on the North American Free-Trade Agreement.

Both the US and Canada are in the midst of major economic downturns. While Canada went into the crisis with stronger fundamentals than the US—including years of fiscal surpluses and a much-stronger banking system—it will also be plunged into recession this year, in no small measure because of slumping demand in the US, by far its largest trading partner, as well as because of plummeting commodity prices. Around one-third of Canada’s GDP comes from exports to the US (it is the biggest exporter of oil and gas to its southern neighbour), yet US imports from Canada, at almost US$20bn in December, have fallen 36% since oil prices peaked in July. Other Canadian exporters, such as those in the automotive, lumber and furniture industries, are also suffering. ...

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[Source: The Economist: News analysis - Posted by FreeAutoBlogger]