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Obama ready to sign extension on softwood Add to ...

Did the Obama administration’s decision not to approve the Keystone XL pipeline damage relations with the Harper government? The short answer is no, and proof of that comes Monday, when International Trade Minister Ed Fast will announce the extension of the softwood lumber agreement in Washington.

The agreement, which Canada and the United States signed in 2006 – after years of acrimony, countervails and court actions – expires in 2013. Rather than repeat an unhappy chapter in Canada-U.S. relations, both sides have chosen simply to extend the existing deal until 2015.

Stephen Harper was deeply disappointed by Barack Obama’s decision not to approve the oil pipeline from Alberta to the Gulf. But those who are close to the matter say the Prime Minister has written off the President’s rejection as a temporary setback forced on the administration in an election year — that political adviser David Plouffe had more say in the matter than Secretary of State Hillary Clinton. After the election, assuming Mr. Obama is still President, Mr. Harper hopes and expects he will come around.

As if to demonstrate its good intent, the word from the Obama administration that it was ready and willing to sign an extension on softwood came hard on the heels of the pipeline rejection.

Most important, the implementation of the Beyond the Border agreement announced in December – which seeks to improve both border security and access – is unaffected.

But relations between the two countries will face a bigger test in the months to come, as Canada looks to the United States for help in getting this country a seat at what has turned into the world’s most important trade table: the Trans Pacific Partnership (TPP).

Before the year is out, nine Pacific countries — including the United States, Chile, Australia and Malaysia — are expected to conclude a sweeping free-trade agreement that will open the economies of all to all. Negotiations have gone so well, and the implications for the agreement are so far-reaching, that Japan and Mexico now also want in.

So does Canada, but the Harper government foolishly missed an earlier opportunity to join the discussions by insisting that supply management, which protects Canadian dairy and poultry, be kept off the table. The other countries showed us the door.

Now, belatedly, Canada had decided it is willing to join the talks without preconditions. The feeling in Ottawa is that the final agreement will no doubt protect American and Japanese (if they join) farmers, and Canadian farmers will get an exemption too.

But Australia and New Zealand, especially, fear that new arrivals showing up brandishing new demands could wreck, or at least seriously delay, the agreement.

So the Harper government is hoping the United States will support Canada’s accession to the talks, and will lobby reluctant members on this country’s behalf.

The stakes are enormous. The Conservatives have slowly come to realize that Canada’s future prosperity depends on deepening trade ties with fast-growing Pacific nations. The TPP is the best way to cement those ties. But we are late arrivals to this party, and not particularly welcome.

That is why Mr. Harper plans to personally lobby other TPP leaders at the World Economic Forum at Davos this week. It is why Mr. Fast plans to meet with all nine counterparts over the next two months. And it is why Mr. Harper needs Mr. Obama to be in Canada’s corner.

The good news is that in December Mr. Obama voiced his tentative willingness to see us join the TPP. But Canada will need more from the United States, and soon.

An extension on softwood is welcome. The setback on Keystone XL is probably just temporary. But it’s on the Pacific partnership that Mr. Harper will be asking Mr. Obama to prove he really is Canada’s friend.

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