Harper 'surprised' by protectionist feelings from U.S.

Canada has changed its views when it comes to trade to the point that protectionist feelings on the Canadian right are "virtually non-existent,"Prime Minister Harper told a business audience in Ottawa Monday.

Harper said critics who opposed the North American Free Trade Agreement 25 years ago "predicted the disappearance of Canada as a nation" and "took a credibility hit" as a result.

But Harper admitted he issurprised by the strong "protectionist discourse" coming from the United States.

Harper was participating in a question-and-answer"dialogue" at a meeting of the Canadian American Business Council, answering questions put to him by Maryscott Greenwood, an American government relations lawyer and former Clinton appointee to the U.S. embassy in Ottawa.

The theme for this year's CABC gathering is the state of Canada-U.S. relations after the U.S. presidential election.

Replying to a question about whether "Obama lost Canada" during his first term as president, Harper told the audience of U.S. and Canadian businesspeople that Canada's most important relationship remained the one with the United States.

He threw in the fact that he had just talked to Israeli Prime Minister Benjaman Netanyahu, and quipped "talk about a difference in neighbourhood."

As soon as the interview was over, the Prime Minister's communications director said in an email, "The call happened last Thursday. The two leaders spoke about the recent developments between Israel and Hamas in the Gaza Strip.

The prime minister told PM Netanyahu that Canada supported Israel's right to defend itself, while urging Israel to take precautions to avoid civilian casualties."

The 'tyranny of small differences'

In a wide-ranging conversation focusing on trade, Harper lamented what he called "the tyranny of small differences" in regulations. This was in response toGreenwood's story abouthow some Canadian pipeline crewswere almost prevented from helping out in New Jerseyin thewake ofHurricane Sandy due to different safety regulations between the two countries.

Harper saidwhen his government was sending stimulus money out the door after the 2008 financial crisis, it took shortcuts around regulations and found that in "99 per cent " of the cases, it made no difference. "There's nothing like an emergency to tell you whether a process is important," Harper said.

Harper also talked about the new Detroit-Windsor bridge and whyCanada was willing to pay Michigan's share of the $1-billioncost. "The Detroit-Windsor crossing is the largest border crossing in the world in terms of economic flow." Everyone in Michigan wants the new bridge, Harper claimed. "Given the support on the other side, given that everybody wants it done, the best way for that to happen, because of the complexity of your system, was for us to pay for both sides of it... we'll be getting all that back from the tolls on both sides."

The prime minister made reference to the proposed Chinese-owned CNOOC takeover of Canadian energy producer Nexen. His government has already added a 'rigorous" national security test to theInvestment Canada Act, he said, and has included new guidelines about state-owned enterprises. But he had no news about the Nexen deal now being reviewed by his government. Nodecision is expected before December.

The Toronto Argonauts and Abbey Road

On the lighter side, a relaxed Harper answered a question about how he followsCFL football because there's no hockey to watch. He related an incident from 1971 when he was 12 andthe Toronto Argonauts lost to Calgary. " It was the only time I cried in front of the TV at a sports event. We had been waiting for 20 years. Obviously I was growing up in Toronto then, and the Argonauts were my team." Now, Harper said, he'll have to cheer for his new home team, Calgary. "The good thing about the Grey Cup is that a Canadian team always wins."

Harper also talked about how, after a G20 summit, his family planned aphotograph of the four of them walking in single file across a zebra crossing at Abbey Road in London, in homage to the iconic Beatle's album cover. He'd always been a Beatles fan and it was his 50th birthday, but he didn't knowthat his wife had arranged a tour of the famous Abbey Road Studio. Inside, he was able to try out the pianos and keyboards that the Beatles once used. "My disappointment was that when I left they presented me with a CD. They had been recording, and if I'd known, I would have tried to play something and do it well, but I was just fooling around."

The importance of China

One of the earlier speakers at the conference, Jim Prentice, a former cabinet minister in the Harper government now a vice-presidentwith CIBC, notedthat it's likely Obama will spend the first 18 months of his second term on domestic issues, which Prentice said would be beneficial for Canada given that the two countries share the "largest free-market energy system in the world."

Prentice's main point was that it is essential that Canada, an oil-producing nation that sends 99 per cent of its oil exports to the U.S.,seek other markets, specifically in China.

He said that Canada's oil riches have made it "too easy" to be lulled into complacency and miss beinga player in what he called the "global chessboard" of energy.That hasmeant that Canada often sells energy at what he termed a 35 per cent discount.

Prentice said he applauds Harper's decision to diversify Canada's energy markets.

"Mere ownership of a resource base does not make any country an energy superpower," he said, describing Canada as more of a "price-taker" than "price-maker."

The fact that the U.S. is well on its way to energy sufficiency isone reason it is vital for Canada to access the Chinese market, Prentice said,and he suggested that there is an opportunity now to develop that access.He characterizes the U.S.-China relationship as declining,whereas the state of Canada-China relations is "blossoming."