Financial Times FT.com

US presidential election

Canada Nafta dispute takes another twist

By Bernard Simon in Toronto and Daniel Dombey in Washington

Published: March 7 2008 02:00 | Last updated: March 7 2008 02:00

The dispute over Canada’s involvement in the US presidential race took a new turn on Thursday as Hillary Clinton’s campaign and the Canadian government both fended off allegations that Mrs Clinton’s staff had told Ottawa not to worry about her stance on the North American Free Trade Agreement.

Reporters at CTV, a Canadian television network, said a senior Canadian official had told them in a casual conversation last week that Mrs Clinton’s campaign had assured the Canadians that her promise to renegotiate Nafta should be taken “with a grain of salt”.

The Clinton campaign fiercely denied the suggestion. “We can and do flatly deny this report and urge the Canadian government to reveal the name of anyone they think they heard from,” said Phil Singer, a campaign spokesman.

The dispute is all the more sensitive because of a leak this week that revealed that the economic adviser of Barack Obama, Mrs Clinton’s rival for the Democratic nomination, had reassured Canadian diplomats about his campaign’s trade policy – in spite of earlier denials by the Obama campaign. Mr Obama has also promised to renegotiate Nafta.

The Canadian memo, summarising a conversation between Austan Goolsbee, Mr Obama’s economic adviser, and staff from the Canadian consulate in Chicago, was obtained by the Associated Press just ahead of primaries in Texas and Ohio, where perceived job losses from international trade were big issues. Mr Obama lost the popular vote in both contests.

Before the memo had surfaced, Mr Goolsbee had responded to questions about possible contacts by saying, “I did not call these people” – an oblique reference to the fact that it was the Canadian consulate, not he himself, who had initiated the meeting.

The CTV reporters say by mentioning contacts with the Clinton campaign, Ian Brodie, the chief of staff of Stephen Harper, Canada’s prime minister, had given them the initial tip-off that led to the damaging stories about Mr Obama. The Obama link surfaced after subsequent checking with other sources. The Canadian government says Mr Brodie “does not recall” discussing the issue with reporters.

Canada’s opposition leader called for Mr Brodie to be sacked. “This was clear involvement in American politics,” said Jack Layton, New Democratic party head.

Mr Harper issued a careful response after having ruled out Mr Brodie as the source of the leak earlier in the week. “I’m not going to comment on rumours,” he told parliament.

Mr Harper told parliament on Thursday that the clerk of the privy council, Canada’s most senior civil servant, would undertake ”a thorough internal investigation” into the leaks.

He promised that the government would take whatever steps the clerk “believes are necessary”.

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