WASHINGTON -- Canada may have to give up its protectionist marketing boards if it wants to join a new free-trade group of Pacific Rim countries, U.S. President Barack Obama suggested Monday.
Not to be cowed, Prime Minister Stephen Harper flatly warned an influential Washington audience the United States is going to have to start competing with Asia -- and paying market rates -- for Canadian oil.
The sharp-elbowed exchanges belied the bland "Three Amigos" bureaucratese that made up the official line following a trilateral talk at the White House dubbed the North American Leaders Summit.
Harper sat down with Obama and Mexican President Felipe Calderón for their first such meeting in almost two years -- and the last before Calderón leaves office this fall -- and for all the jovial friendship on display for the cameras in the Rose Garden, some issues clearly rankled.
The meeting, which came up considerably short of the advertised three hours, ended without Canada getting an invitation to join negotiations for a new Trans-Pacific Partnership.
The TPP is a proposed tariff-free zone that would include more than 500 million consumers from nine countries, including Australia, Malaysia, Vietnam, Singapore and Chile.
But Canada's system of supply-management of eggs, milk and other farm products is seen as a stumbling block to participation in the new free-trade zone.
In scripted remarks, Harper emerged from the meeting to say he was "especially pleased" Obama had welcomed Canada's interest in the trade talks.
But he later pointed the finger squarely at the White House for holding up Canada's formal inclusion.
"Our strong sense is that most of the members of the Trans-Pacific Partnership would like to see Canada join," Harper told an audience at the Woodrow Wilson Center. "I think there's some debate, particularly within the (Obama) administration, about the merits of that."
For his part, Obama did not duck a question that specifically asked if Canada's dairy and egg marketing boards would have to go in order for Canada to join the party.
"Every country that's participating is going to have to make some modification," Obama said, flanked by Harper and Calderón at a news conference in the Rose Garden.
"That's inherent in the process because each of our countries has their own idiosyncrasies, certain industries that in the past have been protected."
The prime minister did not answer a direct question on whether he was prepared to abandon the marketing boards, but said his government would do what is needed to protect industries.
"Canada will attempt to promote and to defend Canada's interests, not just across the economy but in individual sectors as well," said Harper.
He was rather more blunt-spoken barely two hours later a few blocks away at the Wilson Center.
In response to the moderator's question about the prospect of North American energy self-sufficiency, Harper said that's not Canada's goal.
Explicitly framing his response in light of Obama's refusal to green-light the Keystone XL Pipeline that would carry Alberta crude to Gulf Coast refineries, Harper cited "the necessity of diversifying our energy export markets."
"We cannot be, as a country, where really our one and in many cases almost only partner could say no to our energy products. We just cannot be in that kind of position."
It wasn't the only frank talk of the afternoon.
Calderón stressed the need for the United States and Canada to take responsibility for the drug trade that has turned Mexico's northern border into a war zone.
Wealthy drug consumers in Canada and the U.S. fuel the market, he said.
-- The Canadian Press