The new U.S. president was cheered by crowds in the snowy Canadian capital and responded by declaring "I love this country" at a news conference. On his way out of town, he stopped at a downtown market, where he delighted onlookers by shopping for gifts for his family.
With $1.5 billion in goods crossing the border each day, Canada is by far America's largest trading partner - the leading export market for 36 of the 50 states, reports CBS News White House correspondent Chip Reid. In recent years, trade between the two nations exploded, due in large part to NAFTA. But last year, candidate Obama suggested the possibility of pull out of the agreement.
That was a popular position in battleground states with high unemployment, but it caused an uproar in Canada, where millions of jobs depend on U.S. Trade. Today, as president, though, Mr. Obama spoke the language of free trade, Reid reports.
He said he still wants to modify NAFTA to protect workers and the environment, but only in a way that doesn't disrupt Canadian relations.
Noting that NAFTA has side agreements on labor and the environment, he added, "If those side agreements mean anything, then they might as well be incorporated into the main body of the agreements so that they can be effectively enforced." He said he hopes there eventually will be a way to do so "that is not disruptive to the extraordinarily important trade relationships" between the U.S. and Canada.
Both leaders said that as economies around the world face crises, it's important for the U.S. and others to resist calls for protectionism. Mr. Obama made his sharpest criticisms of NAFTA last year while campaigning for the Democratic nomination in hard-hit industrial states where many people blame the trade deal for robbing the United States of manufacturing jobs.
As for Afghanistan, Canada plans to pull its 2,500 combat troops from the volatile south in 2011, following the loss of more than 100 troops killed in the country since 2001. Mr. Obama is headed the other direction, dispatching 17,000 more U.S. troops to the war zone.
Mr. Obama said Thursday he did not press Harper to reconsider. Instead, he said he praised Canada for its sacrifices and for making Afghanistan its largest recipient of foreign aid.
Both the U.S. and Canada have urged other NATO countries to contribute more to stabilize Afghanistan, where insurgents have gained new strength and the top U.S commander is warning of a "tough year." But Canada's people say they have shouldered their burden long enough.
Mr. Obama declined to say how long U.S. troops might be committed to fighting in Afghanistan. The answer will depend largely on the outcome of his administration's 60-day review of the situation, he said. He said he ordered the additional 17,000 troops "because I felt it was necessary to stabilize the situation there in advance of the elections that are coming up."
Harper and Mr. Obama also announced an agreement to begin a clean-energy dialogue. Obama said it will "advance carbon-reduction technologies," which could slow global warming. He said it also will "support the development of an electric grid that can help deliver the clean and renewable energy of the future to homes and businesses" in both countries.
Harper said he was pleased that Canada now has a North American partner to help provide leadership on climate change.
Canada has been the first or second foreign destination of every U.S. president since Ronald Reagan, notes CBS News White House correspondent Mark Knoller.
Turning to border security and fighting terrorism, Harper said any threat to the United States is a threat to his country, too.
The prime minister said Canada has made "significant investments" in security and in border protection since the Sept. 11, 2001, terrorist attacks.
But he said there's a "real challenge" in increasing border security in a way that doesn't limit commerce and social interaction.
Harper, alternating between English and French, said Mr. Obama's election "launches a new chapter in the rich history of Canada-U.S. relations."
Mr. Obama returned the warm words, saying he has top aides and a brother-in-law from Canada. "I love this country and think that we could not have a better friend and ally," he said.
Mr. Obama said he believes the ties between Canada and the United States will grow even stronger over the next four years. The men took questions from two Canadian reporters and two U.S. reporters in a room adorned with numerous flags of the two nations.
Harper said he and Mr. Obama agreed that their nations must work closely "to counter the global economic recession by implementing mutually beneficial stimulus measures and by supporting efforts to strengthen the international financial system." He said strategies would include lowering taxes, "ensuring access to credit and unleashing spending that sustains and stimulates economic activity."