Bush Mends Fence With Canada

President Bush, seeking to mend relations with America's northern neighbor, said Tuesday that Canada will be eligible for a second round of U.S.-financed reconstruction contracts in Iraq.

In a breakfast meeting with new Canadian Prime Minister Paul Martin, Mr. Bush said he had told Martin of the shift in policy. Martin "understands the stakes" in rebuilding a free and peaceful Iraq, Mr. Bush said. He offered no details of what the contracts would be worth.

Martin is eager to patch up the cross-border relationship after his predecessor, Jean Chretien, abstained from the Iraq war, angering Mr. Bush.

"Canada and America have got special status … by virtue of the fact of a significant interchange on an hourly basis between our two countries," Mr. Bush said. "It's special because we share a long border."

The two met on the sidelines of the Summit of Americas in Monterrey, Mexico, where Mr. Bush was faced with grievances from a number of the United States' neighbors.

Sticking points include free trade, U.S. security moves in the war on terrorism and American aid.

Mr. Bush argued Monday that the best road to prosperity in the hemisphere is to remove trade restrictions, but Canada and several Latin American nations remain unconvinced.

"Over the long term, trade is the most certain path to lasting prosperity," Mr. Bush told other world leaders gathered at the summit. "Together we will ... lift all our nations, and show the world that free societies and free markets can deliver real benefits to our citizens."

Martin has said developing countries cannot immediately compete in the cutthroat global economy.

The United States also faced opposition to its insistence on setting a 2005 deadline for the Free Trade Area of the Americas - a hemisphere-wide trade zone - in the summit's final declaration.

Venezuelan President Hugo Chavez, who opposes the accord, has pushed instead for a humanitarian fund that could be used to help countries during financial and natural disasters.

Peruvian President Alejandro Toledo criticized U.S. officials for refusing to lower agricultural subsidies while asking poor nations "to play ball in the free trade court." Paraguay's president, Nicanor Duarte, called for "Americas for all people, not for a few."

Chilean President Ricardo Lagos said: "This isn't the poorest continent, but it is perhaps one of the most unfair."

Mr. Bush on Monday referred to another controversial U.S. initiative when he urged countries to ban all corrupt officials from crossing their borders. The United States has asked other leaders to agree to a proposal that would ban corrupt nations from the OAS.

The president also took aim at Chavez, who recently accused the United States of "sticking its nose" into his country's affairs when Washington urged that he allow a referendum on his recall from office to proceed.

Although they still have broad disagreements, leaders at the 34-nation Summit of the Americas are working hard to demonstrate that relations are improving, pledging to strengthen democracy and fight terrorism in the region.

The most visible example of that diplomatic outreach came when Mr. Bush invited Mexican President Vicente Fox to visit his Texas ranch. The two have had a tense relationship, with Fox angry that Mr. Bush has not done more to reform immigration policies.

Fox accepted and praised Mr. Bush's new immigration proposal, which would allow some foreign workers to live temporarily in the United States.

On Tuesday, Martin said he was pleased by the new U.S. stance toward Canada, and the lucrative contracts that could come Canada's way. U.S. policy in the first round was to shut out Canada and other countries that opposed the war.

"It does show that working together, we can arrive at a reasonable solution," Martin told reporters after the breakfast.

The two leaders also pledged cooperation on another issue that has irritated U.S.-Canada relations, the discovery of mad cow disease in America from a cow that apparently came from Canada.

"This is an issue that's going to require close coordination between our two countries," Mr. Bush said. "The best way to make sure we're able to satisfy consumers … is for there to be (coordination) on regulation, on information and on the science."

Mr. Bush said he was confident in the safety of the beef supply, and was still himself eating beef.

Mr. Bush took a firm stance on border security, an issue that has irritated many American neighbors, including Mexico and Canada.

"We will do everything we can do to protect our country from attack," Mr. Bush said. But he pledged to "work closely with the Martin government on passport issues."