President Bush will try to ease tensions over trade and immigration at a summit Wednesday with the leaders of Canada and Mexico that is expected to focus on strengthening security and economic ties.
The meeting with Canadian Prime Minister Paul Martin and Mexican President Vicente Fox is expected to produce a plan for improving North American economic competitiveness in a global environment seeing the rise of China and India and the expansion of the European Union, analysts said.
The United States is pressing for stronger security measures, Mexico is seeking a promise on immigration issues and Canada is hoping for movement to ease U.S. trade restrictions, analysts said.
Canada hopes the talks will produce agreement on the need to overhaul the North American Free Trade Agreement to better handle issues such as its trade dispute with the United States over duties on Canada's multibillion-dollar lumber exports.
Washington says the duties are needed to offset artificially low prices set by Canadian lumber exporters. Canada denies there is any dumping.
Another sore spot was Canada's decision earlier this year not to participate in the U.S. missile defense system, which was seen as a snub to Bush who had called for joint action.
"They are going to lay out a plan of action that leads Canada, Mexico and the United States toward deeper integration," said Armand Peschard-Sverdrup, director of the Mexico Project at the Center for Strategic and International Studies.
"This North American initiative is the beginning of redefining the relationship between our three countries," he said.
The leaders will probably announce an agreement to take steps to broaden their relationship beyond the limited focus of NAFTA, analysts said.
"I think we need a new game plan for what we want to do with the NAFTA partnership in the post 9/11 world," said Chappell Lawson, director of a Council on Foreign Relations task force on the future of North America.
A preliminary report by the leaders of that task force, who are former U.S., Mexican and Canadian officials, last week recommended building a North American economic and security community by 2010, and proposed a common external tariff and an outer security perimeter.
But the idea of deeper continental integration is a sensitive topic in Canada, which, unlike the United States, generally leans to the left. Government officials were quick to distance themselves from the task force's conclusions.
"Frankly the overall architecture proposed by the ... task force, some sort of Big Bang, is not what's being discussed," one Martin aide told reporters, saying Canada wanted to talk about more practical matters such as eliminating minor tariffs and cutting business regulations.
Frayed relations
The summit will also symbolize the importance of U.S. ties with its neighbors after a first term in which Bush was focused on the aftermath of the Sept. 11, 2001, attacks and the U.S.-led invasion of Iraq, analysts said.
The start of Bush's second term has been marked by a new style of foreign policy -- "a lot of overtures, a lot of willingness to branch out to allies," said Andre Belelieu, director of the Canada Project at the Center for Strategic and International Studies. "They have a stake in making sure this summit goes well."
U.S.-Mexico relations were frayed by Mexico's opposition to the Iraq war, and soured in recent months after U.S. criticism that Mexican security forces were failing to control crime in the border area.
But movement on two key issues -- easing restrictions for some illegal workers and lifting some trade barriers for Canada -- is largely out of Bush's hands, analysts said.
Bush's proposal for a temporary guest worker program that would allow millions of illegal immigrants, mostly Mexicans, to win legal status for three years if they had jobs has so far met strong opposition in Congress.
Both Bush and Martin support resumption of beef and cattle trade that has been disrupted since Canada found its first domestic case of mad cow disease. But the issue is before U.S. federal courts.