Bush: Canada Can Bid on Iraq Reconstruction

MONTERREY, Mexico – President Bush, working to smooth relations with allies who opposed the Iraq war, reversed course Tuesday and said Canada could bid for lucrative Iraqi reconstruction projects.

Three or four other countries also will be eligible, Defense Secretary Donald H. Rumsfeld said, but he declined to identify them. France, Germany and Russia have been furious that Bush excluded them from postwar contracts because they opposed the U.S.-led invasion that toppled Saddam Hussein (search).

In Paris, French officials said they were unaware of any policy change on contracts.

Bush announced his change of heart about Canada in his first meeting with the country's new Prime Minister, Paul Martin (search). "It actually does show that, working together, you can arrive at a reasonable solution," Martin said at a picture-taking session with Bush. U.S. officials said Canada would be eligible to bid on roughly $4.5 billion in reconstruction projects.

Later, White House press secretary Scott McClellan said any country that, like Canada, had been excluded because of opposition to the Iraq war could now qualify if it had made a pledge toward Iraq's reconstruction at a donors' conference in Madrid, Spain, in October.

Bush cited Canada's pledge of $225 million toward Iraq's reconstruction -- one of the largest at the conference -- and its expressions of support for the U.S.-led political efforts in Iraq as the reason it won a spot on the contracting list.

McClellan also held out the possibility for other nations, perhaps such as those that have agreed to forgive some of Iraq's massive foreign debt. That category would include France, Germany and Russia, none of which made contributions in Madrid.

It was Bush's second fence-mending session at the Summit of the Americas, a gathering of 34 leaders from throughout the hemisphere. On Monday, Bush and Mexican President Vicente Fox (search) put aside two years of differences and rallied behind a new U.S. proposal to grant legal status to millions of undocumented workers.

U.S. relations with Canada were strained when Martin's predecessor, Jean Chretien, stood with France, Germany and Russia in refusing to join the United States in the war on Iraq because they said the invasion lacked U.N. authorization.

Martin served as Chretien's finance minister for nine years, and backed Chretien's decision to abstain from the fighting in Iraq.

Bush, asked whether the change in leadership could thaw U.S.-Canada relations, said: "That assumes there was a freeze. And I didn't feel there was."

Yet events since Bush took office in 2001 had sent the relationship into a deep chill.

Deeply angered by the Canadian stance on the Iraq war, Bush canceled a trip to Ottawa planned for last May.

Relations had begun deteriorating earlier, when a U.S. bombing accident in Afghanistan in 2002 killed four of Canada's soldiers and injured eight more.

And the two governments have squabbled over trade issues, ranging from U.S. tariffs on lumber imports from Canada to U.S. restrictions on Canadian meat products because of a lone case of mad cow disease.

The beef issue flared anew last month with discovery of the disease in Washington state in a cow that came from Alberta.

Bush and Martin pledged to cooperate in tackling the issue.

"This is a North American industry, and the solutions are science-based, and those science-based solutions are going to be arrived at between the two of us," Martin said.

On another topic, Secretary of State Colin Powell said in a letter to Canadian Foreign Affairs Minister Bill Graham that the United States would notify Canadian consular officials of any intention to deport a Canadian citizen to a third country. Martin called the step unprecedented.

Gordon Giffin, the U.S. ambassador to Canada from 1997 until May 2001, called the Iraq-contracts announcement "an enormous positive step forward."

"It's a demonstration by the administration that they're interested in rejuvenating the historic close working relationship with Canada," he said.

Last month, after Congress approved $18.6 billion in Iraq reconstruction money, Bush said he would limit eligibility to countries that had helped militarily or had made other major contributions as "coalition partners."

Yet administration officials suggested the policy was not as black-and-white as Bush indicated, and in recent days they have unveiled a multi-staged decision process that would allow for bringing other countries into the bidding.