MONTREAL - The top U.S. diplomat in Canada is warning that legislative gridlock in Washington in the wake of the midterm elections could have major repercussions north of the border.

Ambassador David Jacobson said Tuesday that the U.S. political process could be bogged down over the next two years with the Republicans now holding the majority in Congress, and no other country would feel it more than Canada, its closest trading partner.

"If the government of the United States can't address our economic issues, then our economy is not going to do as well as it otherwise would," Jacobson said after delivering a speech at McGill University.

"If we don't do well, then I think that hurts Canada."

Earlier this month, the Democrats lost their once-commanding lead in the House of Representatives and are now the minority party in that chamber. They managed, just barely, to retain control of the Senate.

The new dynamic, with a liberal president, a conservative House, and a mixed bag in the Senate, could hold economic and political implications for Canada.

But Jacobson told the audience that Canadians could also benefit from the more-robust Republican presence in Congress.

For one, he predicted that Canadians will likely face fewer protectionist measures, such as the Buy America bill.

"You're likely to have a little bit less of that and that's good," said Jacobson, a friend of Barack Obama, who like the U.S. president, hails from Chicago.

"The president of the United States believes in free trade.

"It's good for the United States and it happens to be good for Canada."

With Republicans in control of Congress, Canada's oil industry is also less likely to face sanctions for its high pollution levels, as threatened by some U.S. lawmakers.

And talk of a continental climate change treaty also appears to have been extinguished in the face of a more skeptical Congress.

In Ottawa, the Conservative government has spent years saying it would only sign onto a cap-and-trade plan if the U.S. did, too -- and any chance of that happening appears to have evaporated for now.

Jacobson also applauded Canada for its commitment to stay in Afghanistan for another three years.

"That's welcome news," he said during a question-and-answer period after his speech.

"It's a tough fight in Afghanistan ... the NATO coalition needs as much support as it can get."

Prime Minister Stephen Harper told Parliament on Tuesday that Canada's combat mission will end next year as scheduled, but the country will keep up to 950 soldiers and support staff in Afghanistan on a training mission until March 2014.

Jacobson said the mission in Afghanistan is changing from combat for the coalition forces to combat by the Afghans.

"I think that Canada's role is changing along with the change in the mission," he said.

"It is a good time to reflect on what Canadians have done over the last 10 years. Of the service and of the sacrifice that Canadian men and women have made over there. And I think that it's something that Canadians should be justifiably proud of."