Prime Minister Stephen Harper and U.S. President Barack Obama said that their two countries will work together to ensure better trade, security and economic flow across the shared border.

"We've had a very successful day," said Obama during a joint press conference with Harper in Washington on Friday afternoon. The comments came after a meeting between the two leaders which centered on North American security and the Egyptian crisis.

"We've agreed to several important steps to increase trade," said Obama. "It's also about finding new ways to improve the free flow of goods and people."

Obama, who said that the U.S. and Canada are "woven together" unlike any other two countries, also pledged to get rid of outdated regulations which hinder goods and services which must cross the border.

It's believed a new border plan would include joint inspection agencies, placing U.S. food inspectors inside Canadian production plants and vice versa, the harmonization of regulations on food and manufactured goods and greater sharing of intelligence.

Critics have said that Canadian autonomy could be compromised by sweeping security changes.

Obama said that while there may be some slight differences in security approaches, he said that Canada and the U.S. are essentially on the same page.

"We have this border that benefits when it is open," he said. "The goal here is to make sure that we are coordinating closely."

Reports suggested that the meeting between the two leaders had to be postponed as Ottawa felt that Canadian travellers entering the U.S. were being questioned too much.

Some business leaders applauded the announcement.

"This is monumental for us . . . we really welcome this opportunity," Mark Nantais of the Canadian Vehicle Manufacturers Association said.

Harper and Obama want the plan completed within the year, said CTV's Ottawa Bureau Chief Robert Fife.

"The American economy, struggling as it is, and given the fact we're their largest trading partner, both countries realize we've got to make our borders smoother for the flow of goods and people but at the same time make sure proper security measures are in place," Fife said from Washington.

CTV reported Thursday that the deal would also include co-operation on building rail-links and bridges, and using biometrics to track travellers.

The meeting between Harper and Obama had been postponed twice, reportedly after Ottawa became concerned over how such a deal would impact Canadian sovereignty.

Law enforcement agencies on both sides of the border already share information informally. But talk of a formal agreement on the matter has led to fears about protecting Canadian independence.

However, any decision on the treaty may have to wait until after a Canadian federal election.

Liberal Leader Michael Ignatieff has painted the issue as a "stealth deal" in the works because the Conservative government has held the preliminary talks behind closed doors without indicating what a potential deal would encompass.

Security expert Alan Bell said the two countries have the longest unprotected border in the world, and much of it is represented by little more than a line on a map.

"The American government needs to do something, the Canadian government needs to do something, so you'll have the prime minister and the president getting together and instructing their bureaucrats to come up with a plan," he said.

However, Bell was less than optimistic about the one-year timeline, saying it will likely be two years before any changes take effect, noting that the two countries have "very different approaches" to border security.

On Tuesday, U.S. Sen. Joe Lieberman, chair of the Senate Homeland Security committee, released a report by the Government Accountability Office that slammed border security levels between Canada and the U.S. as unacceptable.

Lieberman called for a discussion between the two countries on whether Canadians should be required to carry visas when crossing into the U.S.