Canadian Prime Minister Brian Mulroney today announced his government's decision to enter bilateral trade negotiations with the United States seeking the "broadest possible package of mutually beneficial reductions in tariff and nontariff barriers between the two countries."
Mulroney, addressing the House of Commons in Ottawa in a nationally televised speech, said he had personally informed President Reagan today of the long-awaited decision and had asked that Reagan explore whether Congress was interested in the administration pursuing such a pact.
Clearly seeking to deflect Canadian concerns about being overwhelmed in any new closer economic relationship with the United States, Mulroney warned his countrymen that a new trade agreement would be the best way of warding off the "numerous and insidious and insensitive" protectionist bills now pending in Congress.
"We need a better, a fairer and a more predictable trade relationship with the United States," the prime minister said in a speech that moved easily back and forth from English to French, as is customary for him when addressing Canada's two founding cultures. "At stake are more than 2 million jobs which depend directly on Canadian access to the U.S. market."
Canadian exports of hogs, fish, lumber and steel are the target of some of the protectionist bills in Congress. Canada also would be seriously affected by a proposal of the congressional Democratic leadership to impose a surcharge on imports from countries with a large trade surplus with the United States.
The U.S.-Canadian trading relationship is the largest in the world. Last year, the two-way trade totaled more than $120 billion, with Canada enjoying a surplus of roughly $16 billion on a balance-of-payments basis, largely a result of increases in auto exports to the United States by Canadian subsidiaries of American automobile companies, according to Canadian and U.S. trade analysts. Under existing multilateral trade agreements, roughly 80 percent of Canadian exports to the United States are duty free, as are about 60 percent of American goods exported to Canada.
The principal tariff barriers erected by the Canadians have been imposed largely to protect Canada's fledgling furniture, textile and consumer-goods manufacturers.
Aides said Mulroney was deliberately broad and general about Canadian negotiating goals. He also did not detail arrangements for the discussions, but said progress would be reviewed when he meets with President Reagan next year.
"Success is not a sure thing," Mulroney said about the prospects for reaching an agreement. Among the hazards are the intense protectionist pressures in Congress and the equally intense emotional feelings the issue has aroused here since Reagan and Mulroney first talked about the possibility for such negotiations during Reagan's visit to Canada last March.
Although lumber and natural gas interests in western Canada and the fishing provinces in the east are among a majority of Canadians currently favorable to the idea of lowering trade barriers, major unions and industrial concerns in Central Canada have been strongly opposed to the idea. The Toronto Star, Canada's largest-circulation newspaper, provides a daily drumbeat against any closer ties with the United States.
The opposition goes beyond economic concerns and straight to the question of whether a trade pact would be the first step toward ultimate cultural and political absorption of Canada into the United States, as critics like the Toronto Star allege. That concern has rumbled throughout Canadian politics since the beginning of this century.
"No Truck or Trade with the Yankees" was the campaign slogan in 1911 of the opposition party that brought down a government that had begun trade negotiations with the United States.
Mulroney went to considerable effort in his address to try to overcome such concerns. "To shrink from this challenge and opportunity would be an act of timidity unworthy of Canada," he said of the talks.
"It would be contrary to our national interests, our political sovereignty, our commitment to fight regional disparities. Our unique cultural identity, our special linguistic character -- these are the essence of Canada. They are not an issue in these negotiations."
Opposition leaders, however, question whether Mulroney would be capable of holding his own in what is certain to be tough bargaining. They taunted the prime minister about his claims of having a "special relationship" with Reagan, noting, among other things, that Canada was neither included nor informed in advance of the meeting last weekend of major industrial countries to take action on the dollar.