A bipartisan majority of the Senate Finance Committee urged President Reagan yesterday to withdraw his proposal for a free-trade pact with Canada, saying they could not support it now because of the White House's refusal to push for a broad trade bill and nagging trade frictions with Canada.
The letter appeared to kill a presidential trade initiative designed to cement tighter relations with Canada and a strategy to use the threat of individual trade agreements to push Third World nations to agree to a global round of trade talks.
The White House continued to seek the needed votes, however. Finance Committee Chairman Bob Packwood (R-Ore.), saying he was acting at the request of the president, postponed today's vote on the proposal until Tuesday. That is one day before the statutory deadline for committee action to block the plan.
Administration trade officials conceded they faced an uphill battle, but U.S. Trade Representative Clayton Yeutter considered canceling or cutting short a trip to Europe that includes critical talks on a major trade dispute between the United States and Western Europe.
"The administration will insist on a vote at its peril," said an aide to a Democratic member of the Finance Committee.
Opposition to the Canadian trade agreement boiled over Friday as Yeutter was testifying before the committee. At that hearing, 14 of the committee's 20 members, including Packwood, surprised Yeutter and the Canadians when they voiced opposition to the plan.
That verbal attack appeared to be hardened yesterday in a letter circulated among Finance Committee members by Sens. John C. Danforth (R-Mo.), chairman of the trade subcommittee, and Russell Long (D-La.), and signed by 10 other members of the committee, including Majority Leader Robert Dole (R-Kan.). Packwood did not sign the letter, in line with a policy he generally follows as chairman.
"While the delay in consideration of your request need not impede ongoing trade talks with Canada or preclude a resubmission at a later date, we need assurances that several important concerns expressed by senators at last week's hearing on U.S.-Canada trade are addressed," the senators wrote Reagan.
"In particular, we seek your administration's active participation in a cooperative effort to enact a reasoned comprehensive trade bill during this session of Congress, along with evidence that key outstanding trade problems with Canada will be resolved," the letter said.
Both issues are tough ones for the administration to yield on, although there are indications that the White House is seeking support from lumber-state senators who oppose the pact unless industry complaints of subsidized Canadian timber are redressed.
Surging lumber imports have become the largest trade irritant with Canada, although other members of the committee have a series of complaints about a variety of goods.
Canadian Prime Minister Brian Mulroney, who advanced the idea of a free-trade agreement during the 1985 "shamrock summit" with President Reagan, vowed that he would not go ahead with the talks if the Senate attaches preconditions to them. He has been forced into a tough stance by growing opposition in Canada to the agreement.
The administration, moreover, decided against working with Congress this year on a comprehensive trade bill out of concern that it would result in a strongly protectionist piece of legislation.
Danforth called administration help in developing trade legislation "the first order of business."
"The irony is that the committee is not angry with Canada, but rather at the administration, which refuses to enforce U.S. trade laws," added Sen. George Mitchell (D-Maine). "If the administration interprets this action as a slap in the face to them, maybe we are finally getting the message across."