Talks aimed at negotiating a free-trade agreement between the United States and Canada opened here yesterday under a news blackout and the cloud of restrictions on Canadian lumber sales in this country.
These restrictions, including the establishment of tariffs on imports of Canadian cedar shakes and shingles and the acceptance of a complaint by U.S. lumber producers of unfair trade practices by Canada, triggered a firestorm of anger north of the border that led to questioning the value of a free-trade pact.
Nonetheless, U.S. Trade Representative Clayton Yeutter yesterday called the talks "a historic opportunity to open markets, expand trade and create jobs," and praised "the enthusiastic endorsement" of the negotiations given by Prime Minister Brian Mulroney Monday.
"However, as President Reagan and Prime Minister Mulroney have agreed, all issues should be on the negotiating table and it should be left to the negotiators . . . how to best address them," Yeutter said.
In Ottawa, however, Mulroney continued to back away from his original proposal to seek a comprehensive free-trade agreement, saying instead Canada wanted liberalized trade. Mulroney cited the 1965 auto pact between Canada and the United States, which set minimum Canadian content and production levels, as the kind of liberalized trade "we are working toward."
Monday, Mulroney said there would be no deal between the world's largest trading partners unless it meant jobs and greater prosperity for Canada, and Canadian trade negotiators said there was a "significant" risk of failure that would have major economic implications there.
The Canadian team was led by veteran negotiator Simon Reisman, and Peter Murphy headed the U.S. negotiators. They will meet again today, and two more sessions will be held over the summer.
Canadian officials said they would "take stock" in September to determine if an agreement was possible and then would proceed with more intense negotiations.
Canada and the United States are the world's largest trading partners, with $123 billion last year in cross-border trade. Between 20 and 30 percent of the trade is subject to tariffs of 3 percent to 8 percent, with others ranging as high as 30 percent.
American protectionists have cited the United States' $23 billion merchandise trade deficit with Canada last year. The Canadians, however, complain that this ignores the United States' $9.8 billion surplus in services provided to Canada.