Canadian Prime Minister Brian Mulroney, flu-plagued but triumphant, received his congratulations graciously.

"You should be very proud," beamed a guest at the Canadian Embassy last night, referring to President Reagan's endorsement of a joint U.S.-Canadian report on acid rain.

"It won't satisfy everyone, that's obvious," Mulroney said at the party he hosted for Vice President George Bush. "But I'm pleased. I'm pleased."

Earlier in the day, Reagan agreed for the first time that man-made pollution causes acid rain, and pledged support for a five-year, $5 billion U.S. program to develop technologies to combat acid rain, the cost of which will be split between government and industry.

"It's been a wonderful visit," said Canadian Ambassador Allan Gotlieb. Mulroney had previously designated acid rain his prime concern in U.S.-Canadian relations and has made use of both lobbyists and his friendship with the president to press his case. "We were hopeful," Gotlieb said of Reagan's endorsement of the study's conclusions, "but we were very pleasantly surprised, to understate it. Before Ronald Reagan made this decision, acid rain was like fish -- it was dead in the water."

A Canadian-American party is always something of a love fest, and when the aperitifs are preceded by a diplomatic agreement, and the prime minister calls the vice president by his first name, the mood can become as sweet as the fancy dessert.

"When people talk about the U.S in negative terms," Mulroney said in his remarks after dinner, "I always remember it's been 175 years since we have fired a shot at each other. That was in 1812, and the Irish started that one. In that battle, we captured Detroit."

The crowd of almost 200 laughed as Mulroney gave a strategic pause.

"And we gave it back," he continued, to further laughter. "Excuse me, Sen. Riegle," he added in reference to guest Donald Riegle (D-Mich.)

Continuing the theme in his response, Bush said, "We know of your generosity in giving Detroit back. We're a generous people, and we'd like to give Sen. Riegle back."

The guests were seated on a false floor under a tent. "It's a miracle," said Bush. "Sitting on top of the swimming pool. Who would have thought it possible?"

Several hours before the party was scheduled to start, hostess Sondra Gotlieb was a little worried about that tent.

"Somebody said there's a hurricane warning," she said. "There'll be high winds, so there'll be a lot of flapping. Hopefully the winds will die down. I have a vision of us flying in the air. There will be a very heavy man lying on top of the tent, an especially heavy man, to hold it down."

But there was no hurricane, and the hypothetical fat man was not needed. The only danger to guests' safety proved to be the bagpiper who, in accordance with Canadian custom, ushered everyone into dinner with an enthusiasm that made some wince.

It was a pure Washington crowd: politicians like Sen. Alan Simpson (R-Wyo.) and Treasury Secretary James Baker, and media types (accurately labeled "high media" by Allan Gotlieb) like Wall Street Journal bureau chief Al Hunt, Washington Post Co. Chairman Katharine Graham, ABC's Barbara Walters and Time magazine group Chairman John Meyers.

"You see, everyone has their insy-insy guest list for when a prime minister comes," said Sondra Gotlieb. "They all have some special purpose. Barbara Walters is a friend of mine. Time magazine has had Brian Mulroney on its cover. They're people who are interesting and who are interested in our problems."

One such guest was Rep. Sherwood Boehlert (R-N.Y.), who proudly displayed the "Stop Acid Rain" button affixed to his key chain.

"To paraphrase Neil Armstrong's words," he said of Reagan's acid rain decision, "this is one small step for a president, one giant step for the environment."

As he praised Canada, Bush referred to the current "big controversy regarding Central America" and thanked the Canadian government for its "disproportionate" support of Central American democracies. Earlier yesterday Mulroney had said that acid rain will remain on the political agenda "long after it is no longer trendy in Washington to talk about Nicaragua." The sentiment mattered so much to him that he repeated it later in the day, but at the dinner he made no mention of the ongoing debate over aid to the contras.

Simpson said he expected the aid would pass both House and Senate. "It'll be 'The President Rides Again.' "

Nearly everyone acknowledged that for Canadians there is some frustration over the amount of attention America pays to contras and others while Canada sits up there, not making any trouble and sometimes seemingly forgotten.

"I think there have to be reminders that there is a country to the north," said Canadian-born actor Christopher Plummer.

Or, as Allan Gotlieb told the guests, "This is the first official visit to Washington of your nearest neighbor, your most important neighbor, in nine years. There's no one who's as important to you as we are. You know that."

Enough said.