CANADIANS URGE DELAY IN ACCORD

CANADIANS URGE DELAY IN ACCORD

A Canadian opposition party task force will urge the government in Ottawa to hold off proposing legislation implementing the U.S.-Canada trade liberalization accord until the U.S. Congress acts on two key bills.

Four Liberal Party legislators said Thursday they will advise the Conservative government of Prime Minister Brian Mulroney to wait until the U.S. Congress deals with the omnibus trade bill and its own bilateral trade pact legislation.We think it's foolhardy for the Canadian Parliament to go and pass legislation until they see what's in the U.S. trade legislation and how it will impact Canada, said Lloyd Axworthy, member of Parliament from Winnipeg- Fort Garry, Manitoba, and the Liberal Party's top international trade official.

The Liberal Party is opposed to the U.S.-Canada accord on the grounds that it undermines Canadian sovereignty on a host of economic issues. The U.S.-Canadian pact was signed Jan. 2 by President Reagan and Prime Minister Brian Mulroney and is now being considered by the legislative bodies in both countries.

Senate Finance Committee Chairman Lloyd Bentsen, D-Texas, and House Ways and Means Committee Chairman Dan Rostenkowski, D-Ill., say their committees will deal with the omnibus trade bill before they move on to the Canadian legislation.

The Canadian legislators were in Washington this week to consult with congressional leaders on the U.S. legislative agenda for the two bills and to determine the likely final form of the measures.

The members of the task force worry that U.S. special interests will

pressure lawmakers into reneging on specific aspects of the pact. Congress has been inundated with complaints about the accord by industries ranging from steel and auto parts to textiles, uranium and dairy products.

The Liberal Party officials worry that such lobbying efforts will pressure Congress into granting protection for these industries beyond whatever is included in the agreement.

That's the reason we are going to recommend to our government that it not rush to present its legislation to our Parliament. We should know just how the agreement, as negotiated, will be modified by (U.S.) implementing legislation, said Herb Gray, member of Parliament from Windsor, Ontario.

The pending omnibus trade bill is of perhaps even greater concern to the Canadian officials because it would lead to an increase in trade frictions between the two countries.

Mr. Axworthy said that in his conversation with Sen. Bentsen, the Finance Committee chairman told him Canada would not be exempt from any omnibus trade legislation even if the trade liberalization accord is approved. But if Congress passes a bill that Ottawa finds offensive, Mr. Axworthy said, the chances of Parliament's ratifying the agreement would be substantially weakened.

Even those who support the present agreement would find it very difficult (to continuing supporting it) if the rules were changed and tougher measures were brought in, he said.

What especially disconcerts the Canadians is the omnibus trade bill's provision unilaterally changing the definition of subsidies and the provisions dealing with retaliation for unfair trade practices under Section 301 of the 1974 Trade Act.

The Canadians are afraid the proposed changes in the 301 portion of the trade bill will limit the discretion of the U.S. president in settling trade disputes.

If the United States arbitrarily defines subsidy in the omnibus bill, it goes a long waytoward destroying what was promised to Canadians in the Free Trade Accord. Canadians are not looking to change their view of certain programs targeted to help individuals, not industries, said Jack Austin, a member of the Canadian Senate.

Proponents of the accord, including Prime Minister Mulroney, maintain that the bilateral agreement would shield Canada from future U.S. protectionist legislation. But in light of the fact that a new U.S. trade law would pre-empt any pact, Mr. Axworthy considers this a moot point.

If the United States trade bill is going to contain a number of tough measures, the Canadian agreement would do nothing about that. It's useless in providing any protection for Canada. If it's a watered-down trade bill, then this agreement is not necessary. So it's either useless or not necessary, Mr. Axworthy charged.

The state of current U.S.-Canadian trade relations is such that Mr. Axworthy feels there is no need for a bilateral trade accord. He mentioned that 80 percent of the two-way trade moves tariff-free and that U.S. investment in Canada is already very large.

Rather than the bilateral approach, Mr. Axworthy said, the Liberals prefer to negotiate trade liberalization via the multilateral format of the General Agreement on Tariffs and Trade.

We believe we can get a better trade package without the heavy costs, through (the multilateral) method as opposed to the bilateral deal, he said.