BAKER, YEUTTER TOUT US-CANADA TRADE PACT

BAKER, YEUTTER TOUT US-CANADA TRADE PACT

Treasury Secretary James A. Baker III and U.S. Trade Representative Clayton Yeutter sought lawmakers' support Thursday for the proposed U.S.-Canada free trade pact, saying an opportunity for another such agreement would not come again for many years.

Mr. Baker told the Senate Finance Committee that the proposed bilateral agreement should strengthen the world trading system and could be the catalyst for a new trade policy strategy. He said it also would dramatically reduce

barriers and establish rules of conduct for a broad range of economic activities.At least six committee members spoke out against various parts of the agreement, however. The senators said the agreement would hurt trade in such home-state products as fish, oil and gas, potatoes, wheat and coal.

Some senators also criticized the agreement as simply a way to cut tariffs rather than attack Canadian subsidies.

In a prepared statement, Mr. Baker said the Reagan administration would work with Congress to develop legislation to implement the agreement.

Mr. Yeutter said the agreement should spur increased economic activity, higher trade levels, more jobs and enhanced competitiveness for both countries.

He said that while some special interests will see themselves as being vulnerable to increased competition as a result of the accord, those groups should not lose sight of the overall interests of the United States.

The agreement will reduce but will not end trade frictions between the United States and Canada, Mr. Yeutter said. But he warned that failure to implement it would have serious repercussions for both countries.

Canada is the United States' biggest bilateral trading partner. The United States exported $59.8 billion worth of goods to Canada last year while importing $71.5 billion.

Mr. Yeutter said that if the agreement fails to pass, the United States and Canada would lose the economic gains they could have reaped and the United States would have lost some momentum at talks to revamp the General Agreement on Tariffs and Trade, the accord governing most worldwide commerce.

The administration plans to submit legislation in June to implement the free trade agreement, which Congress then would consider before its August recess.

In a related development, the Canadian Mortgage and Housing Corp. has agreed to reconsider its earlier refusal to overhaul building codes that have effectively barred U.S.-manufactured plywood from being used in Canada, Secretary Baker said Thursday.

Under questioning from Sen. Bob Packwood, R-Ore., Mr. Baker told the Senate Finance Committee he was informed of the CMHC decision by Canadian trade representatives late Wednesday.

A change in the Canadian plywood codes is a key part of the plywood provisions of the proposed U.S.-Canada free trade treaty. Northwest lawmakers were livid when the CMHC, a government-controlled mortgage authority, rejected any changes last week.

Obviously it was completely unjustified, Mr. Yeutter told the committee. They did not do what they were asked to do or agreed to do and their action was violative of the agreement.

Sen. Packwood and other lawmakers from Oregon and Washington said the initial rejection was not based on the technical review called for under the treaty and rather was just a simple review that concluded U.S. plywood didn't meet Canadian construction standards.