TRADE TALK - LEO RYAN NAFTA CHALLENGES CLINTON-CHRETIEN TRADE CONNECTION

TRADE TALK - LEO RYAN NAFTA CHALLENGES CLINTON-CHRETIEN TRADE CONNECTION

President Clinton might want to bone up on his knowledge of hockey, Canada's national sport, when he meets newly installed Canadian Prime Minister Jean Chretien for the first time to discuss trade and other issues.

This get-together will take place during the Nov. 19-20 Asia-Pacific summit in Seattle.It will come at a crucial time, just days after a critical vote in Congress on the U.S. implementation package for the North American Free Trade Agreement.

At his first news conference in Ottawa after assuming office Nov. 4, Mr. Chretien used a hockey analogy, to the delight and puzzlement of the assembled scribes, to explain why he was hanging tough on his election pledge to negotiate improvements to the Nafta.

The trilateral deal was passed in Canada's federal Parliament in June by the previous Conservative government.

Mr. Chretien reiterated that the new Liberal government would not proceed with Nafta implementation on Jan. 1 until clearer definitions are obtained of dumping and unfair subsidies.

In his view, some U.S. industries have taken unfair advantage of ambiguities in the 1988 U.S.-Canada free trade accord to harass Canadian exporters.

CHRETIEN COMPARES TRADE, HOCKEY

Mr. Chretien compared such trade remedy actions to a hockey game in which the opposing team tries to slip an extra four players onto the ice. In hockey, only six players can play at the same time.

Continuing this line of thought, Mr. Chretien said the U.S. team might be bigger, but Canadians could skate faster - as long as the rules are fair.

"But we will never permit them to have 10 men on the ice," deadpanned the prime minister.

This was vintage stuff from a veteran French Canadian politician who loves to use humor and symbolism to make a point.

When Mr. Chretien meets with Mr. Clinton, some analysts consider he could very well argue that since the U.S. president got his way with Nafta side deals on labor and the environment without reopening the whole pact, it would not be unreasonable for certain important concerns of a new Canadian administration to be addressed.

HE WILL LOOK FOR A CARROT

Thus, Mr. Chretien will be looking for a carrot from Mr. Clinton, whether or not Nafta scrapes through Congress and especially if multilateral trade talks in Geneva collapse in mid-December.

An acceptable carrot for Mr. Chretien could take the form of a working party of officials from the United States, Canada and Mexico starting talks in 1994 to develop North American subsidy and anti-dumping codes.

Should, however, the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) succeed, its general provisions for a global subsidies code should satisfy most Canadian concerns.

This all relates to the "unfinished business" of the 1988 U.S.-Canada Free Trade Agreement, which provided for negotiating a common definition of subsidies and dumping within seven years. Such negotiations have never gotten off the ground, pending the outcome of the prolonged Uruguay Round.

LIBERALS ARE FREE-TRADE CONVERTS

Important to note, meanwhile, is that Canada's Liberal Party has gone full circle since fighting free trade in the 1988 election.

And the moderate right wing's dominance of the first Chretien Cabinet suggests that Canada will find a way to proclaim Nafta in effect if it is passed by Congress.

Roy MacLaren, the minister of international trade, is a staunch free trader. As the Liberal trade critic in recent years, he stressed the improvement and broadening of Canada's trade relationships.

Formerly with Canada's foreign service in postings such as Geneva and the United Nations, Mr. MacLaren worked for several corporations before beginning a political career in 1979.

Other committed free traders in key portfolios are Paul Martin (finance), Andre Ouellet (foreign affairs) and John Manley (industry). Previously outspoken Liberal opponents of free trade, such as Lloyd Axeworthy, were given less high-profile posts in the first Chretien Cabinet.