Editorial Free trade deal runs treacherous waters

Evidently believing he sees the writing on the wall, federal Liberal leader John Turner calls on the Canadian government under Prime Minister Brian Mulroney to quit the free trade talks with the U.S., and give it all up as a bad job.

Mr Mulroney, on the other hand insists he is totally committed to continuation of the talks, and to the achievement of a free trade agreement itself, even though the U.S. has now raised what looks like a fairly formidable obstacle to their success.

Powerful people in the U.S. Senate, (a body already believed to harbor strong protectionist sentiments) have flatly rejected a key element in Canada’s free trade scenario, namely a binding system or tribunal for settling trade disputes between the two countries, with the proviso that the dispute mechanism would exempt this country from trade remedy laws in the U.S.

One of the senators, Republican John Danforth of Missouri, didn’t mince words about it. “Just totally unacceptable,” he said, denouncing such a tribunal on the general grounds that the U.S. would find it impossible to treat Canada differently from any other nation, under U.S. trade laws which allow Washington to impose punitive duties on any country considered to be inv olved in unfair trade practices.

The U.S. Congress, too, seems likely to put up massive road blocks to any kind of free trade deal on similar grounds, even if Mr Mulroney does succeed in his quest for an arrangement with the Reagan administration. The horrendous size of the U.S. trade deficit, expected to reach close to $200 billion this year, makes it easy to understand, of course, why U.S. industries are stalking the halls in Washington in search of protectionist legislation.

With only about three months to go before making a deal, as Mr Mulroney hopes, the prospects are not looking good. That’s bad news for the mining industry in Canada which, as we’ve pointed out many times before, has a lot at stake in the outcome, and in the successful conclusion of a free trade agreement. Mr Mulroney and trade negotiator Simon Reisman are going to need all their skills to pull it off.