Canada wants free trade with the US, but spurns `star wars'

Trade, ``star wars,'' and Arctic sovereignty are the big issues in Canadian-United States relations this year. On the first issue, a special Canadian commission recently recommended scrapping tariffs and opening the borders to free trade between the two nations.

Trade issues have often been the major problem between Canada and the US, which is hardly surprising, as each is the other's No. 1 trading partner.

The proposal calls for easing into free trade over a 10-year period. The idea is politically popular, at least in Canada, where a recent opinion poll shows 80 percent of the population wants closer ties with the United States, compared to 60 percent just three years ago.

The Canadian government is expected this week to ask the US to begin talks on a free-trade agreement.

Canada seems to pick awkward moments for these overtures.

Just two weeks ago Prime Minister Brian Mulroney said no to Canadian participation in President Reagan's Strategic Defense Initiative (SDI, or ``star wars'').

``After careful and detailed consideration, the government of Canada has concluded that Canada's own policies and priorities do not warrant a government-to-government effort in support of SDI research,'' Mr. Mulroney said. However, Mulroney did say that Canadian companies were free to pick up any contracts related to SDI.

And last week, External Affairs Minister Joe Clark stood up in the House of Commons to give a stern lecture on Canadian claims to sovereignty in the Arctic.

His remarks followed last month's trip of the US Coast Guard icebreaker Polar Sea through the Northwest Passage. Canada claims these as internal waters; Washington sees the passage as an international strait.

The Canadian government claims all the Arctic islands and the ice-clogged straits and channels that run between them. Ottawa announced plans to beef up its profile in the north, including $500-million (Canadian) for construction of a new icebreaker to patrol the area, plans for Canadian naval operations in the eastern Arctic, and an increased number of military surveillance flights over the Arctic. There are also plans for talks between the two countries on military and commercial uses of the Arctic wat ers.

Mr. Clark's outburst came as the new US ambassador to Canada, Thomas Niles, was holding his first Ottawa news conference across the street.

Mr. Niles said the voyage of the Polar Sea ``was not designed to create an issue between the two governments.'' He conceded that ``experience would show that we didn't handle it very well.''

Niles also repeated the US view that Canada does not have sovereignty in the Northwest Passage.

The recommendation on free trade by the MacDonald Royal Commission, as it is known, was welcome news for the Mulroney government. The prime minister -- a former president of Iron Ore of Canada, an American-controlled company -- is no economic nationalist, and would welcome a free trade agreement with the US.

The trade recommendation came as a surprise to many since the the head of the 13-member commission, Donald MacDonald, is a former Liberal Cabinet minister who once fought against free trade.

Canadian trade with the US has grown dramatically over the past 30 years. In 1954 the US accounted for 60 percent of Canadian exports. By 1984 it was 76 percent.

In 1983 Canada exported C$66.3 billion worth of goods to the US, while importing C$54.1 billion of US goods.

The US, however, may not find Canada's free-trade proposal attractive. Washington was in favor of ``continentalism,'' or a common market, in the 1970s. It may not be now. Recently there have been a number of protectionist bills before the US Congress, many of them aimed at Canadian imports.

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