US-Canada pact yields more than free trade for Mulroney

President Reagan was at his ranch in California. Canadian Prime Minister Brian Mulroney sat in his office on Parliament Hill in Ottawa. The two spoke briefly on the phone. They signed a pact to create free trade between their two nations. The ceremony, Saturday morning, made history. Canada and the United States have occasionally considered such a trading arrangement in the last century. Each time, politics and fear have killed action.

Now the leaders have signed a deal that, if approved by Congress and Parliament, will govern and expand the world's largest flow of trade and investment.

For Mr. Mulroney, the agreement has an additional bonus. It has boosted the political prospects of his Progressive Conservative government.

Indeed, Bruce Phillips, the prime minister's director of communications, says the Conservatives are now ``in a winning position'' should the government call a national election.

His view is based on an analysis of the latest public opinion polls, including one published last week by the Toronto Globe and Mail - Environics Research Group Ltd. It shows the Conservatives with 32 percent support of decided voters, ahead of the left-of-center New Democratic Party (NDP), which received 30 percent. The Liberal Party headed the poll with 37 percent. (Undecided voters accounted for 18 percent.)

That is a dramatic shift from October when the NDP topped another Environics poll with 38 percent, followed by the Liberals (35 percent) and the Conservatives (24 percent).

Mr. Phillips' optimism is based partially on the regional cast of the December poll. It showed the Conservatives, he said, making a ``clean sweep'' in western provinces, with ``good prospects'' in Quebec. In populous Ontario, the Liberals led handsomely, supported by the popularity of the province's Liberal premier, David Peterson. In the Atlantic provinces, the poll showed Liberals and Conservatives taking support from the NDP.

The pollsters found in the new survey the first evidence that Mulroney's free-trade initiative was yielding a political reward.

Both opposition parties oppose the free trade pact, which was initialed in Washington Oct. 3 by its chief negotiators after more than a year of bargaining. The deal will, starting on Jan. 1, 1989, eliminate all tariffs between the two nations over the following 10 years. It will also reduce some other trade barriers, though not as many as the negotiators at first hoped.

Phillips claims there is ``far more involved'' than free trade in the swing toward the Conservatives. He says voters are looking at other achievements showing ``the prime minister is clearly in command.''

Leaders of the opposition parties had been calling for a national election on the free trade issue. But with the results of recent polls, they now say other matters should be considered, too.

For example, the Liberal leader of the House of Commons, Herbert Gray, has said: ``The next election will be fought not simply on the trade deal but on the issue of the lack of confidence and integrity of the Mulroney government.'' Within the opposition, there is widespread expectation that the government will call an election later this year, though it could wait until 1989. The government itself has not announced its plans.

A former Liberal Cabinet member, Thomas Axworthy, predicts the election will produce a ``hung Parliament,'' with each of the three parties getting between 70 and 100 seats. Mulroney won headlines last week by warning of a possible coalition by the Liberals and the NDP after the next election, an idea NDP leader Edward Broadbent termed ``outrageous.''

The December poll also indicated growing support within Canada for free trade with the US: about 40 percent favor the deal, 39 percent are opposed, and 21 percent undecided. But support for the concept of free trade shot up eight points to 57 percent from 49 percent in October before the full agreement was available.

The poll also found that among people who said they would vote Liberal, 37 percent support the deal, with 47 percent opposed; of those who said they intend to vote for the NDP, 28 percent said they back the pact, while 57 percent oppose it.

Legislation is now being drawn up in both capitals to implement the pact. It is likely to be introduced this month in the Conservative-dominated House of Commons. Approval is expected by spring. Phillips says the Liberal-dominated Senate, an appointed body, has not indicated clearly whether it will try to block the bill. Refusal by the Senate to pass the legislation would create something of a constitutional crisis for the country.

US congressional leadership wants first to consider the ``omnibus trade bill'' that has been under review for more than a year. Dan Rostenkowski (D), Illinois, chairman of the House Ways and Means Committee, talks of taking up the pact in June. US trade officials expect Congress to pass the free trade legislation. But, said one, ``It is going to be a long, tough road.''