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Real Commitment

October 06, 1987

The general agreement on free trade that was negotiated over the weekend between Canada and the United States is unprecedented in the struggle to break down the barriers of protectionism and facilitate international commerce. It is a singular achievement of conspicuous benefit to both nations. President Reagan and Prime Minister Brian Mulroney deserve high praise for their courageous commitment to this agreement.

But it will not be easy to win the endorsement of the U.S. Congress, and some of Canada's provincial governments--whose agreement also is required--may create obstacles.

We now have only the broad outlines. Some details remain to be negotiated. As those details become known, additional opposition will inevitably be generated from interests that will either lose the protection that they now enjoy or face increased competition in the free market. It will also become increasingly clear, however, how broadly this will benefit the people on both sides of the frontier.

Substantial controversy already has been generated in Congress by a unique element of the agreement: the provision for the settlement of disputes through the creation of an international tribunal that in effect would provide binding arbitration. Canada wanted more. To provide less than this would be to make the agreement meaningless. This is an imaginative and positive solution, assuring fairness to each nation while protecting the intent of the separate trade legislation of each. Dumping and unfair practices will remain subject to discipline.

This will not satisfy some American interests that have benefited from the way countervailing tariffs and anti-dumping rules have been applied. In recent months, for example, the United States has acted against Canadian exports of cedar shingles and shakes and softwood lumber, accusing Canada of unfair subsidies for its products. In fact, there has been persuasive evidence on both sides of the dispute, including indications that much of the Canadian advantage flowed from more efficient operations and more effective marketing. But, in the absence of an international arbiter, the United States has imposed its own decisions, and the consumer in the United States has been the principal victim--forced to pay higher prices.

Some in Congress appear anxious to make the Canadian agreement a hostage of extremism in the omnibus trade legislation that will come to a vote later this year, months before the Canadian agreement is likely to face a congressional decision. That would be an unfortunate development. The Canadian agreement is a model of the ways to liberalize trade and produce economic growth. The omnibus trade bills, passed by the two houses of Congress and now being reconciled, are examples of illdisguised protectionism designed to protect special interests and frustrate broader international trade negotiations by limiting presidential discretion.

The President has already made clear his determination to veto both the textile bill and the omnibus trade legislation unless they are stripped of protectionism. He should. We are confident that Congress also will come to realize the extraordinary benefits for the American economy of trade agreements like the one just negotiated with Canada. Protectionism buys stagnation, and can promise only benefits, if any, that are transitory. But free trade, despite the inevitable hardships of readjustment and the harshness of competition, buys economic growth and development that ultimately benefit the population as a whole--not for the short term but for the long term.

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