Shultz Expects Major U.S., Canada Trade Talks in ’86

The United States and Canada expect to begin talks early next year on a comprehensive agreement aimed at reducing or eliminating the remaining restraints on what already is the world’s largest nation-to-nation trade volume, Secretary of State George P. Shultz said Monday.

Shultz announced U.S. acceptance of a Canadian proposal for trade negotiations after his regular consultations with Canadian External Affairs Minister Joe Clark.

Despite growing protectionist sentiment in Congress, Shultz said, both nations would benefit from increases in U.S.-Canadian trade, which totaled $120 billion last year, the highest figure for trade between two nations in the world.

Canadian exports accounted for well over half of that total, giving the Ottawa government a surplus of about $10 billion.

Last year, according to Canadian statistics, Canada sold 75.6% of its exports to the United States and obtained 71.5% of its imports from the United States. Much of that trade is tariff-free, but Shultz said Canada’s remaining tariffs are among the highest in the industrial world.

Under U.S. law, trade talks cannot begin until the Administration officially consults with Congress and private business, a process that already has begun.

“With our statutory requirements for consulting with Congress and the private sector in mind, we believe it will be possible to begin formal bilateral negotiations in early 1986,” Shultz said.

Later, he told a press conference that the early 1986 date was “a guess, an estimate on my part, but I wouldn’t have said it unless I thought there was a good chance of meeting it.

“The road to bilateral trade agreements will be steep, but it is worth the climb,” Shultz said.

Clark said Canada must look to its principal market in the United States if it hopes to make substantial increases in its trade.

“We want to begin discussions with the U.S. to secure and enhance market access for both our countries,” Clark said. However, he added, “a trade agreement with the U.S. could cause change and probably some dislocation.” Clark said Ottawa wants the talks because “there is some risk to Canada now from protectionist pressures in the U.S.”

Shultz expressed confidence that the Administration will be able to overcome protectionist sentiment in Congress.

“President Reagan stood up to protectionist sentiment,” Shultz said. “To beat the President, you have to generate over two-thirds of the vote in both houses of Congress” to overturn a veto.

On another potential cause of friction between the two countries, Shultz offered to allow Canadian Justice Ministry officials to review U.S. records concerning disputed drug experiments conducted in the 1950s in a Montreal hospital by a doctor working for the CIA. Canadian subjects of the LSD experiments have sued the hospital and others involved.

A U.S. official said, however, that the Canadians will not be allowed to interview CIA officers.