Reagan Stresses Canada Free-Trade Goal : O’Neill Endorses Unfair-Practices Bill Aimed at Other Nations

President Reagan on Saturday reemphasized his determination to negotiate an agreement to lower trade barriers between the United States and Canada, while House Speaker Thomas P. (Tip) O’Neill Jr. (D-Mass.) endorsed pending legislation that would retaliate against nations--other than Canada--that engage in unfair trade practices.

“With regard to trade, I have informed the Congress that I want to begin negotiations with Canada on an agreement of historic significance to both countries,” Reagan said in his weekly radio message to the nation. “Our goal is to promote free and open economic competition and to reduce those few barriers to our trade that still remain.”

Secretary of State George P. Shultz, during a visit to Canada last October, announced a plan to start early this year on negotiations toward ending or lowering the remaining curbs on what is already the world’s largest volume of trade between two nations. That trade amounted to $120 billion in 1984, with a final balance of about $10 billion in Canada’s favor.

O’Neill, responding to the President’s talk on behalf of the Democrats in Congress, predicted that 1986 will see the Democratic-controlled House approve “legislation that forces our trading partners to open their markets to American goods and sets tough sanctions on countries that use unfair trade practices to run up exorbitant trade surpluses.”

Without reference to Reagan’s end-of-session vetoes of legislation that would have slashed imports of textiles, shoes and copper, O’Neill declared that he too had been a free trader. Then he pointedly observed that $50 billion of a $145-billion trade deficit for 1985 derived from trade with Japan, which, along with Taiwan, South Korea and Brazil, would be subjected to a 25% import surcharge under pending legislation, unless it acted to open its markets to U.S. products.

Sees Bill as ‘Starting Point’

O’Neill said that the measure, sponsored by Reps. Dan Rostenkowski (D-Ill.) and Richard A. Gephardt (D-Mo.), would be “an excellent starting point” for development of a fair trade policy.

Reagan began his talk with a summary of his meeting Friday in Mexicali, Mexico, with Mexican President Miguel de la Madrid. He confirmed reports of progress in a number of areas, including trade, and an agreement to redouble efforts to curtail the traffic in illegal drugs originating in Mexico.

“We’re of one mind about the need to eliminate drug crops, to provide heavy patrols on the border, and to step up the prosecution of those who deal in illegal narcotics,” Reagan said.

But Reagan made it clear the meeting was not all clear sailing. Supporting accounts of U.S. officials who said Friday that the two presidents remained divided on the Reagan Administration’s stern anti-Communist policies in Central America, Reagan said, in effect, that he had reasserted those policies.

Reagan reported that De la Madrid had “stressed that conflicts in Central America have in many cases arisen from social and economic injustices.” He said he agreed with De la Madrid that those nations have been “beset by poverty” and added that U.S. economic aid to the region amounts to “some $1.2 billion.”

“But I felt bound to add something else, something crucial,” Reagan continued. “The answer to Central America’s problems is political and economic freedom, not Soviet tanks and ruthless regimes like the Communist dictatorship in Nicaragua that wages a war against its own people. And this is why the United States will continue to support those fighting for freedom and democracy in Nicaragua.”