Senate Panel Nearly Derails Canada Trade Talks

The Reagan Administration narrowly avoided a major trade policy defeat Wednesday when a last-minute White House lobbying effort pulled out a 10-10 tie vote in the Senate Finance Committee, sufficient to retain President Reagan’s authority to negotiate a free-trade agreement with Canada.

A defeat on the issue would have seriously damaged U.S. relations with Canada at a time when Canada for the first time in nearly 20 years is moving away from a closed, nationalistic trade policy.

The Administration sees a free-trade accord as one way to reduce the U.S. merchandise trade deficit with Canada, which was $22 billion last year.

The bipartisan opposition was led by Sen. John C. Danforth (R-Mo.). He won the support of most committee Democrats, who see trade as an issue to help them wrest the Senate from GOP control in the November elections.

Danforth proposed to derail the Administration’s “fast-track” plan for negotiating a free-trade pact with Canada. That procedure would strip Congress of the power to amend any trade pact, leaving it with the authority merely to approve or disapprove the accord.

Under a previously agreed procedure, the President was scheduled to automatically receive “fast-track” powers unless the Finance Committee voted otherwise before midnight Wednesday.

“Yesterday, I had the issue won 11-9,” said Danforth in a late-afternoon statement. “Early this morning I had the issue won 11-9.”

But Sen. Spark M. Matsunaga (D-Hawaii) switched his vote, and the tie spelled defeat for Danforth. Matsunaga told reporters that a telephone call from Reagan made the difference.

“I told the President that my position was based on a view that the President was neglecting Congress and its views on trade issues,” he said. “We are not consulted at all. I told him that the Finance Committee wants to teach him that lesson and that I can’t switch unless you can tell them that you have learned. To that, he said, ‘Yes, I have.’ And on that basis I reconsidered.”

Reagan promptly conveyed that message directly to key committee members during an hourlong meeting at the White House.

U.S. Trade Representative Clayton K. Yeutter, who was at the meeting along with other key Administration officials, issued a statement expressing gratification at the defeat of Danforth’s resolution and pledging to “consult regularly with the Congress throughout the entire negotiation” with the Canadians.

He said the Administration discarded one of the options under consideration--giving Congress a written assurance from Reagan that trading interests of specific industries would be safeguarded during the talks with Canada.

“There was no need,” he explained--meaning that the Administration already had enough votes in hand.

As committee Chairman Bob Packwood (R-Ore.) observed to reporters during the day’s maneuvering, Danforth succeeded in one of his objectives--to send the Administration a message that many members of Congress resent Administration indifference to their concerns about the nation’s massive trade deficit.

“Canada is an unfortunate victim,” Packwood said. “Canada is not the problem. It is the victim of historical animosity that has been building up for years” in Congress over the trade deficit.