Reagan Optimistic on Trade Pact With Canada

President Reagan said Saturday that he is optimistic his talks with Canadian Prime Minister Brian Mulroney will pave the way for a “mutually beneficial and advantageous” free-trade agreement this year.

Reagan, in his weekly radio address delivered from the Oval Office, also said he hopes his two-day meeting in Canada, beginning today, will smooth disagreements with the Canadians over acid rain.

“As nearby neighbors, the environment has always been a high priority for both our countries,” Reagan said. “Canada and the United States continue to worry about the consequences of acid rain.”

Shortly after the address, the White House announced that Reagan is formally sending Congress his request for a $2.5-billion, five-year plan to attack acid rain. The plan suggests spending $500 million annually in the fiscal years of 1988 to 1992, the announcement said.

On the free-trade issue, the President acknowledged that “much hard bargaining lies ahead,” but added: “We are optimistic that a comprehensive plan mutually beneficial and advantageous to both sides can be hammered out this year.

“Our goal is a free trade agreement that will remove tariffs and . . . barriers between us,” he said.

In the Democratic response, Rep. William H.Gray III (D-Pa.), chairman of the House Budget Committee, noted that the United States had a $20-billion trade deficit last year with Canada.

Reagan recalled that he and Mulroney have endorsed the report of their special envoys on the acid rain problem.

However, Mulroney, who is facing pressure from opponents to take a tough stance during his talks with Reagan, is expected to push for aggressive U.S. action on acid rain, including a 50% cut in polluting emissions from U.S. industries.

The President also praised Mulroney’s Progressive Conservative government for pledging higher defense spending.