Trade, Northwest Passage Key Issues

Here is a summary of the major issues in U.S.-Canadian relations that President Reagan and Canadian Prime Minister Brian Mulroney may discuss in their meetings:

-- Free Trade. Canada has proposed an agreement to increase and guarantee its commercial access to the American market by eliminating remaining tariffs and other obstacles to Canadian products. The United States agrees in theory but wants to maintain some form of protection of U.S. industries against possible Canadian unfair trade practices. Canada also wants protection of so-called “cultural industries” and such other key sectors as automobiles and agriculture.

-- Acid Rain. Canada is seeking a guaranteed schedule of American reductions of air pollution emissions that it contends endanger large numbers of Canadian lakes and waterways. Reagan has offered a five-year, $2.5-billion program to study the causes of acid rain, but he has refused to commit to a program of actual reductions of airborne pollutants.

-- Arctic Sovereignty. Canada wants the United States to acknowledge full Canadian sovereignty over the Northwest Passage in the Arctic, including the right to control American military and commercial air and sea traffic in the area. The United States maintains that the Northwest Passage is an international waterway.

-- Defense. The United States wants Canada to contribute more money and troops to both North American and Western European defense. Canada agrees but pleads that financial problems preclude any big spending increases in the immediate future.