Russia and Canada Vow Cooperation

On the third stop of his four-nation trip, Russian President Boris N. Yeltsin signed a declaration of friendship Saturday with Canada that is to provide for closer economic, scientific and environmental cooperation between the two countries.

But Yeltsin, at a press conference in the Canadian Parliament building, did not try to hide his disappointment over having to return to Russia with plenty of moral support but little cash.

“Sometimes you’re surprised by the responses from certain countries,” said Yeltsin, explaining that he had been trying for months, to little avail, to persuade outsiders that Russia’s transition to a market economy “is a problem for the world as a whole.”

He warned that if Russia’s economic conversion fails, his country would fall under “a police regime,” and an arms race would begin anew that would cost the West “hundreds of billions of dollars.”

There would be “a very real danger of war,” he added.

Yeltsin said he wasn’t blaming Canada for failing to appreciate Russia’s problems, adding that he had found Canadian Prime Minister Brian Mulroney to be “a businesslike person.”

This was the first time the two men had met; the last time Yeltsin was in Canada, Mulroney’s Progressive Conservative government ignored him, for fear that to receive him would be to undermine then-Soviet President Mikhail S. Gorbachev.

Yeltsin did express his frustration with the American business leaders he had met in New York, saying that he had come away from them with the feeling that “there is no such thing as freedom from fear among these businessmen.”

In the Ottawa press conference, the two heads of state announced that Canada is increasing its credit lines to Russia by the Canadian equivalent of $88 million. Canada has already had lines of credit worth about $1.76 billion with Russia, tied to the purchase of Canadian goods and services.

Canada will also extend preferential trade terms to Russia, Ukraine and the Baltic states, reducing or eliminating tariffs on goods entering Canada. Mulroney said that the favorable terms would eventually be extended to other former Soviet republics.

And Mulroney said Canada will continue with a $22-million package of technical assistance it arranged with the former Soviet Union last year, noting that Russia’s share of the package will involve agriculture and energy projects.

Mulroney said his trade minister, Michael Wilson, will lead a delegation to Russia next summer.

He added that he is certain that more Canadian investment will flow into Russia “as the climate for foreign investment improves.”

“We are committed to the success of President Yeltsin because, simply put, his success is our success,” Mulroney said.

Yeltsin’s trip to Canada came at a bad time to make a plea for financial help. Canadian Finance Minister Don Mazankowski has been cutting discretionary spending and has warned Canadians that more deep budget cuts are in store.

The Canadian economy, which tends to suffer each time the U.S. economy enters a slowdown, has been in a deep recession.