Though there is tough industrial and regional resistance to be
overcome on both sides of the border, high officials are ecstatic
about the new United States-Canada trade agreement.
President Reagan and Prime Minister Brian Mulroney hailed it as
``historic.'' In an interview Tuesday, Clayton K. Yeutter, the
United States trade representative, declared:
``We have not had a more significant bilateral trade
negotiation, not in the past 200 years, and we will not in the next
200 years. It's more than positive - it's a major net plus on both
Sylvia Ostry, Canada's ambassador for multilateral trade talks,
agreed that both sides would benefit. But she said the relative
benefits for Canada would be greater in the short run with its
increased access to the much larger American market.
Stephen Blank, director of the Institute for United
States-Canadian Business Studies at Pace University, also said
Canada would gain more in the short run but that America would gain
``in the middle run'' as the countries ``keep on moving toward
The greatest benefit for all, Ostry argued, would be halting the
trend toward protectionism and opening trade opportunities not only
in goods but also in services and intellectual property.
These are new areas high on the agenda for the Uruguay Round,
agreed to at Punta del Este, under the General Agreement on Tariffs
``The Uruguay Round offers a challenge and an opportunity not
just for trade ministries but for government policy as a whole,''
Ostry said in her lecture last week at the annual meeting of the
International Monetary Fund and World Bank. A successful Uruguay
Round would spur economic growth, stabilize exchange rates and ease
the debt crisis, for expanded trade holds the key to all.
In the original Bretton Woods plan after World War II, an
International Trade Organization was to be the third leg of the world
economic system (with the IMF and World Bank as the two others).
But the trade organization was never created; instead a relatively
weak general agreement was. Now the original challenge of a
stronger trading organization has been revived.
The challenge comes, Ostry held, at a time of unique
transformation in the world economy:
- The trade imbalances, with the United States in deep deficit
and other industrial nations in heavy surplus.
- The information revolution linking financial markets and
production and the emergence of a multipolar world, with the
American, Japanese and West German economies the main centers - but
centers that could split apart in a crisis. …