Reagan’s Domestic Focus Worried Mulroney

OTTAWA —  Canadian Prime Minister Brian Mulroney says that he and other world leaders were very concerned that crucial American foreign policy decisions were being overlooked earlier this year because of President Reagan’s preoccupation with the Iran arms scandal and his health.

“The focus of his Administration . . . was on his own domestic obligations,” Mulroney said, referring specifically to the President’s hospitalization in January for prostate surgery and the crisis over the shipment of arms to Iran, “but life continued for the rest of us.”

The prime minister made his remarks during a two-hour interview he gave this week to some American reporters based here as Canadian officials prepared for the annual Reagan-Mulroney meeting to be held Sunday and Monday in Ottawa.

As an example of the concern he cited over Reagan’s situation, Mulroney spoke of a meeting he had in Rome with Italian Prime Minister Bettino Craxi in January: “Craxi and other Italian leaders, like other prime ministers around the world, were saying to themselves, ‘When are these problems that are important to me going to get some attention. . . ?’

“They too were preoccupied with relations with the U.S. and what was going to happen.”

Mulroney said his own particular worries dealt with crucial bilateral issues, particularly efforts to negotiate a free trade agreement and obtain greater American cooperation in reducing acid rain, a form of air pollution that reportedly is endangering large numbers of Canadian lakes and waterways.

“I felt if it (Reagan’s single-mindedness) went much beyond the end of January without focusing on this (Canadian concerns) in a major way,” chances of reaching agreements would be threatened, he said.

“I was concerned we were not getting the priority treatment required to either solve or fail to solve these important issues.”

Mulroney said it was this concern that led him to call for a quick visit by Vice President George Bush and Treasury Secretary James A. Baker III to Ottawa on Jan. 21 to discuss the matters.

“I got the impression,” Mulroney said, “that our initiative . . . had a lot to do with galvanizing Administration efforts and refocusing economic priorities on Canada.”

Indeed, Bush told reporters after his meeting with Mulroney that he had gotten “an earful” from the prime minister about Canadian concerns and that he promised action.

This was manifested when Reagan telephoned Mulroney while the prime minister was in Zimbabwe and told him there would be an unprecedented reference to the free trade negotiations in the President’s State of the Union message to Congress.

Since then, Mulroney said, Reagan has been paying sufficient attention to other matters, at least from a Canadian point of view.

“It’s not accurate to say the President needed help politically” from a free trade agreement with Canada, he said, “but the President recognizes the importance of the relationship. . . . He is uncommonly sensitive to Canadian realities.”

Although the prime minister said that the upcoming meeting with Reagan will not result in any major breakthroughs on free trade, acid rain or other outstanding issues, a positive picture is essential to his own plans for political rehabilitation.

A new poll taken by the Toronto Globe & Mail newspaper this week indicates that Mulroney is considered the best qualified national political leader by only 17% of the Canadian public. Furthermore, his Progressive Conservative Party ranks a distant third to the opposition Liberal and New Democratic parties.

While denying that his current woes are the result of his efforts to deal with the United States, the prime minister acknowledged that a free trade agreement is important to future electoral success.

Such an accord, he said, would be “an important part of my record, and I will run on it and I will be reelected.”

Trade Progress Seen

Although he and American officials say progress has been made on a free trade pact since negotiations started last year, most of the talks so far have dealt with relatively easy problems, with the most difficult matters set aside.

Mulroney alluded to the most troublesome problem when he said that American “trade remedy laws cannot apply to Canada. Period.”

That was a reference to laws imposing countervailing measures against nations that use subsidies, lower-than-cost prices or other unfair trade practices to gain a competitive advantage over American producers. U.S. officials say Canada cannot be exempted from such legislation.

Mulroney said a solution could be found, although he did not say what he had in mind. There will be an agreement, he said, but over a “10-to-15-year time frame.”

He said a free trade agreement is as important for the United States as for Canada, if for no other reason than the example it would set. “It would have a healthy effect on trade throughout the world,” he said.

Mulroney pointed especially to the current U.S.-Japanese conflict over computer chips as the kind of “debilitating and disastrous” trade war that could hurt everyone.

The prime minister said he and Reagan have to show the “political will . . . and leadership” that will show “the way out of the (trade) fratricide the world is increasingly engaged in.”

But in a tacit plea for a greater effort by the President to help get a free trade agreement, Mulroney said that “to be a world leader requires from time to time a degree of unselfishness.”

In other matters, Mulroney said he is satisfied with the Americans’ current position on acid rain but added that his goal remains a U.S. commitment to reduce levels of the sulfur dioxide causing the pollution by 50% by 1994.

Reagan has agreed to ask Congress and private industry for $5 billion over a five-year period for study and demonstration projects but has not accepted the full Canadian position.

Other issues for discussion concern a disagreement over Canada’s contention that it has sovereignty over the Northwest Passage linking the Atlantic Ocean to the Beaufort Sea in the Arctic region. The United States maintains that the passage is an international waterway open to its ships without restriction.