	u s canada ties seen worse without  pact u s canadian ties could worsen if the two nations are unable to reach a free  pact according to a study published by two nonpartisan public policy research groups the cato institute of washington and the fraser institute of vancouver said removing the remaining tariffs on cross border  would benefit both countries but cato chairman william niskanen added the two nations generally harmonious  relations are probably not sustainable without a new agreement the united states and canada whose cross border  totaled about billion dlrs last year have been holding talks since last june on a pact to end the few  barriers remaining between their two countries the u s put a deadline on the talks of october but both sides have said an agreement is likely despite tough bargaining remained niskanen said if no pact is reached bilateral  ties could deteriorate because of congressional pressure on president reagan to implement  laws more aggressively and this could hit some canadian  practices he noted canada is seeking foreign investment in its auto industry which could put strains on the considerable bilateral free  in u s and canadian autos and parts niskanen also said the canadian government is vulnerable to a resurgence of economic nationalism which could restrict u s exports to canada a free  pact backed by president reagan and prime minister brian mulroney would open new markets for canada and enable its industries to achieve economies of scale which would also help it widen exports worldwide he said it would also increase the gross national products of both countries niskanen said the goal of a pact should be to end all tariffs within years lower subsidies on exports set rules for  in services and investments end curbs on government procurement and agree ways to resolve  disputes reuter 
