US SAYS CANADIAN, ISRAELI PACTS SHOULD SPUR TRADE Trade Representative Clayton Yeutter said on Monday that the U.S. free trade agreements with Canada and Israel should help to pave the way for liberalizing the global trading system. He said the Canadian and Israeli pacts will not set back worldwide reform efforts under the General Agreement on Tariffs and Trade (GATT) as some critics feared but help them. The GATT talks began a year ago in Punta del Este, Uruguay to liberalize the global trading system and to include in it trade in agriculture and services such as banking. Yeutter made his remarks at a U.S.-Israeli trade meeting marking the second year of their bilateral accord. The Canadian-U.S. pact, signed by two sides two weeks ago, has yet been approved by the U.S. Congress and Canadian Parliament. The two free trade agreements (FTA) would gradually remove tariffs and other barriers to cross-border trade in goods and many services. Yeutter said in the aftermath of the Canadian and Israeli pacts "other countries have realized that if they want to continue to have access to the world's largest market, they had better get serious about improving the GATT." The pact with Israel, he said, is gradually increasing shipments both ways and the Canadian pact will substantially increase the gross national products in both countries. Yeutter also said the Canadian and Israeli pacts should serve as important precedents for progress in GATT. Yeutter said, "increasing trade is one of the keys to enhanced political and economic stability around the globe." He said, "a stronger GATT will enhance prosperity, not only for advanced industrial nations, but also for other countries that need to increase trade in order to better their standards of living." Yeutter added it was important not to risk the progress made in the Israeli and Canadian trade pacts by resorting to protectionism. He was referring to trade legislation pending in Congress that would force the United States to take retaliatory actions against nations with large trade surpluses with the United States if the countries practiced unfair trade. The legislation was prompted by a growing U.S. trade deficit that hit 156 billion dlrs last year and is still rising. Yeutter said the pressures for Congress to act were hard to resist, but the pending legislation would undermine President Reagan's efforts to liberalize the world trade. Yeutter renewed the threat of a White House veto. He said, "President Reagan will veto any bill that contains serious flaws, and I believe that veto would be sustained."