By returning Conservative Prime Minister Brian Mulroney to power in this week's elections, the Canadian people, in effect, have approved closer economic ties to the United States. It is a move that should benefit both countries.

The Canadian election was centered almost exclusively around the Canada-U.S. Free Trade Agreement worked out earlier this year between President Reagan and Mulroney and later ratified by the U.S. Senate.That pact essentially eliminates most trade barriers between the two nations, which should open up new markets and opportunities on both sides of the lengthy border.

But some Canadians had feared the treaty would mean the U.S. economy would swamp the Canadian economy. Opponents of Mulroney argued passionately that totally free trade would not only flood the Canadian market with American goods, but would also divert Canadian resources into business and away from the expensive social programs that most Canadians support.

In addition, they argued that economic intimacy might lead to eventual political intimacy and the disappearance of Canada as a nation - reappearing as several northern states of the United States.

Those fears seem farfetched to most Americans, but they are real to some Canadians who feel their independence is continually threatened - even if inadvertently and unconsciously - by the U.S.

The opposition tactics were effective, even though they could not keep Mulroney from returning to power. But the prime minister, while winning a majority, has a greatly reduced base in Parliament. His Conservative Party won 169 seats - a loss of 42 - to the combined 126 seats for two other parties.

Yet that is more than enough to pass the trade agreement, especially since the Canadian people have spoken and said they are not afraid to have closer economic ties with the U.S.