Experts say Utah's economy will be on the rebound in 1989 and a landmark free trade agreement between the United States and Canada could play a role in the local economy's upward climb.

Utah already enjoys a healthy trade surplus with Canada, and the new free trade pact that went into effect Jan. 1 has the potential of continuing that relationship, while creating local jobs and business opportunities, according to the U.S. Department of Commerce."Through the (agreement), Utah consumers and manufacturers alike will benefit from reduced prices and a greater diversity of available products brought about by greater competition, rationalized production and more efficient business operations," the department said.

The trade agreement was agreed to reluctantly at first by the U.S. Congress and later almost scuttled by the Canadian Senate, forcing Prime Minister Brian Mulroney to call an election before it finally passed Parliament.

Under the pact, tariffs will be phased out over the next 10 years between the two giant trading partners and pave the way for expanded crossborder financial investment and trade in energy and services.

U.S. Customs officials said tariffs will be dropped immediately on such tourist goods as fur garments, whiskey and rum, skis and skates. Also, as of Sunday, tariffs would fall by 20 percent on jewelry and some meats and musical instruments and by 10 percent on textiles, apparel, tires, wine and beer, and watches.

In 1986, Utah exported $293.5 million in commodities to Canada, while importing more than $105 million in Canadian goods, Department of Commerce statistics said.

The top three Utah exports to Canada in 1986 were precious metals and alloys ($184.5 million), electronic computers ($23.3 million) and phosphate rock ($9.8 million). Other exports include non-ferrous metals and alloys, telecommunication and related equipment, various inedible end products, mining and natural resources equipment, medical and lab supplies and motor vehicles.

Meanwhile, leading Canadian imports to Utah include live animals ($13.2 million), petroleum and coal products ($12.1 million), aircraft engines and parts ($7.1 million) and newsprint ($6.7 million).

Canada accounts for $518 million of the $2.8 billion foreign countries have invested in Utah in property, plants and equipment. Canadian tourists spent $9 million in Utah during 1986.

"We set up offices to establish trade with the Pacific Rim, but we already export more to Ontario," said Earl H. Fry, specialist in Canadian affairs at Brigham Young University's Kennedy Center for International Studies.

Fry's comments came at a seminar last year at Salt Lake Community College on trade with Canada. He said the export of domestic goods has increased whenever free trade agreements are entered into.

"The greatest opportunities are for computer and electronics firms," he said.

Department of Commerce figures said the agreement's elimination of a 3.9 percent duty next year can boost sales of Utah's computer and electronics products to Canada.

Government contract opportunities will be expanded through the agreement, the department said, which would make Utah firms eligible to compete for an additional $500 million in Canadian federal public sector purchases.

Opportunities for transportation manufacturers, financial and professional services, and foreign investing will be enhanced by the trade agreement. Entry procedures for traveling business professionals will also be simplified.

The trade pact will hurt Utah's struggling uranium and energy industries. But, Fry said, those industries were never competitive with Canada.

The agreement will provide free bilateral energy trade, giving Utahns access to Canada's energy supplies and doing away with restrictions on Utah energy exports.

Southern Utah's uranium mining industry already has been hard hit by Canadian competition, and officials in San Juan County believe the free-trade agreement could completely shut down the state's operations, resulting in the loss of about 200 jobs.

The exact overall impact the agreement would have on Utah employment is not known, but the Department of Commerce said thousands of Utah jobs are directly related to trade with Canada and that number is expected to increase as trade in other industries improves.