French and Canadian fishermen cross nets in North Atlantic. Governments seek settlement of escalating fishing dispute

When John Cabot sailed from Bristol in 1497 to the coasts of what is today Nova Scotia, Newfoundland, and Labrador, he not only established the British claim to most of North America. The explorer-navigator also found abundant fisheries offshore. Those fisheries are today the subject of a touchy dispute between Canada and France that is also causing Ottawa some problems at home. French fishermen want to continue hauling up cod, as they have for centuries. Canada wants to keep more of the fish from the waters off Canadian shores for its own fishermen.

Part of this battle hangs on a long-standing offshore boundary dispute that representatives of the two nations discussed last week in London. France claims territorial control over a 200-mile, fish-rich swath of the Atlantic Ocean south of the two small French islands of St. Pierre and Miquelon, located 15 miles off Newfoundland. Canada says the islands are only entitled to a 12-mile zone.

At the London meeting, the two countries began work on the terms for international judicial settlement of the boundary dispute.

To get France to the table on the boundary issue, Canada had to make some promises in return. Ottawa said it would consider giving the French quotas for fishing cod in undisputed Canadian waters off the east coast of Labrador and Newfoundland, including a portion of the Grand Banks, for the years 1988-91. The quotas are conditional on the French committing the dispute to an international tribunal this year.

The possibility of Ottawa letting the French fish cod off of Newfoundland lit a political firestorm in St. John's, the provincial capital. The province's feisty premier, Brian Peckford, called the deal ``a disaster for Newfoundland.'' He called for, and got, an emergency meeting of provincial premiers early last month in Toronto to consider the issue.

Mr. Peckford's efforts won a promise from Prime Minister Brian Mulroney to involve the provincial government, its fishing industry, and union representatives in the separate talks planned on the quotas. Mr. Mulroney emphasized that Canada would not give up cod unless the boundary dispute was clearly moving into arbitration and there was resolution of a current problem of overfishing in the disputed area.

The fishing dispute is complex. It involves a 1972 treaty between Canada and France that gave France certain fishing rights. The European Community also has quotas for the Grand Banks that will soon expire.

But since Canada extended its jurisdiction to 200 miles offshore at the start of 1977, Canadian fishermen have been rapidly building up their capacity to take more of the total allowable catch within that zone.

In northwest Atlantic waters, Newfoundlanders nowadays take between 16 and 17 percent of the total catch, compared with 7 percent in the first half of the 1970s. Other Canadians have increased their take in the same period from 14 percent to about 28 percent. Foreigners' catch of 55 percent is down from nearly 80 percent in 1973. In the case of much-prized cod, Canadian fishermen now take nearly 80 percent of the catch, while in 1975 foreigners took 76 percent.

Using the boundary dispute as a lever, the French are fighting to retain sizable quotas for cod and other fish. With the threat of more of Brian Peckford's rhetoric at stake, Ottawa negotiators are expected to be under great pressure to keep concessions to a minimum.