White space is not something you "remove" unless you're talking about adding specific elements. If you want to "remove" whitespace put in objects or shapes you have created. If you want to change the background color create a rectangle over the entire page with a color.
There is a button at the bottom of the live trace "tracing options" that says "ignore white." It will ignore all white space in a live trace and just give you the color. Hope that helps!