Right Hon. R. B. BENNETT (Prime Minister):
Mr. Speaker, before the orders of the day are proceeded with I desire to make a short statement arising out of a question asked yesterday by the right hon. leader of the opposition (Mr. Mackenzie King). At that time he directed attention to certain statements appearing in the press that had been attributed to British public men, and I was then able to assure him that there was no foundation for those statements, so far as the government of Canada was concerned. Yesterday the Right Hon. Walter Runciman, President of the Board of Trade, made a statement in the British House of Commons, and in view of the importance of the matter and the desirability of there being no misunderstanding in such a matter I think it desirable at this time to read to the house his statement. Mr. Runciman said:
The house will remember when I last made a statement on this subject on 15th March, I informed them, on the failure of representatives of the textile industries of Japan and of this country to come to an agreement, the whole position was under review between the two governments.
When I saw the Japanese ambassador on the 16 th March. I handed him a memorandum inquiring whether, in the circumstances, the Japanese government bad any proposals to put forward for dealing with the problem. On the 31st March, I received a reply in which the Japanese government expressed their willingness to consider any further proposals which His Majesty's government in the United Kingdom might ^ make, but made no proposals of their own. The government have considered the whole problem again, very carefully in the light of this reply. It is already a year since His Majesty's government drew the attention of the Japanese government to the serious position arising from Japanese competition. It is
Trade with Japan
of course, of the utmost importance that every effort should be made to deal with a problem of this magnitude in the most appropriate way. Unfortunately there appeared to be nothing in the Japanese government's note of 31st March, to suggest that an early agreement on this subject was to be expected and, therefore, the government still holds the view that the problem which faces us is one which can only be settled satisfactorily by cooperation in some form between Japan and ourselves. His Majesty's government cannot allow a situation to develop in which negotiations are protracted indefinitely without any immediate prospect of success and during this time the Japanese- quite naturally from their point of view-are continuously expanding their exports in our markets to the detriment of Lancashire while our hands are tied'. Accordingly His Majesty's government have come to the conclusion that they would not be justified any longer in postponing, in the hope of an agreement, such action as is open to them with a view to safeguarding the trade of this country.
I therefore informed the Japanese ambassador on Thursday last that in the circumstances His Majesty's government were obliged to resume their liberty to take such action as they deemed necessary to safeguard our commercial interests. I assured him-and I am confident that the house will join me in this-that such steps as it was proposed to take would be taken in no unfriendly spirit.
As regards the Anglo-Japanese treaty, I am satisfied that His Majesty's government can, without denouncing it, take proper and sufficient measures to protect commercial interests of this country, and in these circumstances I see no reason to terminate a treaty which has regulated the commercial relations between the two countries for over twenty years.
As far as the United Kingdom market is concerned the government do not feel they can any longer suspend the review of silk duties by the import duties advisory committee, and my right hon. friend the Chancellor of the Exchequer has asked the committee to complete its report on these duties as quickly as possible.
In the case of the colonial markets my right hon. friend the Secretary of State for the Colonies has been in consultation with the colonial governors. The governments of the colonies and the protectorates for which such action would be appropriate will be asked to introduce import quotas which, except in the case of West Africa, would apply to all foreign imports of cotton and rayon goods. With a view to reinstating this country in the position in those markets which she held before the present abnormal period, it is intended that the basis for apportioning these quotas as between foreign countries shall be as far as possible the average of their imports in the years 1927-1931. It is further proposed that necessary legislation in colonial territories should be enacted with the least possible delay, and it should be so framed that the actual quota regulations will be reckoned as commencing retrospectively from to-day, 7th May, so that no attempt at forestalling will be allowed to frustrate the policies and intentions of measures under contemplation.
In the most important of West African colonies, as the house is aware, there are treaty obligations which preclude differentiation in favour of our own goods. It was for this
reason that on the 16th May of last year notice was given to release West African colonies from their obligations under the Anglo-Japanese treaty, and action there will be limited to Japanese goods.
I have not attempted to deal in this statement with the position of any goods except cotton and rayon textiles. The government are aware that Japanese competition is not limited to these goods, and are considering in the case of each of the other industries involved w'hat tariff action in the colonial market is called for. As regards the home market I have no reason to suppose that the matter cannot be dealt with by means of ordinary procedure of Import Duties Act.
While His Majesty's government cannot any longer refrain from taking steps to safeguard our trade interests, we shall, of course, be ready at any time to give most careful consideration to any proposal which the Japanese government may desire to put forward towards a solution by mutual agreement of this difficult problem. A solution of this kind ought to be possible where governments of the two countries are anxious to agree.
That is the conclusion of the statement of the President of the Board of Trade, and I avail myself of this opportunity to thank the right hon. leader of the opposition for bringing the matter to the attention of the chamber.
Subtopic: STATEMENT MADE BY EIGHT HON. WALTER RUNCIMAN IN BRITISH HOUSE OF COMMONS