February 25, 1936

CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Swordfish must not be

frozen.

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

I am not an

authority on swordfish.

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

It is in the schedule.

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

I will not cross swords -with my hon. friend on that. To continue:

Salmon (Pickled or Salted)

Reduction 25 to 20 per cent ad valorem.

Smoked Herring

Reduction from 1J to | cents per pound.

Eels

Reduction from 1 to J cent per pound.

Razor Clams (Canned)

Reduction from 23 per cent ad valorem to 15 per cent.

Lobsters and other Shell Fish

Bound on free list. Exports: 1929, over $3,000,000; 1934, approximately $2,250,000.

Sea Herring and Smelts (Frozen or Fresh)

Bound on free list. Exports: 1929, $1,250,000; 1934, $893,000.

The principal concessions on forest products granted to Canada are:

Lumber and Timber-Fir, Pine, Spruce,

Hemlock and Larch

Reduction in duty from $4 to $2. Quota for Douglas fir and western helmlock, 250,000,000 feet per year. No quantitative limitation on other species. Export in 1929, $38,000,000; 1934, less than $6,000,000.

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Is that 250,000,000 feet

each for hemlock and fir, or for the two together?

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

For Douglas

fir and western hemlock.

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

That would be the two

together?

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

Yes.

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

That is what I wanted

to be sure about.

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

To continue: Maple, Birch and Beech Flooring

Reduction from 8 per cent ad valorem to 4 per cent. Exports: 1929, $259,000; 1934,

Canada-U.S. Trade Agreement

Pulpboard (in Rolls) for use in the manufacture of Wall Board

Reduction from 30 per cent ad valorem to 15 per cent and from 10 per cent to 5 per cent.

Shingles

Bound on free list. Quota 25 per cent United States consumption. Exports: 1929 nearly $7,000,000; 1934, $3,500,000.

Logs, Posts, Ties, Poles, Pickets et cetera

Bound on free list. Exports: 1929, $12,000,* 000; 1934, less than $2,250,000.

Now I will give the principal concessions on mineral products granted to Canada:

Ferro Manganese

Reduction from 1J cents to one cent per pound manganese content (as a result of concession in the agreement and of a reduction in the Brazilian agreement on manganese ore). Exports: 1929, $3,600,000, 1934, $250,000.

Ferro Silicon

Reduction from 2 cents to 11 cents per pound metallic content. Exports: 1929, $1,193,000; 1934, $188,000.

Lime (n.o.p.)

Reduction from 10 cents to 7 cents per hundredweight. Exports: 1929, approximately $300,000; 1934, $74,000.

Feldspar (Crude)

Reduction from 50 cents to 35 cents per long ton. Exports: 1929, approximately $250,000; 1934, $66,000.

Basic Refractory Material

Reduction from 30 per cent to 271 per cent ad valorem. Exports: 1929, $200,000; 1934, $167,000.' .

Gypsum, Asbestos (unmanufactured); Cobalt and Cobalt Ore, Nickel Ore, Matte and Oxide; Crude Artificial Abrasives (n.o.p.).

Bound on free list. Exports: 1929, approximately $16,000,000; 1934, approximately

$8,000^000.

I will now give the principal concessions granted to Canada on manufactured goods. A large number of manufactured goods is included in the products on which the United States duties are lowered, the most important being those in which hydro-electric power constitutes an important factor in the cost of production:

Acetic Acid

Reduction from 2 cents to 11 cents per pound. Exports: 1934, $1,846,000.

Ferro Alloys and Synthetic Resins and Acetylene Black

Reductions in duties ranging from 25 to 50 per cent.

Patent and Harness Leathers

From 15 per cent and 121 per cent respectively to 10 per cent. Exports: 1929, over $2,000,000; 1934, negligible.

Pipe Organs

Reduction from 35 per cent to 25 per cent.

Electric Cooking Stoves and Ranges

Reduction from 35 per cent to 25 per cent ad valorem.

Sporting Goods

Reductions ranging from 25 to 50 per cent.

Whiskey (Over Four Years Old)

Reductions from $5 to $2.50 per proof gallon. This is a most important concession. That is not only Scotch whiskey, as my right hon. friend supposed, but all whiskey.

Newsprint paper and those classes of wood pulp of which Canada has been the chief supplier to the United States are bound to the free list. That is one of the most important concessions. Our exports under this head in 1929 were $167,000,000, and in 1934 approximately $89,000,000.

I wish to deal now with the concessions granted to the United States on the basis of Canadian imports. Here it will be noticed that the concessions which have been granted to the United States in most cases involve a very substantial benefit to our Canadian producers as well as consumers because they are on commodities with respect to which there has been for some time past a demand for reduction in duty.

The total imports to which these items have reference amounted in 1930 to $847,000,000, and in 1935 to $304,000,000. There are eighty-six reductions in duties; seventy-nine are bound to the present rates, and fifteen are bound to the free list. There are concessions altogether with regard to 180 different commodities.

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

That is outside of the

general and intermediate tariff?

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

Yes. What I wish to point out in connection with the concessions made is that where concessions have been granted by Canada they are for the most part with respect to a number of individual items, while the concessions granted by the United States to Canada are for the most part on categories rather than on individual items. While, therefore, the number of concessions granted by the United States to Canada is less on a numerical calculation, they may mean more in Teality since the concessions are granted on categories of articles rather than on individual articles.

Canada-XJ.S. Trade Agreement

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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REC

Henry Herbert Stevens

Reconstruction

Mr. STEVENS:

I think the right hon.

gentleman stated a moment ago that these concessions affected an importation of some S800.000.000 in 1929, and I was wondering whether that figure was correct. It seems extraordinarily large.

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

Our total imports in 1930 were 8847,000,000, and in 1935 they had fallen to $304,000,000. What I should have added-I omitted it to save time-was the valuation of the articles that will be affected by the reduction. The eighty-six reductions in duty would have affected imports in 1930 amounting to $123,000,000, and in 1935 to $23,000,000. The seventy-nine bound to the present rates would have affected imports amounting to $66,000,000 in 1930, and $21,000,000 in 1935. The fifteen bound to the free list would have affected imports amounting to $62,000,000 in 1930 and $32,000,000 in 1935. In other words, the 180 commodities on which concessions have been granted would have affected imports to the amount of $251,000,000 in 1930, and to the amount of $76,000,000 in 1935.

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Is that the calendar or

the fiscal year?

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

How would that be?

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

By giving the intermediate tariff under most favoured nation treatment. Magazines are protected only under the general tariff; under the intermediate tariff, they come into this country free of duty.

The point of controversy or discussion between us would seem to narrow down to what my right hon. friend said the other day with respect to this being a balanced agreement. I do not think there can be much room for controversy or difference apart from this because he was prepared to exchange commodities on the bases that have been indicated. It is simply a question of whether the concessions granted on the one side counterbalance in a reasonable way the concessions granted on the other. As I have pointed out, in .making the agreement we have been looking to the future, careful to see that no advantage was gained by the United States over our own country.

In granting the intermediate tariff Canada extends to the United States reductions in duty on some 700 items, but the intermediate tariff has been designed to afford Canadian industries protection against other countries, most of which have lower standards of living than has the United States. Consequently, in according the United States the intermediate tariff we are granting that country the minimum which she might expect from the conclusion of a trade agreement with Canada. That the late government fully recognized. This may be seen by the Canadian note of November 14, 1934.

On our part we will benefit to an increasing extent from such further reductions in duty as the United States may grant in trade agreements which she is negotiating with other countries; and, in time, these additional concessions which Canada will receive by virtue of the most favoured nation clause will fully balance the benefits which the United States has derived from being accorded the intermediate tariff of Canada.

In addition to granting the United States the intermediate tariff we have reduced the duty on eighty-six items in the Canadian tariff below the intermediate rates at present in force. Canada, on her part, has received reductions in respect to sixty-three items of the United States tariff, in addition to the binding of twenty-one items on the free list.

It might as I have said appear that numerically Canada has given concessions on 12739-33

a greater number of items than those on which she has received concessions. It must be remembered, however, that the great bulk of Canadian exports falls within a few categories of goods embracing a large trade and affecting only a limited number of classifications of the United States tariff. United States exports, on the other hand, cover a wide range of products of a diversified nature, which are enumerated in greater detail in Canadian tariff schedules than in the corresponding schedules of the United States tariff.

In the case of nickel and aluminum it was felt that any changes in existing duties would have been economically unjustified at the present time as tending to upset large investments of capital for the conversion of these metals, while so far as copper is concerned surplus stocks in the United States precluded any concessions respecting this product.

Of the other products not covered by the trade agreement the most important are codfish and table potatoes, and in the case of both these products low prices and depressed conditions in the industries concerned in the United States made it impossible for the government of that country to consider the granting of concessions on these products at the present time.

Assurance of the continuance of the moderate rates of duty under which low grade wheat, and byproducts of grain have been exported in considerable volume to the United States was the only direct concession that the government were able to secure for the grain growers of Canada. Both countries are normally heavy exporters of grains and high duties have been maintained against imports of grains in order to assure United States producers against drastic falls in price levels. To have reduced the duties on grain at this stage would have taken this assurance away from United States growers without conferring corresponding benefits to Canadian producers, because even with reductions of 50 per cent in existing duties, we would still have been excluded from the United States market, at least until such time as the United States is placed on an import basis with respect to grains. When that time comes the whole position can be reconsidered and an outlet sought in that country for a part of our surplus production of grains.

A summary of the concessions granted to Canada shows that on the basis of the 1929 trade, Canada has secured:

Assurance of the continued free entry of goods, amounting in value at that time to $221,000,000.

Reductions in duties, $79,000,000.

Canada-U.S. Trade Agreement

Bindings at existing rates of duty, $8,000,000.

The total value of trade directly affected by the agreement, on the basis of 1929 volume amounts to $308,000,000.

There is a further large item which amounted in 1929 to $16,000,000, representing certain kinds of pulpwood, the continued free entry of which is assured by virtue of the trade agreement concluded between the United States and Sweden. Thus, the total volume of Canadian exports to the United States affected by the agreement is, on the basis of the 1929 figure, upwards of $325,000,000.

I have before me further proof of the benefits derived by Canada from United States concessions in connection with the binding on the United States free list of certain items, and in connection with the most favoured nation clause. However, I think I shall leave these for discussion until we are dealing with the trade agreement in greater detail.

The binding on the United States free list of twenty-one items of importance to Canadian trade is one of the most valuable features of the agreement. On many of these products there has been an intermittent agitation by interested parties for the imposition of a duty. The trade agreement gives assurance to Canadian exporters of these products that their trade will not be interfered with during the period of the agreement. In the case of newsprint especially, this should give a stimulus to the reorganization of the whole industry on a sounder footing. In 1934, Canadian exports of newsprint paper to United States were valued at over $60,000,000.

I should like to conclude by making the following references to the benefits to be derived by Canadian industry. There will be a benefit through the increased buying power of the Canadian public, with a consequent stimulus to Canadian industry. Markets in the United States will be opened to Canadian industry which had not that opportunity before. There will be cheaper means of production through reduced rates on machinery and implements of production, Canadian industry thus being placed on a more favourable competitive basis.

While granting the intermediate tariff to the United States will involve reductions in duties on United States products in the case of about 700 of the 1,400 items of the Canadian tariff, in very few cases can the reductions be said to be harmful. Here adjustments can later be made. It should be remembered that Canadian industries will retain, as regards the United States, the same measure of protection as has been obtained against the industries of nearly all foreign countries, including those

countries which are not only highly industrialized but with standards of living vastly below those prevailing in the United States.

The items on which Canada granted reductions in the rates below the intermediate tariff were carefully selected so as to give the maximum benefit to the Canadian consumer and user of machinery without causing injury to Canadian industry.

Canada retains entire freedom to adjust the rates of the intermediate tariff in respect to all items not included in schedule I of the agreement. This schedule comprises 180 items or less than 13 per cent of the total number of items in the Canadian tariff; in the ease of 86 items, provision is made for reductions in existing intermediate rates of duty; and in the case of 94 items, for the maintenance of existing intermediate rates of duty. During the three years' duration of the agreement, Canada may not increase the intermediate rates of these items.

The anti-dumping provisions of the Canadian tariff are still in effect and so far as values for duty are concerned the commitments have been made to the United States chiefly with a view to eliminating arbitrary executive interference with the normal course of trade. Full safeguards have been retained for dealing with abnormal situations and for protecting Canadian industries against the dumping by other countries of goods which are sold below fair market value in the country of origin, or below cost of production plus a reasonable advance for selling cost and profit.

There will be other and ampler opportunities for detailed exposition and discussion of individual rates of duty affected by the agreement, both on the resolution inviting the house to consider the agreement and on the bill giving its provisions the force of law in Canada. At this time, I desire only to refer in general terms to some of its larger effects on the Canadian economy. Basic primary industries, dependent upon accessible export markets for the profitable sale of a large part of their production, are once more enabled to enter the United States and guaranteed against a tariff increase on their products. By the very agreement that ensures them export markets, their production costs are appreciably lowered by the elimination or reduction of the duties on their implements of production. Similarly the ordinary inarticulate consumer, whose interests have been shamefully neglected, has already found out in lower prices and a wider range of choice what the agreement with the United States will mean to him: increased purchasing power of primary

Canada-US. Trade Agreement

producers, stimulated business for distributors and transport trades, lower costs of production generally and an increase in real wages through a reduction in many items of the household budget,-these are some of the ways in which the agreement is already making itself felt, and justifying our decision to spend every effort on achieving it.

*Let me add this in conclusion. While these are immediate benefits of a material kind, I do not think one can emphasize too strongly what it will mean, not only to the United States and Canada but to other countries as well, that a step has been taken on the part of these two nations in the direction of promoting trade on a mutually beneficial basis, at a time when the world has gone well-nigh mad as a result of pursuing the fallacies of economic nationalism. We have seen already how appreciatively this agreement has been referred to by the British press; we have seen that the example set by Canada and the United States in this regard may be followed shortly by a similar arrangement between Great Britain and that country. The French press has referred in appreciative terms of what it sees in this agreement as indicating a better day for the world in the matter of international trade. Other countries have made like favourable comments. I think we are quite justified in the belief that we on this continent have at last broken the hard crust of economic nationalism and have opened the way to a more extensive trade which will be of advantage to producers and consumers alike, which will assist our railways, will bring about an increase in purchasing power, and which may help very materially to lift our country out of the depression from which it has been suffering for so many years and to restore an era of prosperity and of better relations with other lands.

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Right Hon. R. B. BENNETT (Leader of the Opposition):

I do not suppose that

my hon. friends opposite would be prepared to concede to me the same degree of sincerity as they claim for themselves. If I say that I greatly regret that I cannot support this resolution, and that I regret this very sincerely, I state but the simple truth, and I shall give the reasons that have induced me to arrive at that conclusion.

I might point out, at the outset of my observations, which I shall endeavour to make brief, that the resolution is in terms of the exact one that was moved by myself in dealing with the United Kingdom agreement. The words are exactly the same, and those who are concerned, if they will look at Hansard of that day, will find that the then 12739-33i

Minister of Finance, at the conclusion of my remarks, moved the house into committee of ways and means in order that the details of the changes in the schedules might be considered. I do not know that any discussion of the procedure adopted will serve any useful purpose, but those who may be interested will find the record in Hansard of that day; and the opportunity thus afforded by the then Minister of Finance, in moving the house into committee of ways and means, of discussing the various schedules was quite as clear as the procedure that is now being followed. But surely the right hon. gentleman (Mr. Mackenzie King) is in error when he assumes that the adoption of this resolution does not in every detail mean the approval of the agreement; for all one has to do is to look at the language employed in the resolution itself, and there cannot then be the slightest doubt that those who approve that resolution accept, sanction and approve the agreement itself in every detail.

I should not like in any acrimonious sense to comment upon the observation of the right hon. gentleman as to the contrast between the action taken by myself now and that which he took in 1932. Will any of us ever forget his denunciation of that agreement as the work of a Tory conspiracy-a Tory conspiracy headed by the Right Hon. Stanley Baldwin, now Prime Minister of England, and aided and abetted by the Prime Ministers of all the overseas dominions? Those who care to read Hansard of that day and see the record of the long delays that ensued by reason of the discussion will readily realize the sense of irony which apparently the right hon. gentleman was aware of when he spoke of the assistance he gave in the passing of those agreements.

I am sorry, sir, that I must also deal, somewhat differently from the way in which the right hon. gentleman dealt with it, with the history of the parties in connection with reciprocity. Those who are familiar with the reciprocity agreement of 1854, which expired by notice in 1866, will possibly recall that when the 1878-79 budget was delivered by the Conservative party, through Sir Leonard Tilley, a provision was inserted in that budget that afforded the opportunity at all times to enter into an agreement with the United States for reciprocal treatment of natural products. In 1874 the Hon. George Brown negotiated an agreement, which by the way was never signed, but which in draft form was sent to the United States and never heard of again.

From that time on there was a constant effort to renew a reciprocity agreement. In

Canadri-U.S. Trade Agreement

the early nineties the United States embarked upon a policy of reciprocity and entered into reciprocity agreements with many countries. The Liberal party in 1887 declared for a form of commercial union which in 1891 culminated in an election on unrestricted reciprocity and brought forward the letter of the Hon. Edward Blake, in which he protested so strongly against the policy of his party that the matter is perhaps in the memories of most members of the house. In 1892, after the election, there went to Washington three Canadian delegates or plenipotentiaries to discuss and deal with the problem of reciprocity. They failed, because the United States was not prepared to grant to the government of that day or to any other government reciprocity in regard to natural products unless a substantial list of manufactured goods was also included in the agreement. So from 1S92 on the negotiations resulted in nothing. In 1896 a Liberal government came into office. A Democratic government was in power in the United States, and as I shall presently show, the Democratic party has been the enemy of reciprocity and not its supporter in days gone by. I shall read from an authoritative source on that point. When in 1S96 the Liberal government came into power and the Democratic government was in office there w'as not, for reasons given by the right hon. the Prime Minister, any opportunity afforded to Sir Wilfrid Laurier to negotiate or discuss reciprocity on any reasonable basis. With the advent to power, however, of a Republican administration the appointment of a commission headed by Lord Herschell was secured, and as members of that commission we had Sir Wilfrid Laurier, Sir Louis Davies, and many other illustrious Canadians. Our old friend the former member for Labelle, Mr. Bourassa, was one of the joint secretaries of that commission. They sat for months and held meetings at Quebec, but in the end they failed- and I shall give the language of the historian in that regard-and when it was all over, when Sir Wilfrid Laurier had finally concluded that failure was the only result that could follow from his efforts, he used these words:

There will be no more pilgrimages to Washington. We are turning our hopes to the _old motherland.

Those are the words of Sir Wilfrid Laurier when failure resulted from the operations of the joint high commission. He then turned his attention to the motherland, and in 1907, as those who are familiar with the proceedings of the imperial conference of that day will remember, he made strong, increasingly strong *

efforts to secure a preference for Canadian goods in the British market. Mr. Dealcin of Australia was foremost in his advocacy of that policy. But Mr. Asquith, Mr. Churchill and Mr. Lloyd George pointed out that it was impossible of realization, and so after that conference Sir Wilfrid Laurier and the government of that day once more turned their attention to the United States of America.

Therefore it is fair to say that from confederation down to 1911 there had been a constant effort on the part of all parties in Canada to secure a measure of reciprocal trade with the United States of America. So far had that effort gone that the Liberal party in 1887 and in 1891 had actually urged unrestricted reciprocity or commercial union. Many letters and communications have been published since from Sir Wilfrid Laurier to Goldwin Smith, and letters from Goldwin Smith reciting the views held by Sir Richard Cartwright and Sir Wilfrid at that time. The acute differences within the Liberal party showed that there were at that time many people in public life who shared the views of the Hon. Edward Blake.

In 1911, under circumstances that need not now be gone into fully, instead of Canada seeking an agreement with the United States, the United States in truth sought one with Canada. That agreement included some natural products. It also included a substantial number of manufactured products. In addition to that it provided, not that these matters should be carried into effect by agreement, but rather that this should be done by joint action, that is by the congress of the United States enacting its tariff act and the Dominion of Canada enacting an exactly similar act. A number of items were dealt with favourably or preferentially by both countries, but it must not be overlooked that that agreement could be terminated by a change in tariff incidence of a single item. That was one of the reasons strongly urged against the agreement. Further, as the right hon. gentleman has said, many of us objected to it because of its uncertainty, its instability, and the direct effect it had upon the development of north and south, as against east and west routes upon which we had expended such vast sums of money and created so many lines of transportation.

At any rate the Conservative party opposed that agreement. But it was not alone in that regard. Distinguished Liberals throughout Canada-many of them, thousands of them- joined with the Conservative party of that day. Unless they had done so, undoubtedly the agreement would not have been defeated.

Railway Act-Rates on Grain

As I pointed out then, the uncertainty was such that a change in a single item wrecked the whole, and it was competent for either parliament on the one hand or congress on the other, by changing a single item in that list, thus to terminate the agreement. I need hardly point out that the war followed in 1914, and it would have been impossible during the war to maintain that arrangement in the terms in which it stood. Therefore, so far as we are concerned there was a period of time, 1912 and 1913, when the agreement might have remained in force; but whatever party was in power in Canada could not possibly have maintained the agreement during the period of the war. I think that is common ground, admitted by every fair and impartial observer or student of our political history.

Topic:   ANALYSIS OF CONCESSIONS GRANTED TO CANADA BASED ON UNITED STATES IMPORTS FROM CANADA-CALENDAK YEAR, 1929
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February 25, 1936