March 9, 1948

ANNOUNCEMENT OF INTERNATIONAL AGREEMENT -STATEMENT OF BASIC TERMS


On the orders of the day:


PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. JOHN BRACKEN (Leader of the Opposition):

Mr. Speaker, a day or two ago a statement appeared in the press and I believe a release was made by the Department of Trade and Commerce with respect to an international wheat agreement. Might I ask the Minister of Trade and Commerce if he expects to make any statement to the house with respect to that agreement?

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LIB

Clarence Decatur Howe (Minister of Trade and Commerce; Minister of Reconstruction and Supply)

Liberal

Right Hon. C. D. HOWE (Minister of Trade and Commerce):

Mr. Speaker, the public announcement came on a Saturday at noon and I felt that the logical step would be to follow the practice in the United States and make the announcement through a press release. I would be pleased to put a statement on Hansard tomorrow. I had a statement here yesterday which I expected1 to put on Hansard but I am sorry I have not got it here today.

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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

Will the minister make a statement tomorrow?

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LIB

Clarence Decatur Howe (Minister of Trade and Commerce; Minister of Reconstruction and Supply)

Liberal

Mr. HOWE:

I will, yes.

[Later:}

On the orders of the day:

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LIB

Clarence Decatur Howe (Minister of Trade and Commerce; Minister of Reconstruction and Supply)

Liberal

Right Hon. C. D. HOWE (Minister of Trade and Commerce):

M

Agreement has been reached among the representatives of thirty-six countries on the terms of an international wheat agreement, which was opened for signature in Washington last Saturday. The agreement is in the nature of a multilateral bulk contract and contains the following basic terms:

1. Operation for a period of five crop years, commencing August 1, 1948.

2. Prices on specified quantities to be within the following price ranges, basis No. 1 Manitoba wheat in store Fort William-Port Arthur:

1948- 49

$2.00-$ 1.501949- 50

2.00- 1.401950- 51

2.00- 1.301951- 52

2.00- 1.201952- 53

2.00- 1.10

Equivalent prices are to be fixed on wheat in other locations and in other countries.

3. Canada, United States and Australia, the three exporting countries party to the agreement, collectively undertake to sell 500 million bushels of wheat to the thirty-three importing countries if required1 by those countries at the ceiling prices. Canada's share in the 500 million bushels is 230 million bushels, the United States' share 185 million bushels, and the Australian share 85 million bushels. The importing countries in return collectively undertake to purchase 500 million bushels of wheat each crop year from the three exporting countries if the latter desire a market for that quantity at the floor prices provided in the agreement. These quantities include flour in terms of wheat.

4. Provision is made for the negotiation of narrower price ranges in the third, fourth and fifth years of the agreement if mutually acceptable to the exporting and importing countries; otherwise the floors and ceilings as stated above for these years will prevail.

5. The importing countries and the quantities they undertake to purchase at the floor prices and have the right to buy at the ceilings, are as follows, in thousands of bushels.

Afghanistan 735

Austria 18,739

Belgium 23,883

Brazil 19,290

China 14,697

Colombia 2,205

Cuba 8,267

Czechoslovakia 1,102

Denmark 1,470

Dominican republic 735

Ecuador 1,102

Egypt [DOT] 6,981

French union and Saar 35,824

Greece 18,739

Guatemala 367

India 27,557

International Wheat Agreement

Ireland 13,227

Italy 36,743

Lebanon 2,756

Liberia 37

Mexico 7,349

Netherlands 30,680

New Zealand 5,511

Norway 7,532

Peru 4,042'

Philippines 6,246

Poland 1,102

Portugal 4,409

South Africa 6,430

Sweden 2,756

Switzerland 7,349

United Kingdom 179,930

Venezuela 2,205

The quantity for the United Kingdom includes requirement for British territories such as Newfoundland and1 the British West Indies. I would point out that the three exporting countries in return for selling 500 million bushels of wheat annually at prices not above $2 over the next five years have secured international floor price protection for their producers over the same period. Canada's quantity of 230 million bushels represents her total normal exportable surplus. The importing countries in return for guaranteeing floor prices had assured themselves fixed supplies at prices not over $2. Although Argentina and the U.S.S.R. are not parties to the agreement, whatever wheat transactions take place between these exporters and the signatory importers must 'be in addition to the importers' undertakings within the agreement. Canada, the United States and Australia remain free to sell any additional quantities they may have for sale outside the terms of the agreement. By balancing the interests of both producing countries and consuming countries in an agreement covering the bulk of the world's trade in wheat, the agreement represents a major development in international economic co-operation.

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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

I have one suggestion to make and two or three questions to direct to the minister arising out of his statement with respect to the agreement. When can the minister let the house see a copy of the details of the agreement? I would suggest that it be tabled.

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LIB

Clarence Decatur Howe (Minister of Trade and Commerce; Minister of Reconstruction and Supply)

Liberal

Mr. HOWE:

Yes, I shall be glad to table the agreement as soon as I receive a copy. My hon. friend will understand that while it has been initialled by the thirty-three countries, it is open for formal signature until June I,

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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. COLDWELL:

May I ask a supplementary question? Will this agreement be placed before the house for ratification?

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LIB

Clarence Decatur Howe (Minister of Trade and Commerce; Minister of Reconstruction and Supply)

Liberal

Mr. HOWE:

I would think that that would be the procedure. The government has initialled the agreement, and I think before it is formally signed it will be placed before the house for ratification.

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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

The minister has partly answered one question that I had intended to raise. I understand that the agreement has been signed by an official representing Canada, but not by the government. Does the fact that he has signed the agreement carry the approval of the government to the agreement? There are two other questions I wish to ask. Can the minister say what progress, if any, has been made towards getting Argentina and the U.S.S.R. into this arrangement? And will this agreement make necessary a review of the United Kingdom wheat agreement?

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LIB

Clarence Decatur Howe (Minister of Trade and Commerce; Minister of Reconstruction and Supply)

Liberal

Mr. HOWE:

In reply to the first question, as to whether initialling by a government official has the approval of the government, the government duly authorized the official to initial the agreement as representative of the government.

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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

Then it does carry the approval of the government?

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LIB

Clarence Decatur Howe (Minister of Trade and Commerce; Minister of Reconstruction and Supply)

Liberal

Mr. HOWE:

Yes. The second question was whether Argentina and Soviet Russia have been approached. No. They declared their lack of interest in the agreement a year ago and that has been accepted. What was the third question?

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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

Will this make necessary a review of the United Kingdom wheat agreement?

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LIB

Clarence Decatur Howe (Minister of Trade and Commerce; Minister of Reconstruction and Supply)

Liberal

Mr. HOWE:

Yes. That is proceeding.

Discussions are taking place at the present time-not a review, but certain adjustments.

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CCF

Hazen Robert Argue

Co-operative Commonwealth Federation (C.C.F.)

Mr. ARGUE:

May I ask the minister a supplementary question? Is the price yet to be negotiated under the United Kingdom wheat agreement for the 1949 crop to be limited by the $2 per bushel ceiling in the international agreement ?

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LIB

Clarence Decatur Howe (Minister of Trade and Commerce; Minister of Reconstruction and Supply)

Liberal

Mr. HOWE:

The agreement was initialled subject to an understanding with the United Kingdom that the initialling of the agreement would be without prejudice to the settlement of the present United Kingdom-Canada wheat agreement. Discussions that will lead to a settlement or a basis for settlement are now proceeding.

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SC

Robert Fair

Social Credit

Mr. FAIR:

May I ask the Minister of Trade and Commerce whether the $2 ceiling on wheat will remain in effect regardless of the cost of production of that wheat?

Inquiries oj the Ministry

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March 9, 1948