May 21, 1951

LIB

Clarence Decatur Howe (Minister of Defence Production; Minister of Trade and Commerce)

Liberal

Mr. Howe:

May I ask the hon. member a question before he reads from the London Times? Are they discussing the effect on Canada or the effect on England?

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

The minister will have to make up his own mind. I think they are discussing mainly the effect on Canada.

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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LIB

Clarence Decatur Howe (Minister of Defence Production; Minister of Trade and Commerce)

Liberal

Mr. Howe:

Why would the London Times be concerned about Canada? It is not their custom.

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

The minister may not know it, but they are still part of the British commonwealth. At any rate, they seem to be concerned.

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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LIB

Clarence Decatur Howe (Minister of Defence Production; Minister of Trade and Commerce)

Liberal

Mr. Howe:

That is a smart answer.

Trade Agreements

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

I read from the London Times:

As a result of seven months of negotiations at Torquay (which are the subject of a white paper issued yesterday) the general agreement on tariffs and trade is to remain in force for another three years. This means that the reductions of import duties and the other measures to remove restrictive practices in international trade which were agreed upon at Geneva and Annecy are now renewed until 1954. This was no foregone conclusion. By the beginning of 1950 many European countries were restoring their protective duties to at least the prewar level. There was growing-and, in the end, successful-opposition in America to the Havana charter for an international trade organization. It is a matter for some congratulation that the effort to bring about freer world trade is to be continued after all.

So that they gleaned some comfort-perhaps not a great deal-out of the results. Then they go on to point out that there are some gains. I read again from the London Times:

The Torquay negotiations have achieved some new reductions in customs duties, and some new countries-above all, western Germany-have been brought into the general agreement.

Then they make a comment which I think is an extremely shrewd one. They say that probably one of the reasons that even a modicum of success was achieved was this, and I think this is a shrewd comment:

Probably the return of the sellers' market since the spring of last year is largely responsible; it has again dulled the edge of competition, and for the time being, fewer manufacturers feel the need for protection.

I suppose there is a certain amount of truth in that, and it raises in one's mind the question whether the period of active trade and of seller's market is not one which if at all possible should be availed of for the purpose of doing away with more restrictions.

Then they go on to speak about the imperial preference, and they have one or two things to say about that which I think are important. They had one very interesting comment, namely, the difference in attitude of the United States as between imperial preference and the Sohuman agreement. I was interested in that partly because I was at Strasbourg last summer when they were discussing the Schuman agreement. I will read again from the Times because I think they put it very well. They say:

Any failure in commercial negotiations with America is to be regretted. It had been hoped 1bat some valuable concessions which would have aided the increase of sterling sales in the chief dollar market might have been obtained. The Americans asked for concessions in return which the British government were not prepared to make, and they were above all anxious for a further reduction of imperial preferences. They wished to make arrangements with the members of the commonwealth one by one, for reducing the preferences which they give, without consulting the other member countries who benefit from them. This

approach was rejected. With some reservations, all the proposed reductions of imperial preferences have been discussed by all the commonwealth countries concerned and in the end very few concessions have been made. The chief changes have come out of negotiations between Canada and the United States; they are a token of the strong natural attraction of trade over the Canadian frontier-and possibly also of Canadian disappointment over the restricted market afforded for Canadian goods in this country.

I think the minister, even though he does not think that the Times should have any interest in this matter, may agree that their comments are not without a certain amount of common sense. I will read on, because again I think the points are so well made that they cannot be improved on:

The American attitude in these negotiations has reflected the difficulties of the American government over the renewal of the reciprocal trade act and the bill for the simplification of the tariff. Rather than accept the amendments by the house of representatives to the reciprocal trade act the president may use his veto.

Later on this comment touches on the difference in the relation between preference and tariff, and puts it in what I thought was a rather pointed way. It says:

In view of the present uncertainties this country must weigh with the utmost care the obligations which are imposed upon it by the general agreement. This is especially necessary now because the next meeting of the members in the autumn may be concerned with trying to give permanent form to the present temporary organization.

If a permanent organization is to be set up, this country cannot allow the status of preferences to be left, as it is at present, inferior to the status of tariffs. The illogicality of the American attitude to imperial preference is illustrated by the American support of the Schuman plan,-

Hon. members will recall that the Schuman plan is that much discussed plan proposed by Schuman of the French government in an attempt to integrate particularly French and German, and also other minor European countries', iron and steel industries. Last summer it looked as though it was likely to break down because of lack of sympathy from Britain; but by reason of recent changes which they have made, it now seems likely to succeed. I continue:

The illogicality of the American attitude to imperial preference is illustrated by the American support of the Schuman plan, which sets out to create a new free trade area in Europe and is at least as likely to hinder as to help the more general extension of freer trade. Certainly, Europe cannot be regarded as a more satisfactory economic unit than the commonwealth; the countries of the commonwealth, in fact, are naturally still more complementary than are the predominantly industrial countries of western Europe.

There is one further quote I wish to make because it is on the same point. It says this, speaking again of the American attitude towards the Schuman plan:

The cause of freer trade can only be hampered by illogical and one-sided distinctions of this sort;

and if the Schuman plan is a portent and the future lies not with many-sided free trade but with regional pacts, then the preservation of the bonds within the commonwealth will become even more vital for this country than it already is.

Now, Mr. Speaker, I have read these extracts because it seems to me that the points which they raise are very practical, and they are particularly underlined by reason of what the leader of the opposition said this afternoon regarding the meeting of Canadian businessmen and their desire to have a conference on commonwealth trade. The setting up of this free trade area in Europe, if that is what it comes to be, may actually hinder rather than help the task of freeing world trade.

Of course, there is another thing which comes into this, and which I should like to refer to briefly, namely, the everlasting question of bulk trade agreements. That of course is one of the things that bother them in Britain, and it is one of the things that bother us here. The Minister of Trade and Commerce, if you can still refer to him in that way, said very frankly when w'e were talking about the wheat agreement-I think it was the wheat agreement we were discussing in this house some weeks ago-"If we had known four or five years ago as much as we know now we might not have done quite the same thing." I should like to read a short extract from the Free Press again, which shows what they feel the international wheat agreement is doing to the growth of wheat in western Canada. It reads:

According to farmers' present seeding intentions it is down by-

That is the wheat acreage. I continue:

According to the farmers' present seeding intentions it is down by more than 700,000 acres or nearly three per cent.

Then later on they say:

But in the main the explanation is simply this: The other crops are offering the farmer the chance of making more money. Their price has improved, responding as it does to the influences that make themselves felt in a free market. As compared with this time two years ago, the price of oats is now 14 cents higher; barley is four cents higher; rye is 87 cents higher and flax is 82 cents higher. But wheat on the other hand is 14 cents lower.

I mention that because it has often been mentioned in the house before in the discussions within the last few days. There is one other point I should like to raise, which seems to become prominent. It was made prominent first of all, as I recall, by the Minister of National Defence (Mr. Claxton) in the speech he made on March 30 to the American arbitration association, if I remember rightly. At that time he referred with disappointment-indeed I think I 80709-2061

Trade Agreements

might say distress-to the very small amount of American munition orders, or orders in connection with the essential program, which are being received in this country. I think at that time he said $17 million only. I know that just the other day the Minister of Defence Production (Mr. Howe) said-I am not sure whether the figure he gave is strictly comparable-that we had got orders for something like $25 million worth of equipment. The minister shakes his head.

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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LIB

Clarence Decatur Howe (Minister of Defence Production; Minister of Trade and Commerce)

Liberal

Mr. Howe:

It is much larger than that.

You had better not use it. You cannot quote it.

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

I had

better get what the minister said, and he can correct me if he wants to. In passing I notice one interesting thing. The minister pointed out the difference between manufacturing for defence at war, and when we are not at war. He said, speaking of peacetime demand and wartime demand:

At the present time, we have no such demand and we must think in terms of say vehicle production at the rate of about five a day, rather than the hundreds a day we produced last time.

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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LIB

Clarence Decatur Howe (Minister of Defence Production; Minister of Trade and Commerce)

Liberal

Mr. Howe:

Where did he say all this and when?

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

This is very interesting. This is an address by the Right Hon. C. D. Howe-that is the minister, I take it-at Ottawa on May 14, 1951. Does the minister not think he said these interesting things?

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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LIB

Clarence Decatur Howe (Minister of Defence Production; Minister of Trade and Commerce)

Liberal

Mr. Howe:

But I do not.know what it has to do with this House of Commons.

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

I just threw that in. I have been looking for that figure, and when I find it I shall bring it to the minister's attention.

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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LIB

Clarence Decatur Howe (Minister of Defence Production; Minister of Trade and Commerce)

Liberal

Mr. Howe:

Write me a letter about it.

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

The minister and I always agree, in the end, although we often look as though we disagreed.

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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LIB

Clarence Decatur Howe (Minister of Defence Production; Minister of Trade and Commerce)

Liberal

Mr. Howe:

The assistant financial critic, the boy clerk!

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

The last

thing I wish to say is just to point out that we, in the past, have tried to have discussions on the matter of the imperial preference and trading relations within the empire. In fact, we tried it about a year ago, in February of 1950, but at that time our friend the Minister of Finance (Mr. Abbott) in a rather offhand way said that he did not think there was much use in it-

Frankly, however, I do not think the trading problems of the world are going to be solved by simply calling another conference.

Trade Agreements

Anyway, another conference was called, and we can agree with him that it has not solved the problem yet. Then he goes on:

I for one do not like to either initiate or attend a conference unless I know exactly what we are going to talk about.

I hope the minister makes an adequate study of what happened at Torquay, and that perhaps he would read part of my speech so that he would know exactly what we think should be talked about. Then he goes on to say:

While I have no doubt it will be found desirable to hold further conferences to discuss trade matters, I do not know that the holding of a full-fledged commonwealth or empire conference at this time would add very much to the knowledge of this or any other member of the commonwealth in reference to specific solutions which can be found for these trade difficulties.

I hope the minister and the government will reach a very different view, in view of the frank opinions of something near failure of the Torquay conference, such as I have read from the Winnipeg Free Press and, to a lesser extent, from the London Times. The leader of the opposition (Mr. Drew) has indicated a strong desire from most responsible and reputable quarters for such a conference, and I hope with all my heart that this great and important question will not be allowed just to drift any further.

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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CCF

Wilbert Ross Thatcher

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

Mr. W. Ross Thatcher (Moose Jaw):

Mr. Speaker, I believe in freer trade-I always have, and I hope I always shall. So far as this Torquay agreement goes-well, certainly I do not think any member in the house could find very much objection to it. Whatever steps they have taken must be accepted as progress, although we may be disappointed in the degree of that progress. I think, indeed, that everyone has been disappointed.

This would include even the chairman of the Canadian delegation, Mr. Wilgress, who, according to a Reuters dispatch, said on April 21 that the results were not as great as many had hoped, and pointed out that governments had been hesitant about agreeing to substantial reductions in duties.

As I understand, the chief disappointment in the agreement is that Great Britain and the United States could not get together in a sort of tariff-lowering pact. Had they been able to do that, other countries automatically would have benefited. We had all hoped there would be a kind of softening of the lines of division between the sterling and dollar areas. Instead however I think it is correct to say that those lines have been hardened; and every hon. member knows the implications that has for Canada.

I believe I am safe in saying that United States tariffs were the first and chief targets

of the Canadian delegation at the conference. One of my first criticisms is that the United States out-negotiated and out-bargained us at Torquay. I should like to develop that point at eight o'clock, and for that reason I would ask that you call it six o'clock, Mr. Speaker.

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

Mr. Speaker, I rise to a question of privilege, in order to bring a figure to the attention of the Minister of Defence Production (Mr. Howe). The figure of $25 million to which I referred is for the production of the plants at Sorel and Longueuil. The minister's words were:

These plants are already committed to produce some $25 million worth of guns for the United States navy.

What the minister does not say is that that is all we are getting.

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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LIB

Clarence Decatur Howe (Minister of Defence Production; Minister of Trade and Commerce)

Liberal

Mr. Howe:

Is it all we are getting?

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell (Greenwood):

I am saying that.

Topic:   TRADE AGREEMENTS
Subtopic:   TORQUAY NEGOTIATIONS
Sub-subtopic:   MATTER TO BANKING AND COMMERCE COMMITTEE
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May 21, 1951