Right Hon. C. D. Howe (Minister of Trade and Commerce):
Mr. Speaker, I wish to make a statement with respect to the export of Canadian oats to the United States.
Hon. members will recall that earlier this year President Eisenhower directed the United States tariff commission to make an investigation under section 22 of the Agricultural Adjustment Act for the purpose of determining whether oats are being or are practically certain to be imported into the United States under such conditions and in such quantities as to render or tend to render ineffective or materially interfere with the price-support program undertaken by the United States Department of Agriculture. Although it would not have been appropriate for the Canadian government itself to appear before the United States tariff commission on this occasion, representations were made to the commission by Mr. George Mclvor, chief commissioner of the Canadian wheat board, on behalf of western producers who sell oats to the United States through the board. From time to time members of the Canadian government have expressed to members of the United States government grave concern about the adverse effects on relations between the two countries of a decision to limit imports of Canadian oats into the United States.
We have now been advised that the tariff commission has made its report to the President and that this report recommends restrictions on imports of oats into the United States. It was, of course, hoped that the President would not find it necessary to act upon this report. It can be taken for granted that both governments wish, if possible, to avoid getting into restrictions and counterrestrictions.
President Eisenhower immediately requested our co-operation toward the solution of this exceptional and urgent problem and we discussed the matter with representatives of the United States administration who came to Ottawa to discuss this subject as well as plans for the forthcoming meeting of the joint United States-Canadian trade committee. The
United States officials outlined the problem resulting from imports of a commodity which was being acquired by the United States government under its price-support policy. We, on our part, outlined the problems that would be created for Canada by the imposition by the United States, for an indefinite period, of import controls on such an important commodity as oats.
We understood their problem; I believe they understood ours. Having in mind the extremely serious consequences which would result to both countries from the imposition of import controls on oats into the United States, consequences extending beyond trade in oats and extending far into the future, we reached a temporary arrangement whereby Canada undertook to limit exports of oats to the United States to a reasonable quantity for a relatively short period.
I shall now read the text of the letters exchanged between our two governments: Washington, December 7, 1953 The Honourable L. B. Pearson,
Secretary of State for External Affairs,
My dear Mr. Secretary,
During the past several months, the government of the United States has been faced with problems of increasing seriousness in connection with the accumulation of surplus agricultural products. These mounting surpluses, and the financial burden they entail, may well threaten to disturb orderly marketing arrangements which it is to the interest of both Canada and the United States to maintain.
The special circumstances affecting the problem of oats make it a matter of particular urgency requiring exceptional treatment. We believe that unless steps are taken to assure that imports of oats will not be such as to interfere with the orderly marketing of oats in the United States, a critical situation will develop which could be damaging to the farming industry of our two countries. It is our suggestion that shipments of oats from Canadian ports of shipment to the United States should not exceed 23,000,000 bushels during the period from midnight December 10, 1953, to midnight September 30, 1954.
As you know, Canada supplies almost the whole of the United States imports of oats and only small quantities come from other countries.
You are of course aware that the larger problem associated with accumulations of surplus agricultural products and related questions of agricultural policy are currently under review with the aim of arriving at longer-term solutions of a constructive character.
Having in mind the desirability of maintaining, as in the past, the closest collaboration between the governments of Canada and the United States in matters of common concern, President Eisenhower has asked me to seek the co-operation of the Canadian government in this matter. The President is
most anxious that a solution be found which will cause the least possible damage to trade relations between our two countries.
W. Bedell Smith,
Acting Secretary of State.
Ottawa, December 10, 1953. The Honourable W. B. Smith,
Acting Secretary of State,
My dear Mr. Acting Secretary,
The government of Canada has given careful consideration to your letter of December 7th regarding the urgent situation which is giving concern to your government with respect to the marketing of oats. The Canadian government attaches the greatest importance to the extension of mutually profitable trade between our two countries and to avoidance of restrictions which would interfere with such trade. However, in a desire to meet President Eisenhower's request for co-operation in a solution to this urgent problem, the Canadian government has decided, as a temporary measure, and without obligation, to take all practicable steps to limit shipments of Canadian oats to the United States to the extent and for the period suggested in your letter. In taking this action, the Canadian government is aware of the fact that your government is now reviewing its agricultural policies with a view to finding longer-term solutions of a fconstructive nature.
The Canadian government takes note of the information in your letter, that Canada supplies almost the whole of the United States imports of oats and only small quantities come from other countries. The Canadian government wishes to make clear that it will reconsider the decision set forth in this letter in the event that substantial quantities of oats are imported into the United States from other countries during the period in question. The Canadian government assumes that in this event the government of the United States will itself also wish to review the situation.
Acting Secretary of State for External Affairs.
Hon. members will note that Canada has undertaken to limit the shipment of Canadian oats to the United States to 23 million bushels during the period from midnight December 10, 1953, to midnight September 30, 1954. Such a limitation is not desirable and has only been undertaken by Canada as the lesser of evils. Nevertheless, it is not a limitation which should cause significant concern to the producers of oats during the short period that it is in effect. Oats are not in over-abundant supply in Canada. The 1953 crop was 61 million bushels less than in 1952. Domestic demand is strong and exports since the opening of the crop year have been heavy. Assuming that the 23 million bushels do move to the United States, the quantity of 1953 oats on hand when the 1954 crop begins to move is likely to be smaller than the quantity on hand at the same time in 1953.
Our government is not at all happy about a situation of this kind, which can only be resolved by measures which are contradictory of the principles upon which trade has been
developed between Canada and the United States. It has been the hope of the Canadian government that the United States government would, in its own interest, and in the interests of the free world, decide not to impose any further restrictions on imports. We may take encouragement from the announced intention of the United States government to review its agricultural policies in an attempt to find longer-term solutions of a constructive nature.
Perhaps it will be said that on this occasion we should have refused to co-operate. We weighed the risks and came to the conclusion that, since we could without significant harm to our exports enable the United States government to surmount what may prove to be a temporary difficulty, we should meet their wishes. There is no undertaking by Canada beyond September 30, 1954.