May 24, 1963

PRIVILEGE

MR. DIEFENBAKER INFORMATION RESPECTING NATO NOT GIVEN TO PARLIAMENT


Right Hon, J. G. Diefenbaker (Leader of the Opposition): Mr. Speaker, I rise on a question affecting the privileges of this House of Commons. The NATO council meeting has continued for a couple of days. Parliament has not received any information whatever regarding the stand taken by Canada, yet the press from day to day contains statements. Last night's Canadian Press sets out the following: The way has been cleared for the creation of an Atlantic alliance with nuclear strike forces with Canada one of the contributing countries. Today NATO foreign ministers switched their attention to world trouble spots. General agreement on the basic idea of the type of force to be built initially around Polaris-firing submarines and British long range bombers was reached. Mr. Speaker, I am informed that the press is regularly given information by the Secretary of State for External Affairs and by the minister of defence. This information is not made available to parliament. I will say no more at this time except that this constitutes a derogation from the rights of parliament. Controlled news is something which should not exist in this parliament.


GATT-REPORT BY MINISTER ON RESULTS OF CONFERENCES

LIB

Mitchell William Sharp (Minister of Trade and Commerce)

Liberal

Hon. Mitchell Sharp (Minister of Trade and Commerce):

Mr. Speaker, I was asked yesterday if I would give a report on the discussions that took place in London and Geneva in connection with the general agreement on tariffs and trade. I should now like to do so.

As hon. members are aware, the meeting of the economic consultative committee took place in London on May 13 and 14 just before the meeting of trade ministers held in Geneva under the auspices of the general agreement on tariffs and trade from May 16 to 21. I beg leave first to table copies of the communique issued at the conclusion of the commonwealth meeting, and of the resolutions and other conclusions adopted by the trade ministers in Geneva.

28902-5-16J

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Maurice Bourget (Speaker of the Senate)

Mr. Speaker:

Is it agreed that the minister have leave to table these documents?

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Some hon. Members:

Agreed.

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LIB

Mitchell William Sharp (Minister of Trade and Commerce)

Liberal

Mr. Sharp:

At the London meetings, Mr. Speaker, I was impressed by the variety of the modern commonwealth. It seems to me that this is a reflection of the modern world, the free world at least. The whole spectrum of needs and aspirations is represented in the commonwealth. We have Britain, a highly industrialized country, Canada and Australia which are major exporters of agricultural and primary products as well as manufacturers of more limited scale, and New Zealand almost entirely dependant on agriculture. I was impressed with the fact that the modern commonwealth includes a majority now of newly independent countries only recently embarked on the process of development and diversification.

It was a rewarding experience for me to meet the trade ministers of these commonwealth countries, the new as well as the old. In London we were able to discuss in the unique and understanding atmosphere of commonwealth meetings that is familiar to so many of us the interests and approaches of the different members to the major current issues of trade and development.

Three main questions were on the agenda. First, the expansion of the trade of the developing countries; second, world trade in agricultural products, and third the proposal for a further major round of negotiations to reduce tariffs and other barriers to world trade. At the meeting there was also an opportunity to review the situation in Europe and to hear from the British ministers about developments since the termination of the Brussels talks.

All the ministers recognized the continuing significance of commonwealth trade. We were also agreed on the need for a general expansion of world trade and on the importance of this for all commonwealth countries.

As hon. members will see from the text of the communique which I have just tabled, the needs of the less advanced countries of the commonwealth received full recognition, and Canada joined with other members of the commonwealth in promising our support for action to help meet these needs, both at the subsequent GATT ministerial meeting

Report on GATT Conference and at the forthcoming United Nations conference on trade and development, the preparatory committee for which is now meeting in Geneva.

At the GATT meeting in Geneva the purpose was to come to grips on a world wide basis with the three major trade problems discussed in London. These problems are difficult and complex, and many conflicting interests remain to be resolved in the long negotiations that lie ahead. Nevertheless the countries concerned have agreed to come to the negotiating table and a start will be made. This was a tremendous and heartening achievement.

For the developing countries decisions were taken to facilitate expansion of their trade, and machinery had been established to keep their problems in the forefront of the negotiations and of GATT discussions. But on many points views differed as to the best way to proceed, notably between the European economic community and the overseas countries associated with the community on the one hand, and the developing nations in the commonwealth and elsewhere in the world on the other.

These differences are reflected in the documents I have tabled. But there was no disagreement on the urgency and fundamental importance of moving to help all these countries to meet the challenges of their development and the fundamental need to improve the lot of their peoples. Aid is clearly not enough. Financial and technical assistance must be accompanied by better opportunities to trade and other measures to facilitate the expansion and stability of the export earnings of these countries.

The Geneva conference of GATT was the fifth meeting of GATT ministers since the general agreement was signed in 1947, and the chief purpose of this meeting was to initiate a major negotiation for the reduction of tariff and non-tariff barriers to trade. The new United States authority to cut the protection surrounding the United States market made these negotiations possible. The power contained in the trade expansion act to reduce most United States tariffs by half and to remove duties that are 5 per cent or less is both imaginative and far reaching. It provides more scope to reduce American protection than has been available for many, many years.

The proposal for new and substantial negotiations, the so called Kennedy round, was strongly supported by Canada, by Britain and by many other countries whose interest lies in the expansion of world trade. The meeting agreed that negotiations should be

joined and that they should cover trade barriers of all kinds and all sectors of trade.

Agreement was also reached that the negotiation plan should be based on the principle of equal across the board tariff reduction subject to certain exceptions and subject to the working out of procedures to narrow differences in tariff levels between major industrial powers where these have significant effects on trade.

As hon. members will be aware from the newspaper reports that came back from Geneva, many days of negotiations between the United States and the European economic community were necessary before the final formula affecting the principle of negotiation was agreed upon.

I made it clear that for Canada such a formula of tariff reduction would not yield the necessary mutuality of trade and economic benefit. I indicated that for a country like Canada, with its limited domestic market, its patterns of production and trade and its relatively narrow range of exports, it would be difficult to find any single formula that would achieve the necessary balance of advantage. I assured the meeting, however, that Canada would play its part and make concessions in Canadian tariffs commensurate with the benefits we receive.

The conclusions of the meeting cover the position of Canada and certain other countries in a somewhat similar position. I should like to quote these provisions so that members of the house will understand how the negotiations concluded. The conclusions provide that the tariff negotiations committee which was established at our meeting shall deal with, inter alia, and I quote:

The problem for certain countries with a very low average level of tariffs or with a special economic or trade structure such that equal linear tariff reductions may not provide an adequate balance of advantages.

In his statement which forms an integral part of the conclusions of the meeting the chairman of the GATT ministerial meeting stated that pursuant to this paragraph, and I quote:

The committee will deal with the case of certain countries where it is established that their very low average level of tariffs or their economic or trade structure is such that the general application of equal linear tariff reductions would not be appropriate. For such countries the objective shall be the negotiation of a balance of advantages based on trade concessions by them of equivalent value, not excluding equal linear reductions where appropriate.

In addition, the chairman was asked during the concluding meeting whether the words "special economic or trade structure" in the resolution covered the special situation of a country which, it is established, has a very

large dependence on exports of agricultural and other primary products, and the chairman replied that this was the case.

I am satisfied that the United States and our other major trade partners fully understand Canada's position.

World trade in agricultural products presents particularly difficult problems. The normal trade rules have not been applied here, and efficient agricultural exporters like Canada have faced much frustration. It is significant therefore that agreement was reached in Geneva, including agreement by the European economic community, that agriculture shall be included in the negotiations. There is no doubt a settlement will be difficult to find, but with so much at stake, particularly with respect to wheat and other cereals, I can assure hon. members that the representatives of Canada at the forthcoming discussion will make every effort to ensure that these negotiations succeed. There are to be early meetings to discuss cereals and meats and a special group has been set up for dairy products.

These discussions may lead to new or revised international commodity arrangements.

In this connection, I would draw the attention of the house to the statement made Wednesday of this week in the British House of Commons by Mr. Christopher Soames, the minister of agriculture. I should also draw the attention of hon. members to the speech made by Lord Amory, which is on the same subject, reported in the Globe and Mail this morning. Mr. Soames forecast important changes in British agricultural support and import policies, and indicated British willingness to participate in further negotiations of international arrangements for temperate foodstuffs. I had the opportunity to discuss these matters with Mr. Soames, and we look forward to working closely with Britain, other importers and our fellow exporters of cereals and other products in the negotiations which are scheduled to open immediately.

Agreement at Geneva on the major points that I have mentioned was by no means easy. Much remains to be done and many difficulties overcome before there can be confidence that the various negotiations will yield a substantial and positive result. The stage has, however, been set for further progress if there is real willingness to make the negotiations a success. We propose, and I am now speaking in the name of Canada, to play a full and active part.

A busy timetable for negotiations has been agreed. In addition to the agricultural groups

Report on GATT Conference I have mentioned, a tariff negotiations committee will meet with a first task of working out the detailed negotiating rules by August

1. These preparations are to lead up to a major trade conference opening on May 4 of next year, which will bring together the various elements and carry the negotiations forward toward completion. In preparation for the negotiations the government will wish to consult fully with all Canadian interests which may be affected. Procedures to this end will be announced in due course.

As one of the world's leading trading nations, whose economic well-being heavily depends on trade, Canada has much to gain from the success of the negotiations and the new export opportunities that will be opened up. This is true for our manufacturing as for our agricultural and primary production. Lower trade barriers can contribute in an important way to the efficient development of Canadian industry on the basis of wider markets. Successful negotiations will provide the opportunity to develop an improved pattern of production and trade which would give a stimulus to Canadian growth and employment on a suitable and competitive basis and so contribute to the development of Canada and the prosperity of the Canadian people.

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PC

George Clyde Nowlan

Progressive Conservative

Hon. George C. Nowlan (Digby-Annapolis-Kings):

Mr. Speaker, I am sure the house has listened with a great deal of interest to this report of the two meetings, one in London and one in Geneva, which the Minister of Trade and Commerce has just read to us. I think in some reports on international gatherings there is a tendency to exaggerate the results accomplished and to gloss over or minimize the difficulties which still remain to be resolved. As the minister has said, there are many difficulties in this area which have hardly been touched upon. I think, judging from press reports-and they were unanimous in this respect-that the conference at Geneva nearly broke down. It was not until the last day, and almost the last hour of the last day, that some agreement or some compromise was worked out which permitted the conference to adjourn, while officials carried on in attempting to establish some ground rules.

As I see it, that is about what was done. An agreement is to be reached on the ground rules under which future negotiations could be conducted. Apparently at the moment the officials will be engaged in trying to establish ground rules which would permit future negotiations.

The minister spoke about the complexity of the changing commonwealth which he

Report on GATT Conference found at London. I am sure that is a situation which everyone realizes, the complexity of the commonwealth and its rapidly changing basis, which perhaps explains why it is much more difficult to accomplish concrete objectives in that area when one is faced with this complexity than it is when one is on the outside and can airily suggest the ease with which these things could be accomplished.

In the press which, of course, I have seen this morning, it is reported that three of the commonwealth countries almost refused to concur in this tentative agreement, and with some reluctance they were persuaded to accept it. This is a report from the Wall Street Journal, not necessarily always an authentic and objective source of information, but it is fairly reliable. If it is correct I suppose the commonwealth countries referred to were Australia, New Zealand and Canada, and one must wonder what arguments were finally used to persuade them to accept.

Mr. MacEwan, the deputy premier of Australia, is quoted in the Halifax Chronicle-Herald, of yesterday's date by Mr. Eric Dennis, who was in Geneva, as saying that this marked the death knell of the British commonwealth preferential system. If that report is correct-and everyone knows it has been United States policy for many years to bring about the destruction of the preferential system-it is certainly going to add to the problems of agriculture to which my hon. friend the hon. member for Qu'Appelle (Mr. Hamilton) referred yesterday. It will not only add to the problems of marketing wheat but also to apples, in which I have more than an academic interest at the moment.

In so far as Geneva is concerned, as the minister has said, he apparently took the position that we could not agree to a universal 50 per cent tariff cut across the board. I think it is fairly obvious why we should not. It must be remembered that throughout the years since the establishment of GATT, as the now Prime Minister said a short time ago in the House of Commons, Canada cooperated fully through all its governments in establishing the GATT principle, and as a result we have a low tariff structure in this country. If, for instance, we have an average tariff structure of 20 per cent and some other country has an average tariff structure of 40 per cent, then in agreeing to a 50 per cent cut we would end up with a 10 per cent average tariff and the other country would still have as high a tariff as we had at the beginning. It is quite obvious

[Mr. Nowlan.l

that some exception will be taken to that, and apparently the minister took such exception.

It is interesting to note, reading back through the discussions which took place in the last few months and years with respect to these negotiations, that there was on the part of the present Prime Minister almost enthusiastic acceptance of the 50 per cent cut across the board. The outcome simply goes to prove what we all know, that on the assumption of responsibility it is much more difficult to carry out airy promises and statements made before one has accepted such responsibility.

The minister has quoted from the chairman's statement at the end as to the compromise arrangement which is to be worked out. That quotation, of course, is reported absolutely objectively and correctly, but he did not quote the interview given by Mr. Christian Herter, who also was in Geneva, and who said these adjustments would only be made-I have forgotten the exact phrase- after proof of tariff and trade imbalances. Everyone knows the difficulty of proving such things. They can go on for years and years, so therefore we can only hope the statement of the chairman is not qualified by the statement made by Mr. Herter at the conclusion of the conference.

So far as we are concerned on this side of the house we of course give full support to any policy which will result in the widening of trade throughout the world, always of course with the reservation that Canada's interests be safeguarded. The Leader of the Opposition took that position when, some time ago, he suggested a conference of like-minded nations to President Kennedy, to accomplish a widening of world trade.

We are appreciative of the statement which the minister has given us this morning. We shall watch with interest the developments and negotiations, and we shall support all logical and proper steps to expand the trade of Canada.

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SC

Horace Andrew (Bud) Olson

Social Credit

Mr. H. A. Olson (Medicine Hat):

We in this group have listened with a great deal of interest to the report given by the minister on the two meetings, one in London and the other in Geneva. We endorse the suggestion he has made that we should be looking for a balance of advantage in these tariff negotiations rather than for a straight 50 per cent reduction or any other percentage of reduction.

We hope there will be some follow through of the interest which has been shown rather than paying lip service to the idea of reducing tariffs and then dismissing the subject out of hand, as was done by the previous

government in 1957 when Britain put out a challenge to some of this lip service in favour of tariff reductions. We are pleased to find this emphasis being placed on the development of trade with so-called underdeveloped countries, particularly those within the commonwealth. We in this group believe this is an area where there is the greatest opportunity for trade expansion. We realize that because of the situation which has developed in the United States in the last few days with respect to wheat even more attention will be demanded by this aspect of our agricultural trade.

We wish the minister and his department well in these negotiations and hope they will have the courage to follow through when the items which come up for negotiation reach a point at which some specific action can be taken.

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NDP

Thomas Clement (Tommy) Douglas

New Democratic Party

Mr. T. C. Douglas (Burnaby-Coquitlam):

Mr. Speaker, the Minister of Trade and Commerce is to be commended for making a report to parliament so early after his return from attending the two meetings in London and Geneva. I was somewhat disappointed that his report on the commonwealth conference in London dealt with such generalities. I hope we shall have an early opportunity for a fuller discussion of this matter. Certainly the press reports emanating from London gave the impression that the minister, on behalf of Canada, had poured cold water on any idea of a commonwealth trading arrangement. This may not be an accurate report.

We all recognize that a commonwealth trading plan is no substitute for a world trading arrangement. However, it is true that we have very large markets in the commonwealth and particularly in Great Britain, markets which give us a considerable favourable balance in our trading relationships and which help to offset the imbalance in our trade with the United States. It is important that we should retain these markets and, if possible, expand them. While we are waiting for a world trading arrangement, which will undoubtedly take some time to work out, it would seem to the members of this party that no opportunity of strengthening and widening our present trading position within the commonwealth ought to be lost. After all, we cannot keep the commonwealth together merely by airy generalities about a common loyalty to the crown or a common faith in democratic institutions. It will have to be some practical thing which will have meaning particularly for the newly developing nations which have entered the commonwealth and which have serious trading problems at this time.

Report on GATT Conference

With reference to the Geneva conference, it is undoubtedly true that the earlier part of this conference was a great disappointment. The United States insistence on a linear or across the board reduction as against reductions on selected items meant that for a while there was the danger of a complete breakdown. I think the United States position may become less inflexible. If it does not, I am afraid the future prospects for GATT will be considerably dimmed. I hope that at an early date the government will take action to make possible a general debate on this matter so that we may have further information.

I had hoped that in the course of his report to the house the minister would have said something about whether the government is considering the introduction of a trade adjustment act which would set out the kind of compensation to be made available to various segments of our economy which might be adversely affected by tariff adjustments. I think a great deal of uneasiness would be removed if those large areas of our economy which might be affected by tariff adjustments, and other changes which we all recognize will have to be made, knew that legislative and administrative machinery were being provided in order that they might receive some compensation. There would be less uneasiness if they knew there was some period over which the adjustments might be made and that they would be put into effect in an orderly fashion without the dislocation which might follow should action be taken too suddenly.

I think the minister's report has been most useful, but I trust an early opportunity will be presented for fuller discussion so the hon. gentleman might answer questions and give the house further information.

On the orders of the day:

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PC

John George Diefenbaker (Leader of the Official Opposition)

Progressive Conservative

Right Hon. J. G. Diefenbaker (Leader of the Opposition):

Arising out of the statement made by the Minister of Trade and Commerce, in the course of which he said he had had some discussion with Mr. Soames, reference was also made to the fact that in the last couple of days discussions had taken place in the British House of Commons on the question of trade in general.

I would ask the hon. gentleman whether or not he had discussions with Mr. Soames on the question of British imports of agricultural products and, in particular, what Canadian agricultural exports to the United Kingdom are in contemplation by the British government as being subject to potential quotas if applied.

Inquiries of the Ministry

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LIB

Mitchell William Sharp (Minister of Trade and Commerce)

Liberal

Hon. Milchell Sharp (Minister of Trade and Commerce):

I am grateful to the Leader of the Opposition for giving me an opportunity of expanding the remarks I made in my statement.

I look upon the statement made by Mr. Soames as one of the more constructive developments of recent times. The United Kingdom government is reviewing its domestic agricultural policy, and Mr. Soames spoke to me about the relationship this would bear to imports of such things as cereals from Canada. He looked upon this as a means of enlarging markets for Canadian cereals in the United Kingdom, and of giving this market a stability which has not hitherto existed. That is why in my statement I did refer to what Mr. Soames had said, and also to what Lord Amory said yesterday. I think this is a most constructive development, and I trust the Leader of the Opposition will not be unduly concerned by what he reads in the newspapers.

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PC

John George Diefenbaker (Leader of the Official Opposition)

Progressive Conservative

Mr. Diefenbaker:

I am not unduly concerned by what I read in the newspapers. I am concerned with what was said in the British parliament the day before yesterday to the effect that in these discussions "we found a good deal of understanding for our general thesis that if they-" that is, the commonwealth countries among others-"are to obtain a reasonable return from our market there must be control over the conditions under which it is supplied."

I ask the minister this. What were the particular cereals and what is the nature of the controls, among others under discussion, which the minister apparently indicated he was prepared to support?

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LIB

Mitchell William Sharp (Minister of Trade and Commerce)

Liberal

Mr. Sharp:

Mr. Speaker, I do not think I could be expected to discuss British domestic policy in answer to this question. I should like to assure the Leader of the Opposition that the reason Mr. Soames spoke to me- indeed, he gave me in advance the text of the remarks from which the Leader of the Opposition quoted-was to assure me that these developments were very constructive from Canada's point of view and were designed to give us a more secure share of the British market for the products, particularly cereals, in which we have a direct interest.

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UNITED NATIONS

REFUSAL OF RUSSIA TO PAY SHARE OF COSTS


On the orders of the day:


SC

Horace Andrew (Bud) Olson

Social Credit

Mr. H. A. Olson (Medicine Hai):

Mr. Speaker, I should like to direct a question of urgent importance to the Secretary of State for External Affairs. It concerns a situation which seems to be deteriorating

every day. In the absence of the minister perhaps I can address my question to the Prime Minister. Would the Prime Minister inform the house what Canada will suggest or what she is prepared to do to meet the critical financial problems of the United Nations now that the Soviet union has again informed the United Nations that she does not intend to pay or to assist in paying any of the $200 million loan or a share of many obligations of the United Nations?

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Subtopic:   REFUSAL OF RUSSIA TO PAY SHARE OF COSTS
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LIB

Lester Bowles Pearson (Prime Minister)

Liberal

Right Hon. L. B. Pearson (Prime Minister):

Mr. Speaker, it is, of course, most regrettable that the Soviet union or any other member of the United Nations refuses to accept and live up to its financial obligations in respect of the United Nations. Notwithstanding that, the Canadian government, as in the past, will play its full part financially and otherwise to ensure that the work of the United Nations can go on. Proposals have been made by the Canadian delegation at the recent assembly meeting dealing with these financial matters. My hon. friend the Secretary of State for External Affairs, who will be speaking in the debate on Monday, will have something to say on this matter in greater detail.

(Translation):

Topic:   UNITED NATIONS
Subtopic:   REFUSAL OF RUSSIA TO PAY SHARE OF COSTS
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May 24, 1963