May 1, 1964

PC

John George Diefenbaker (Leader of the Official Opposition)

Progressive Conservative

Mr. Diefenbaker:

The communique says:

The committee discussed policies which each country was following to improve its balance of payments.

That raises the whole question of the discriminatory legislation introduced by this government against United States investment. We should have liked some information in this regard. There was the pious expression of the view that the principles of non-discrimination should achieve this objective. That particular portion of the communique is in line with the viewpoint of Her Majesty's loyal opposition, which has consistently opposed the economic tinkering in which this government has engaged.

Next the automotive program was stressed by the minister, as it is in the communique. We have taken the stand that the course followed by the government in this connection is one that could only bring about retaliatory measures on the part of the United States, and that is what has happened. The communique says:

Canadian ministers expressed concern about increases in levels of certain United States tariffs arising from the recent reclassification of the United States tariff, including rates on parts and components.

That has been the position of automobile workers across Canada, that as a result of the action taken by this government in bringing about discriminatory legislation, rather than proceeding by way of encouragement through incentive, there would be retaliation; and there has been. Then the communique says:

They urged-

That is referring to the Canadian government:

-that the United States government take action to correct this situation.

20220-179i

U.S.-Canadian Trade Meeting

There is need of action in this regard. The hon. member for Portage-Neepawa-

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Some hon. Members:

Order.

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PC

John George Diefenbaker (Leader of the Official Opposition)

Progressive Conservative

Mr. Diefenbaker:

-has referred to this fact, and I point out that because of the retaliatory action taken by Mr. Hodges, and threatened by him, various industries in Canada, including the farm machinery industry, are suffering as a result of the imposition of a 10 per cent duty in the United States.

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LIB

George James McIlraith (Minister of National Revenue; President of the Privy Council)

Liberal

Mr. Mcllraith:

Mr. Speaker, I am rising on a point of order. The Leader of the Opposition is obviously debating the subject matter of the announcement, and that is not permissible. What is permissible is for him to make a brief comment, which is a courtesy extended under the rules for the first time in recent years, directed to the announcement which has been made and to the propriety or nonpropriety of making the announcement. The right hon. gentleman is not permitted, however, to debate the subject matter raised in the announcement itself. I hope the Leader of the Opposition agrees with that proposition, particularly when he remembers that the courtesy is one which is not granted to leaders of the other parties.

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PC

John George Diefenbaker (Leader of the Official Opposition)

Progressive Conservative

Mr. Diefenbaker:

Mr. Speaker, I want to say this. I am reading from the communique to which reference has been made. This communique has been tabled. Am I to be denied the right to support what I have to say by arguments to the effect that the 10 per cent retaliatory tax imposed, which is affecting our farm machinery industry and our automobile industry, is a direct result of the failure to act on the part of this government?

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SC

Robert Norman Thompson

Social Credit

Mr. Thompson:

Mr. Speaker, on a point of order, if this is turning into a debate on this statement which has just been tabled, could the rest of us have copies of it? We have not seen it. I do not know how the Leader of the Opposition has it, but we do not have it. Certainly I do not think the matter should be debated under the circumstances.

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PC

John George Diefenbaker (Leader of the Official Opposition)

Progressive Conservative

Mr. Diefenbaker:

I might point out distribution was made, and apparently the hon. gentleman has not gone through his mail this morning.

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Maurice Bourget (Speaker of the Senate)

Mr. Speaker:

In order to assist the house may I suggest that statements be brief and factual.

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PC

John George Diefenbaker (Leader of the Official Opposition)

Progressive Conservative

Mr. Diefenbaker:

Mr. Speaker, mine are both. Then there is this reference.

United States members expressed their concern over possible Canadian measures which might adversely affect certain United States publications.

U.S.-Canadian Trade Meeting

We should like to know what happened. What did the Canadian government say? Did it say that it was going to exempt Time and Reader's Digest?

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LIB

Mitchell William Sharp (Minister of Trade and Commerce)

Liberal

Mr. Sharp:

Mr. Speaker-

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PC

John George Diefenbaker (Leader of the Official Opposition)

Progressive Conservative

Mr. Diefenbaker:

There is simply the statement-is the Minister of Trade and Commerce aroused, too?

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LIB

Mitchell William Sharp (Minister of Trade and Commerce)

Liberal

Mr. Sharp:

Mr. Speaker, on a point of order, I would be very happy to answer all the questions put by the Leader of the Opposition at the proper time.

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PC

John George Diefenbaker (Leader of the Official Opposition)

Progressive Conservative

Mr. Diefenbaker:

Good. In the meantime, if the minister will keep silent I will finish my argument. We should like to know what was said in this regard. This generalization is no good. Are Time and Reader's Digest still to be exempt or not? When I look over this statement it is one of bland generalization and does not represent anything like the fulsome description given to it by the Secretary of State for External Affairs. The very matters mentioned here are still objects of deep disagreement between our countries, and the house has the right to know what is the meaning of this. Why these generalities? Why did the minister not tell the house exactly what took place, instead of producing a document which is meaningless in its generality?

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Maurice Bourget (Speaker of the Senate)

Mr. Speaker:

Order. It being one o'clock I do now leave the chair.

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NDP

Thomas Clement (Tommy) Douglas

New Democratic Party

Mr. Douglas:

Mr. Speaker, before you leave the chair could it be agreed that the communique will be printed as an appendix to Hansard?

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Maurice Bourget (Speaker of the Senate)

Mr. Speaker:

Does the house so agree?

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Some hon. Members:

Agreed.

[Editor's note: For text of communique referred to above, see Appendix "A".]

At one o'clock the house took recess.

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AFTER RECESS The house resumed at 2.30 p.m.


NDP

Thomas Clement (Tommy) Douglas

New Democratic Party

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

Mr. Speaker, when the house rose at one o'clock I was about to make a comment on the statement which had been made by the Secretary of State for External Affairs (Mr. Martin).

Like the hon. member for Red Deer (Mr. Thompson) I had not received a copy of the communique to which the Secretary of

State for External Affairs referred, but I have since secured a copy. I would like to say that I think these meetings between ministers of the Canadian government and their advisers, and representatives of the United States government and their advisers, serve a very useful purpose.

Whether there has been agreement or not on all the questions discussed, the mere fact that there has been an exchange of views and a better understanding of the position which each government takes vis-a-vis certain problems, gives a better chance for some viable solutions to be worked out between the two governments. Any two countries that are as closely intertwined economically, and as closely located geographically as Canada and the United States, have to work out the answers to their problems around the council table.

These problems cannot be solved at arm's length, and certainly not by name calling or vituperation. They have to be worked out on the basis of consultation and an exchange of views. Of course that does not mean Canadian representatives need to surrender on every issue that comes before them, but it does mean that meeting with representatives of the United States government can be the beginning of a great deal of progress in Canadian-United States relations.

1 have not a copy of the minister's statement, but I notice the communique mentions several important matters and I want to say a few words briefly about each of them. First of all it refers to the very important matter of trade and says:

The United States members expressed agreement with Canada's desire to improve its current account through an expansion of exports and stressed the importance of adhering to the principles of non-discrimination in achieving this objective.

This is important in a country like Canada where 68 per cent of our imports come from the United States, and 62 per cent of our exports go to the United States. There is probably no country in the world which has as vulnerable an economy as ours, and is so completely dependent for its economic prosperity as is Canada with reference to its trading relations with the United States. But though this statement is made in the communique, the fact remains that after saying both parties stressed the importance of adhering to the principles of non-discrimination, it was good to see that the Canadian ministers expressed concern over increases in levels of certain United States tariffs, arising from recent reclassification of United States

tariffs, including rates on parts and components, and urged the United States government to take action to correct this situation.

It seems to me, Mr. Speaker, that this is an important matter which ought to concern the government; that it is not enough to talk in generalities about removing discrimination if, at the same time, by process of reclassification, Canadian exports to the United States are adversely affected.

I was also interested in the fact that the two governments are going to establish "a joint working group to prepare a program of studies relating to trade in all kinds of energy between the United States and Canada". It is important that the Canadian government keep in mind that Canada has great natural advantages in the matter of sources of energy, and that it ought not to lose these natural advantages.

The tendency in the Canadian economy has been for a major part of our investment to be in the extraction industries, and we are exporting raw materials and increasingly exporting energy in various forms. This does not, of course, make for the development of secondary and tertiary industries which are the large employers of labour. It would be a sad thing if we were prepared to accept the role of being a mere supplier of raw materials, a country of extraction industries with a relatively small labour force, just to supply our powerful neighbour to the south with raw materials and the energy to turn them into manufactured products.

I had hoped that somewhere in the statement given by the government there might have been some remarks from the Minister of Finance, because I think all hon. members were greatly concerned about the statements made by the United States under-secretary of state, Mr. George W. Ball, at Harriman, New York, on April 26. I am not going to quote from that speech, but it is very difficult to separate Mr. Ball and his official position as a spokesman for the United States government.

I do not at all question Mr. Ball's right to take the strong position which he did. I only hope that the Canadian ministers took an equally strong position with Mr. Ball and those associated with him, because Mr. Ball made it very clear in his address at Harriman, New York, that any changing of the ground rules could have substantial repercussions, and he made particular mention of:

-measures by governments designed to induce a change in the character of investment from equity to debt...or to refuse national treatment

U.S.-Canadian Trade Meeting to capital that had earlier been welcomed, or to bring about the transfer of production from one country to another.

-which he says-

-can be seriously disruptive.

This, it seems to me, challenges the whole question of Canada's right to direct its trade program, its tariff policy and its investment policy with a view to strengthening the Canadian economy. If Canada is ever to be other than just a branch plant economy, if it is to develop a strong economy capable of exporting into the markets of the world, it is going to have to re-examine its tariff policy, its investment policy and the allocation of its resources.

I hope that the Canadian representatives to the conference of recent days made this perfectly clear to Mr. Ball and to the other representatives of the United States government, that Canada must increasingly gain a greater measure of control over its own economy, that this is not a reflection on the United States, and is not the result of any attempt to be a bad neighbour. It is simply a desire on the part of the Canadian people to retain their own identity and their economic and political independence.

In spite of Mr. Ball's little lecture to us in his speech when he said-

-the maintenance of political independence, however, depends more on the state of the national will than on economic relationships-

-I would say, if our independence depends on the state of the national will, then it is the responsibility of the government to make it very clear to the United States that it, and the Canadian people, have the will to build a strong, viable Canadian economy that is not completely dominated by outside investors, and that will never become an economic satellite of any power on the face of the earth.

One other item in this communique says that the United States members expressed their concern over possible Canadian measures which might adversely affect certain United States publications. I had hoped that the Canadian government would have made some elaboration on this point, and I hope that before too many days elapse the Prime Minister will tell us the intention of the government with respect to the legislation which has been announced, whether the government intends to water down further the recommendations of the O'Leary commission. I should like to know whether or not it was made clear to the United States that they themselves, if the shoe were on the other foot, would not condone for a moment the

2824 HOUSE OF

U.S.-Canadian Trade Meeting control of their magazine and periodical fields by outside publishers as is the case in Canada.

I hope the Canadian government has made it abundantly clear to the United States that, contrary to what Mr. Ball said in his speech of last week, we are not seeking to cramp ideas, we are not seeking to prevent the exchange of points of view. What we are seeking to do in Canada is to retain a Canadian identity and to adopt the same policy with respect to outside periodicals that the United States itself applies in the field of publications.

One last thing, Mr. Speaker. It is not in the communique, but I gather from the closing words of the statement by the Secretary of State for External Affairs that some mention was made of a discussion having been held with respect to southeast Asia. The minister did not elaborate on that. He simply said that certain American officials had recently visited southeast Asia and had made a report to the group. The fact remains, however, that American official's have stated publicly in recent weeks that they have been bringing pressure to bear on the Southeast Asia Treaty Organization asking them to supply forces for Viet Nam. It is true they conceded that since Canada was a member of the truce team in that area our contribution might be limited to medical and hospital services. I want to say now and to give warning to the government that any attempt to involve Canada in the struggle which is going on in Viet Nam will certainly be resisted strongly by the members of this party. If Canada wants to play the role of being the fly on the flypaper I do not know any better way to do it than to become involved in the Viet Nam situation.

We have had no opportunity to study the communique, Mr. Speaker, and I merely make these few remarks with reference to it. I do think, however, that the government would be well advised to provide an opportunity at an early date for a fuller discussion of the question of United States-Canadian relations and that we might have from the respective ministers a fuller account of the position which Canada took at this conference and the position which the Canadian government intends to take in the immediate future regarding the problems that were discussed at the conference.

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SC

Alexander Bell Patterson

Social Credit

Mr. A. B. Patterson (Fraser Valley):

Mr. Speaker, it is not my intention to discuss at any length the details of the statement made by the Secretary of State for External Affairs this morning. However, I should like

to make some general observations with respect to the purpose of the discussions that have been held recently. If we are to maintain the happy relations we have enjoyed so far with our neighbours to the south it is imperative that we meet with them, discuss our problems together and work out harmonious solutions. I believe there are many areas in which conflict has arisen and in my view it is always the better part of wisdom to endeavour to resolve these conflicts of views before they reach the point where tensions develop and amicable relations are threatened.

I do not think that recriminations and counter-recriminations in any field ever contribute to a mutually satisfactory solution of problems. Therefore I would say that the occasions for meetings which are presented, such as the meeting recently held with United States officials, are certainly most worth while.

Some reference was made in the minister's statement this morning to trade discussions having to do with tariffs, etc. May I say there is real uneasiness, especially in agricultural circles, as to the possible outcome of the discussions having to do with tariff arrangements. I am thinking particularly of the people engaged in the growing of fruits and vegetables. They are most concerned about the possible outcome of these discussions. I am sure that those who are representing Canada will see to it that Canadian interests are protected in every possible way and that no action will be taken that will militate against the best interests of our own producers. I just wanted to make these general references and observations with regard to the type of discussions held and to urge that such discussions be continued and extended as need may arise.

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May 1, 1964