Hon. E. J. Benson (Minister of Finance):
Mr. Speaker, I would like to make a brief report to the House on the meeting in London last Wednesday and Thursday of ministers and governors of the Group of Ten.
I wish to table copies in English and French of the communique issued by the Group of Ten and of my statement of the Canadian position.
This was the first opportunity for ministers to examine the world monetary situation in light of the program announced on August 15 by President Nixon to correct the very serious balance of payments deficit of the United States.
All ministers recognized that a fundamental disequilibrium exists in world payments and that action on a wide front will be necessary to deal with it. We have all come away from the meeting with a much clearer understanding of positions. All of us appreciate that difficult work lies ahead, and nobody expected overnight solutions. As far as I am aware, the world has never been faced by a financial and economic negotiation of such complexity and sensitivity. The plain fact is that differences of opinion have emerged among leading nations as to the order of priorities for the major policy adjustments that are necessary. It will take time for governments to decide on such actions in light of the positions of every other government. In the meantime important work will proceed in Working Party Three of the Economic Policy Committee of the Organization for Economic Co-operation and Development, as well as among the deputies of the Group of Ten. The ministers and governors will meet again on September 26 in Washington, in advance of the annual meeting of the International Monetary Fund.
In my remarks to the meeting as Minister of Finance of Canada I emphasized the urgency of the situation and the need to grapple positively with the issues involved. I stated frankly that the most important steps of the United States-the surcharge, the investment tax credit and the so-called DISC proposal-are protectionist in nature. They represent a departure from traditional American policies. I suggested that action is long overdue to dismantle protectionist policies on the part of Europe and Japan that have hindered the process of adjustment and that have too often been directed at U.S. products. I said that
immediate adjustments would be assisted if the U.S. could make a more precise statement of essential preconditions for the removal of the surcharge.
Canada recognizes that the payments position of the United States will be corrected, one way or another. We have suggested that the real issue is the way in which the correction will occur. We hope it will occur in an environment of continued economic expansion in the world. We hope it will not occur through an unravelling of the freer trade arrangements secured in the last quarter century. We must act together in constructive ways before such a pattern of restriction sets in.
No country has more at stake in these matters than Canada. We intend to participate actively and responsibly in these discussions and provide leadership wherever we can.
Subtopic: REPORT BY MINISTER OF FINANCE ON GROUP OF TEN MEETING-TABLING OF COMMUNIQUE AND STATEMENT OF CANADIAN POSITION