December 18, 1987

PC

Martin Brian Mulroney (Prime Minister)

Progressive Conservative

Mr. Mulroney:

Permit me to quote briefly from the preamble to the text as follows:

The Government of Canada and the Government of the United States of America, resolved to strengthen the unique and enduring friendship between their two nations, have agreed to establish a free trade area.

The objectives of this agreement are to eliminate the barriers to trade in goods and services between our two countries, facilitate fair competition, liberalize conditions for investments, establish effective procedures for the resolution of trade disputes, and lay the foundation for further co-operation to expand and enhance the benefits of the agreement.

There it is, Mr. Speaker. Those are the elements, an important, mutually advantageous commercial transaction; nothing more, nothing less. This is not the kind of integrated economic union brought about by the Common Market in the United Kingdom with France. If anybody for a second thinks that-[DOT]

-General de Gaulle, as President of the French Republic, would have allowed France to accept trading conditions which might have weakened French sovereignty, he is misjudging the General. In spite of 25 years of much closer economic co-

Free Trade

operation than is provided by this agreement, France has preserved its integrity, its independence, the purity of its language and its literature.

If anybody thinks that Margaret Thatcher would, for one second, agree to an economic apparatus that would diminish the integrity of Great Britain or the soul of the English language or literature, they know nothing about Margaret Thatcher. I can tell you, Mr. Speaker, that this commercial transaction will do nothing except make Canada more prosperous and that prosperity will allow Canadians to enjoy a stronger and richer culture.

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?

Some Hon. Members:

Hear, hear!

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PC

Martin Brian Mulroney (Prime Minister)

Progressive Conservative

Mr. Mulroney:

I will list very briefly some of the things that we have achieved for Canada. First, we have achieved a more certain framework for our most vital trading relationship. I think few people would quarrel with the desirability of that. Interdependence requires co-operation, but co-operation based on rules impartially applied, not at the whim of the Party in power.

Second, the elimination of tariffs, which is the most powerful element of the agreement, removes barriers to manufacturing and processing in Canada and expands tremendous markets for exports of these resources and agrifish products.

Third, we will enjoy a more certain climate for investment. Investment means more jobs. Investment means more income for Canadians. May I say, with respect for my hon. friend from Oshawa, that his constituency, of which I am proud, represents, I suppose, the ideal for the other 281 constituencies in Canada. Everyone is proud of the tremendous foreign investment and the low unemployment which has been brought about in Oshawa. We wish that kind of richness and prosperity for all Canadians.

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?

Some Hon. Members:

Hear, hear!

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NDP

John Edward Broadbent

New Democratic Party

Mr. Broadbent:

That's what happens when you vote NDP.

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PC

Martin Brian Mulroney (Prime Minister)

Progressive Conservative

Mr. Mulroney:

My hon. friend knows that I say that with affection and respect with regard to the kinds of things which we can bring about on a progressive basis for all Canadians.

Fourth, the agreement will provide better choice and better prices for consumers. The leading spokespeople of consumers' associations have indicated that consumer goods will cost less, which is of great benefit to the ordinary Canadian.

Fifth, the Auto Pact is maintained, improved, and made more secure as part of the broader package. The Member for Oshawa (Mr. Broadbent) seems to chuckle. He should not chuckle because he knows that Mr. Peapples, the Chairman of General Motors, is a very serious man whose company has invested billions of dollars in southern Ontario and billions of

December 18, 1987

Free Trade

dollars in his own constituency. Mr. Peapples and the chairman of the two other leading car manufacturers, experts in the automobile business, say that the free trade agreement with the United States has preserved and enhanced the Auto Pact, it means more jobs and greater security of access. Mr. Peapples said that it is good for Oshawa, it is good for Ontario, and it is good for Canada. I would have thought the Leader of the NDP would stand up and celebrate that fact.

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?

Some Hon. Members:

Hear, hear!

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PC

Martin Brian Mulroney (Prime Minister)

Progressive Conservative

Mr. Mulroney:

Sixth, we have achieved a better market for energy products which means more investment in energy projects in western Canada which is so vital for the well-being of that great region of our country, for Hibernia, the offshore of Newfoundland and Labrador, and possibly for Nova Scotia. This is another great attraction as a result of a free trade arrangement.

Mr. Speaker, Quebecers are especially aware of the opportunities our free trade agreement opens up for electricity exports. The American market is crucial if Quebec is to develop this key natural resource. Hydro power is no more immune to American protectionist measures than oil or other products. It was threatened just like all other products. And protectionism is a risk we cannot afford to run if we want electrical energy to remain the powerful instrument of growth it has been for Quebec. And I can tell you that all or practically all Quebec spokesmen, the Premier of Quebec, the leader- the former Minister of Finance, Mr. Parizeau, the former Minister of Finance, Mr. Landry, the leaders at all levels of society are now saying that the future of Canada and Quebec rests squarely on the free trade agreement. It is an instrument which will bring back a degree of unusual prosperity to Quebec, and Quebecers simply want Canada to sign this free trade agreement. I fully expect the leader of the Liberal Party and the NDP to help us promote the economic interests of Quebec within a renewed confederation.

Seventh, we wanted to maintain agricultural marketing boards, and they have been maintained.

Preservation of our supply management system and marketing boards is especially important for Quebec, where the Dairy Product and Egg Marketing Boards regulate 60 per cent of farm produce.

This Agreement also complies with Article 11 of the GATT, in line with the wishes of the Government of Quebec and several UPA leaders. It is thanks to the Minister of Agriculture, to Mr. Page, the Quebec Minister and Premier Bourassa, and Mr. Blais, the Minister of State for Agriculture, that the final text contains this reference to Article 11 of the GATT, as desired by the UPA, and this represents a considerable gain for Quebec producers.

Regional development programs and cultural policies are preserved along with our capacity to assist cultural industries. Social programs were never at issue.

Eighth, more certain economic growth will bolster institutions and programs which anchor Canadian values and identity. I have mentioned before that this trade agreement is neither a miracle nor a mirage. It is an instrument for growth, a pragmatic undertaking conditioned by lessons of geography, experience, and common sense. It is born of confidence- confidence in who we are as Canadians and what we are capable of achieving. Above all, we will have a fair chance to compete, to excel in trade internationally-not only with the United States but in the GATT-and to enrich Canada in the process.

For Quebec, as I have mentioned, the agreement means new opportunities for hydroelectric exports and new export outlets for small and medium-sized enterprises.

For example, Mr. Speaker, I am thinking of Quebec's new generation of business men and women, who have already made breakthroughs outside the province and outside the country. The days of a well-meaning elite preaching introversion, and making a virtue of economic faint-heartedness, are history. Quebecers used to complain about having their economy dominated by others. Today, throughout Quebec, we see men and women who have taken their future into their own hands, and astonished both their fellow Canadians and our neighbours to the south with their dynamic, creative and daring spirit. Today's modern, prosperous and self-confident Quebec is an example for the rest of Canada. Entrepreneurs from Quebec, businessmen and women from Quebec are saying to the Federal Parliament: Give us this instrument for economic expansion and national unity. Give us, as Quebeckers, an opportunity to compete with the best in the world and we will succeed. And in the process, we will bring back a degree of prosperity to Quebec and to Canada.

[DOT] (MOO)

For Ontario, clearly the assessment of everyone, including the Government of Ontario if I read the most recent report of the Treasurer of Ontario correctly, is that it offers new opportunities for greater prosperity. I suppose one could quibble about the degree, but there is no doubt about the fact that even the Government of Ontario, which I understand is officially opposed to the transaction, produces numbers and studies which confirm that Ontario will benefit from this deal. Everyone knew that before.

The only degree of difference is the extent to which Ontario will benefit. It is our hope that Ontario will benefit greatly from this transaction because Ontario has become, in Canada, a great industrial heartland, a great symbol and instrument of growth and prosperity. This Government has initiated policies

December 18, 1987

that have enhanced that and contributed to it. We want to make sure that that great strength of Ontario is maintained for future decades. This treaty with the United States will clearly contribute to the prosperity of Ontario and, in the process, the prosperity of Canada.

In the West there will be gains for forestry workers in British Columbia, for ranchers and oil workers in Alberta, for uranium producers in Saskatchewan, for electricity exports from Manitoba. In the Atlantic there will be benefits for the fishery, for exports of agricultural products, for minerals, and for manufacturing. The potential benefits span the breadth of this country and will stimulate more balanced development in the years ahead.

To those who say our industry will go into decline without the protection of tariff walls, I say, have confidence in the quality and competitiveness of Canadian products. After all, the same concern was expressed when the Auto Pact was negotiated by the Government of Canada 23 years ago. Remember that, at the time, that great commercial treaty was negotiated by the same fellow who did it again, Simon Reisman. The Leader of the New Democratic Party chuckles. Twenty-three years ago Simon Reisman negotiated the Auto Pact on behalf of Canada. Many people, including some of the Members of the socialist party, were opposed. The fact of the matter is that the Auto Pact, far from being a difficulty, has been a bonanza for Ontario and for Canada.

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Some Hon. Members:

Hear, hear!

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PC

Martin Brian Mulroney (Prime Minister)

Progressive Conservative

Mr. Mulroney:

I say with respect and affection, of course, that I would advise my hon. friend, the Leader of the NDP-

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PC

John Barry Turner

Progressive Conservative

Mr. Turner (Ottawa-Carleton):

And Shirley Carr.

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PC

Martin Brian Mulroney (Prime Minister)

Progressive Conservative

Mr. Mulroney:

Shirley Carr too. After all, it is Christmas. I would advise my hon. friend to be very prudent in the severe judgments that he makes in forecasting. I say with all the Christian charity that I can summon at Christmas time, his record as a forecaster on the floor of the House of Commons is, to understate the case, poor indeed.

For those who said that the Auto Pact would be a disaster, I remind them that nearly 100,000 jobs have been created in the automobile and auto parts industry. There has been $10 billion in direct new investment in that industry in the 1980s alone. It has become the great motor of industrial renewal in Ontario, yet some Members were predicting a disaster. In the same way that the Leader of the NDP is predicting disaster with the free trade agreement, which I hope is recorded in Hansard, let me tell him that he was wrong 23 years ago and he will be wrong again today.

To those who say that our cultural sovereignty will be diminished, I simply say, look around you. I suggest that we examine this emotional argument in the light of some empirical evidence. Let us consider the experience of Ontario and the Auto Pact, because it is very sensitive and important. The

Free Trade

numbers are there. One can consider them or disregard them. I believe the figures are an important consideration.

In 1966, the first year after the Auto Pact came into force, 72 per cent of Ontario's foreign trade went to the United States. Last year, 90 per cent of Ontario's foreign trade went to the United States, and two-thirds of that 90 per cent of foreign trade came from the automotive product business. In other words, 90 per cent of all the goods and services produced in Ontario that were exported went to the United States. No other province has that kind of trade balance with the United States.

When the Auto Pact was signed, Ontario's foreign trade in this area was $2.6 billion in 1966. It has risen to $54.6 billion, last year, which raises the following question. Has Ontario and Canada's culture been adversely affected by this closeness or new prosperity?

Let us look at Toronto, southern Ontario and Ontario. In the last 20 years new newspapers have been born, new magazines have been published, new books have been written, new symphonies performed, new plays staged, new concert halls have been built, new television networks have been launched. All of that has enhanced and enriched the great cultural personality of Canada. That is because new prosperity has meant greater investment in arts and culture. It has always been thus. Rich societies do that and we want to make sure that is maintained.

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LIB

John V. Nunziata

Liberal

Mr. Nunziata:

The Auto Pact did all that.

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PC

Martin Brian Mulroney (Prime Minister)

Progressive Conservative

Mr. Mulroney:

Well, one of my hon. friends from Toronto is chuckling at the fact that the Auto Pact did all that. The Auto Pact contributed greatly, and there are other areas of the country that seek only an equality of opportunity to have that kind of prosperity. They do not want to detract from Ontario's prosperity. They are proud of it. They are only asking you to please open your mind so that British Columbia and Newfoundland can have the same equality of opportunity.

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?

Some Hon. Members:

Hear, hear!

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PC

Martin Brian Mulroney (Prime Minister)

Progressive Conservative

Mr. Mulroney:

When in Venice in last June at the Economic Summit, I was struck again that the city itself is one of the world's great treasures which has contributed greatly to the cultural life of Italy and all of mankind. What is Venice in history if not a trading city? What are Venetians, from Marco Polo's time, if not traders?

What is Canada, if not a great trading nation? What are Canadians, if not great traders? Trade is the lifeblood of our nation. Thirty per cent of everything we produce is for export. This compares with some 20 per cent for Japan and 10 per cent for the United States of America, another great trading partner.

In the final text of the agreement we have clarified and consolidated the gains we have achieved for Canada from the October agreement in principle. We also believe that our

December 18, 1987

Free Trade

agreement with the United States will be a catalyst for the GATT negotiations, and the underlying objective of all trading nations. These are not mutually exclusive. We have not done anything to the detriment of the other. We have negotiated bilaterally with our great trading partner, the United States of America, but we have intensified our negotiations on the GATT.

The Minister for International Trade and the Secretary of State for External Affairs (Mr. Clark) have provided leadership on a sustained basis. They have brought agriculture, services and other items to the forefront of the agenda of the GATT.

Canada is a great trading nation, and not just exclusively with the United States, although we value that greatly. Our trading strategy is for Canada to excel across the world. We will fight for markets everywhere, and everywhere we can find a new trading opportunity we will take it, because that means jobs back at home.

[DOT] (mo)

So the exclusion is not something that we believe in. We believe that we can and should promote a proper bilateral relationship with the United States, and at the same time intensify and expand our trading opportunities around the world, because in that manner greater prosperity is ensured and greater fairness for all Canadians.

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?

Some Hon. Members:

Hear, hear!

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PC

Martin Brian Mulroney (Prime Minister)

Progressive Conservative

Mr. Mulroney:

We all know full well, Mr. Speaker, that protectionism breeds stagnation; that trade liberalization is the time-tested promise of sustained economic growth. If this is a time for confidence, and I believe it is, it is also a period in our history that demands vision, vision to build a more united and a stronger Canada.

I invite Members to consider some of the implications of a question posed recently in The Ottawa Citizen by Mr. Spicer. 1 leave the question with my hon. friends. Mr. Spicer observed:

There lurks in the minds of many of these professional patriots ... a veritable Disneyland of neuroses about Canada: fear over hope; protectionism over risk-taking; a preference for the small, safe homeland over the scary grand stage of North America; pessimism over optimism; a love of hiding over seeking; a taste for tribe over individual.

Mr. Spicer asked, is it not time for Canadians to stop being afraid. I say to Mr. Spicer, not only was his question right, the answer is that Canadians have stopped being afraid and will move proudly into the 21st century in large measure because of this courageous action in respect of bilateral trade.

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?

Some Hon. Members:

Hear, hear!

The newspaper Le Droit wrote on Tuesday:

The shortsightedness and the too few arguments used by those who oppose free trade between Canada and the U.S. contrast sharply with the strength of the rational arguments used by those who favor the deal.

In an a major editorial published on Monday in the daily newspaper Le Devoir, which is quite important in Quebec, the editorialist wrote, and I quote:

Canada needs the free trade deal simply because there is no other alternative.

That is a major statement made in the name of all Quebecers.

Legitimate concerns have been expressed about the implications of the omnibus trade Bill which is under consideration in the United States. The fundamental nature of this concern illustrates the concern we had about protectionism, a primary motivator in the efforts that brought about this historic trade agreement. That is why we sought, as a first priority, greater security of access to the United States market, and we succeeded in that objective.

We have agreed to a unique binding dispute settlement provision, one which others envy, which will ensure impartial, fair application of trade remedy rules. This is intended simply to guarantee the rule of law-the rule of law over the whim of political power. We have preserved our access against changes to existing trade remedy law. We have concluded a standstill provision restricting either party from taking trade action which will run counter to the spirit of the free trade agreement before that takes effect.

The United States administration and the Congress know our concerns about what might be included in the omnibus Bill. They know full well what the implications would be, if measures are approved in the omnibus Bill which undermine all of those important matters that have been negotiated.

So, Mr. Speaker, a legitimate question, and one that I have heard in this House and elsewhere is, how did we do in the negotiations. I can only hope, and I express the serious hope, that we do not have to have the United States Congress reject the agreement in order to convince some Canadians that we actually did pretty well.

What we have negotiated is a balance. It is not perfection, but it is a balance; a net gain based on the best judgments available on what the result would generate for Canada, and on what the political process in both countries would accommodate.

Just consider what some others are saying and doing. In a major article in the Washington Post on November 8, headed "Other nations vie for U.S. trade pacts. Canadian agreement includes coveted points". In a major analysis, Stuart Auerbach said the following:

While opposition mounts in Canada to a recently completed free trade agreement with the United States, other countries are asking the Reagan administration for a chance to conclude similar pacts.

Among major U.S. trading partners that have expressed interest in negotiating free trade pacts with the United States are Japan, South Korea, Taiwan and . . . especially Singapore. In addition, Israel now wants its two year old free trade agreement upgraded to match some of the provisions in the Canadian pact. . .

December 18, 1987

Because they are so beneficial.

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?

Some Hon. Members:

Hear, hear!

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December 18, 1987