February 14, 1939 (18th Parliament, 4th Session)

LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

In the Liberal party of that day, there unfortunately were some whose views on this question, for reasons best known to themselves, came to differ from the views of the party generally, but there never was any question as to the position of the Liberal party of Canada itself with respect to the reciprocity agreement of 1911.
As I have said, when the agreement was introduced there was general enthusiasm on both sides of the house; but when it became apparent that it would be possible to make a political football out of what was a great economic reform the temptation of possible political success became too strong for hon. gentlemen opposite, and in the House of Commons after Sir Wilfrid Laurier's return the enactment of the necessary legislation was deliberately obstructed. The obstruction became so persistent that Sir Wilfrid Laurier dissolved parliament and went to the country on the agreement itself, the Liberal party staking its entire fate upon this great reform; more in the way of freedom of trade between Canada and the United States.
I remember very well hearing Sir Wilfrid Laurier say at that time that it would probably be at least a quarter of a century before another opportunity would come to Canada successfully to negotiate a reciprocal agreement with the United States. Sir Wilfrid pointed out what was all too true, namely that seldom in the history of the United States and Canada have governments been in office at the same time in both countries each of which was favourable to the lowering of tariffs. At that time there was in the United States a government that favoured the lowering of tariffs. In large part it was due to this fact that the Liberal administration of the day was able to make an agreement with the administration then in office in the United States.

Well it took about twenty-five years, almost to the year, to bring about that combination of circumstances again, with administrations in power in both countries sympathetic to a reduction of duties on products and other commodities passing across the international frontier. In the United States they have a government which has pioneered in its effort to bring about a reduction in trade restrictions, not only with its neighbours but with countries in all parts of the world. No man is more outstanding in world history to-day as a great reformer in the matter of the furtherance of trade between nations than Hon. Cordell Hull, Secretary of State of the United States. His example and his services to the world in this particular during this period of its trials, I think, are unparalleled by those of any other individual in his own or in any other country. Mr. Hull has believed and as consistently stated that the world was heading towards a condition of inevitable strife and war if the different countries continued to develop theories of economic nationalism and base their legislation upon those theories, becoming more and more nationalistic, more and more isolationist, and obliged in order to satisfy their peoples to resort, as a consequence of their restricted trade, to measures which were anything but in their real interest. For years past he has seen and pointed out to the different countries of the world that restrictions upon trade leading to increasing economic nationalism or economic imperialism were certain sooner or later to bring this world to destruction, and he has fought hard and valiantly to rectify the situation.
When the previous administration in this country-the late Conservative administration -were in office they had an opportunity to join with Mr. Hull and the United States government in effecting a measure of reform in the matter of greater freedom of trade between this country and the United States. The president had been given special powers by congress to reduce duties and by executive action to effect reciprocal agreements without the necessity of such agreements being submitted to congress for approval. There were certain limitations placed upon the powers given to the president. He was not authorized to reduce any duties by more than fifty per cent. He was not authorized to make an agreement for a period longer than three years, except with the understanding that it would continue thereafter subject to six months notice. But within these and certain other limits he had full authority to make reciprocal agreements with other countries. The late Conservative administration began negotiations

Canada-UjS. Trade Agreement
with the United States for a trade agreement, and I should like to draw attention to the objective which they saw at the time as a part of the wisdom of successful negotiation. According to the correspondence which took place with the United States, they felt that a trade agreement would be mutually advantageous to both countries; but they went further and stated very clearly that they believed a trade agreement between Canada and the United States would have great international significance as well and might even be of service to the world. And may I say that they had all the advantages which the present administration has had in the personnel of those in the public service, skilled in negotiation, to help them in working out the details of an agreement.
Here may I pause to join in what was said by several other hon. members in the course of the debate on the address. I doubt whether any country has been more fortunate than Canada has been in the loyal, able, efficient and highly skilled service which has been rendered by members of the public service who assisted the ministry in negotiating the trade agreements at Washington. I do not think it is possible to commend these services too highly. In that statement I would include not only their services to Canada but may I say, along with their own negotiators, to the United States, because the benefits secured under these agreements are mutual. I would go further and include services rendered not only to Canada and the United States, but the United Kingdom and other countries as well. I do not believe a greater service could have been rendered by any three men at this time to the countries I have mentioned than has been rendered by Mr. Wilgress, Mr. McKinnon and Mr Robertson, the three able members of our public service who have had most to do with studying all implications and working out all details in the negotiation of the Canada-United States agreements.
As I have said, hon. members opposite had the services as we have had of these able men. They had before them, as a result of negotiations which ran over the greater part of one or two years, all the information and all the particulars necessary to enable them exactly to decide what benefits they could obtain and what advantages to Canada might accrue, were they to enter into an agreement with the United States. But as hon, members who sat in the parliament of that day will remember, we could never get any information from the prime minister of the day as to the progress of the negotiations. We could get no information as to how the administration was getting along. We were told that they were busily
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engaged-but nothing more. Parliament prorogued in July without obtaining any information as to the extent to which negotiations between Canada and the United States were likely to be successful.
During the campaign of 1935, which took place in September and October, the correspondence that had taken place in the previous year was made public for the first time. The correspondence went a long way towards disclosing what might be possible by way of advantage to Canadian producers, and of advantage also to Canadian consumers, were a trade agreement effected between the two countries. However, in the campaign no definite commitments were made by the Conservative party of the day. All they did was to exhibit to the electors what was alleged to be the course of negotiation up to that time.
I have in my hand the correspondence which took place between the government of that day and the United States government, as set out in an exchange of notes between Mr. W. D. Herridge, the then minister from Canada to the United States and Mr. Cordell Hull, the Secretary of State for the United States. Perhaps this would be as good a moment as any to see from what point of view the negotiations were approached, because it serves to throw additional light on the value of what has been effected since that time.
The first communication which set out the position of the then government of Canada was dated at Washington, November 14, 1934. It is signed by Mr. W. D. Herridge and is addressed to the Hon. Cordell Hull, Secretary of State for the United States, at Washington, D.C. In that note the minister of the day said:
You will recall that when the Prime Minister of Canada visited Washington in April, 1933-
That was the Right Hon. R. B. Bennett-
-at the invitation of the president of the United States, the development of trade between the two countries was sympathetically discussed.
It is interesting to note that that was as long ago as April, 1933. It was September of 1935 before this correspondence was given to the Canadian public. But as early as April of 1933 the President of the United States himself had approached the Canadian government with a view to seeing if it might not be possible to work out an agreement of reciprocal advantage.
On April 29, 1933, Mr. Roosevelt and Mr. Bennett issued a joint statement at the end of their conversations, which concluded as follows: "We have also discussed the problems
Canada-U.S. Trade Agreement

peculiar to the United States and Canada. We have agreed to begin a search for means to increase the exchange of commodities between our two countries, and thereby promote not only economic betterment on the north American continent, but also the general improvement of world conditions.
Why was it that that very laudable aim was never in fact carried out or attained? The answer can be given in little more than a word. In that day there were in the government of hon. members opposite exactly what we see in the opposition before us at the present time-two wings of a party, the first of which was inclined slightly towards more in the way of freedom of trade. My. hon. friend the leader of the opposition (Mr. Manion), I should hope, would have been one of that number having been strongly of that point of view at one time, and the hon. member for Leeds (Mr. Stewart) who, speaking the other day, pointed out that he thought his party had always favoured something more in the way of freedom of trade, and was rather favourable to a reciprocal trade agreement, would I hope have been another. But if we look across the aisle to where he sits we come to the hon. member for St. Lawrence-St. George (Mr. Cahan)- and, remember, he too was a member of the administration of that day. These three gentlemen were members of the same administration, an administration which had to do with the question of negotiating a trade agreement between Canada and the United States. What was the nature of the remarks of the hon. member for St. Lawrence-St. George respecting a trade agreement with the United States, when he spoke in a previous debate of the present session? The hon. member has a number of pet aversions. I believe perhaps one of the strongest is his dislike of the United States, and particularly in those matters which relate to trade. He said in the house, and has said repeatedly outside of it, that there is no use in Canada trading with the United States, because we will always get the worst of it; in some way or another there is, he believes, an influence at work in Washington which makes it impossible for Canadians to protect themselves in the matter of their own interests.

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED STATES-MOTION FOR APPROVAL SUBJECT TO REQUIRED LEGISLATION
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