Mr. A. B. Weselak (Springfield):
Mr. Speaker, I welcome this opportunity at this stage of the debate to say a few words of a general nature in support of the government's action in entering into the trade agreement with Japan. My reasons for so doing stem from several considerations, foremost among which are our export trade and our continued resistance to the expansion of communism in eastern Europe and Asia.
Japan in the last war was one of our bitterest enemies and fought us and our allies with all the resources at her disposal. Upon the termination of the war, on September 8, 1951, the treaty of peace was signed with Japan at the city of San Francisco. This treaty was the subject of considerable criticism throughout the western world but
the wisdom shown in pressing for its finalization has justified this action on the part of the western allies.
As a result of this treaty the western world has gone along with Japan and assisted her in rehabilitating herself in a democratic manner.
We must not forget that following the war and it is no secret that even today the peoples of Japan are divided as to where their loyalties should extend and to what extent they should participate in world affairs. The first minority group in Japan consists of the communists who urge the newly elected Japanese parliament to break its ties with the west, refute the San Francisco peace treaty, reject its present mutual defence assistance agreement with the United States and line up with the communist-dominated peoples of Asia.
The second group-the neutralists or right wing of the socialist party-advocates an isolationist policy whereby Japan would take no part in world affairs. This obviously is not a practical solution to their problem in view of their geographical position and the present state of world affairs.
The other group, which is by far the largest, favours a rejection of the communists' attempt to make Japan another satellite of Russia and China. Japan, situate as it is close to the shores of Asia, cannot be neutral but if it is to stand against communist aggression and expansion in the East it will require the military and economic support of the United States, Canada and the other western powers.
Hon. members know from their personal experience that many lasting, trustful and valuable personal friendships are created among individuals as a result of business and professional association. In their daily contacts they get to know those whom they can trust and to what extent. I think a parallel can be drawn in international relations. The hand of friendship has been extended to Japan by the western world. It has been gratefully accepted. This was particularly evidenced when our Prime Minister visited that country on his world tour, where not only was he met by the Japanese dignitaries but also by the school children who lined the streets in an expression of friendly welcome.
It is my opinion that friendly trade relations with Japan will do more than anything else to convince the Japanese people that we are sincere in our desire to have Japan as an ally; that we are prepared to assist her in her resistance to communist domination and welcome her membership in the fraternity of free and democratic nations. In
Trade Agreement with Japan the last war we found that Japan was a power to be reckoned with and no opportunity should be lost to encourage her alignment with the West in the world power struggle.
The considerations so far enumerated would be enough in my opinion to justify the entry of Canada into a trade agreement with Japan, but there is another very important consideration and that is our need for foreign markets. In Canada, which is so dependent on international trade, every sensible person wants more trade with everybody. There is no doubt that more than any other country in the world we depend on our foreign trade for our prosperity. The United States, which is the only other country of the world with a standard of living comparable to ours, relies for her prosperity on exports to the extent of only about four per cent, whereas Canada is dependent upon her exports for about 30 per cent of her national income.
To agriculture our continuity of trade is of paramount importance. Our wheat crop is now averaging in excess of 500 million bushels of which domestic consumption, including grain used for seed and feed, would not exceed 140 million bushels. Of a crop of 136 million bushels of oats we exported 65 million bushels, and of a crop of 176 million bushels of barley we exported 119 million bushels. In addition to the export of grain, substantial stocks of other farm and dairy products have been exported to other countries to add to our national income.
In addition to the export of farm products, our exports of minerals, processed and manufactured goods have been substantial. The export of these commodities is very important, not only to agriculture but also to labour and to industry.
Since the war our trade with Japan has grown steadily and at the risk of repetition I would say that in the calendar year 1953 our exports to Japan totalled $118,500,000 while our imports amounted to $13,600,000. Our chief sales to Japan consisted of $52,433,562 of wheat, $17,496,915 of barley, $7,014,280 of pulp, $1,380,565 of grass seed and other lesser items. In the year 1953-54 Japan's crop quota was 36,744,000 bushels. She had purchased from Canada to April 30 of this year 11,690,000 bushels of wheat. This, together with purchases from the United States, has almost filled her quota. This figure includes only purchases registered under the international wheat agreement and information available indicates that other sales outside the agreement have been made. Since April 30, 14 further cargoes have been sold, which at 350,000 bushels per cargo, would amount to approximately 5 million further bushels, bringing the total well over
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Trade Agreement with Japan 17 million bushels to date with the remainder of the year's purchases to be anticipated. These facts, together with the statement by the Minister of Trade and Commerce (Mr. Howe) to the effect that "steps have been taken to safeguard the position of Canada in the Japanese market for the next two years" furnish, I believe, sufficient evidence to justify a favourable and optimistic attitude in regard to our future trade with Japan.
On this occasion I would like to take the opportunity to commend the Minister of Trade and Commerce (Mr. Howe) upon his work, the work of his department and the *agencies under his direction, for their increasing vigilance and their aggressive policy in seeking markets for our products. The department's trade representatives in foreign countries have been doing a tremendous job of promoting Canadian sales. In addition the wheat board has maintained a vigorous policy of seeking out and maintaining markets for our grains.
A Canadian grain and flour mission of the Canadian 'wheat board, headed by Mr. Riddel, recently returned from a tour of the Asiatic countries where they had been seeking markets for our Canadian grain. The delegation was well received in Japan and found that Canadian wheat was very well liked, particularly in relation to quality which they found to be better than the average quality of American wheat they had been receiving, and all indications were that Japan would continue to be a good market for Canadian wheat in the years to come.
Factors which have contributed toward the popularity of wheat products in Japan in preference to rice have been, firstly, the shortage of fuel for cooking purposes in the homes and, secondly, the fact that many Japanese women are occupied in working during the day. Bread is a much more convenient form of food by reason of these considerations and is growing in popularity. It, therefore, seems reasonable to assume that our wheat market in Japan is established and that in the course of time it will increase, provided Japan can obtain the foreign currency to purchase our products. A similar consideration applies to barley. Our exports in the past year of barley were valued at $17 million and the prospects of increasing our exports to Japan of this commodity are also >very good.
Our great exporting industries are also searching for larger outlets and industries in British Columbia have again taken the initiative as they did in the matter of marketing their fish products, and a delegation of the Vancouver board of trade, including an
official representative of the British Columbia government, went to Tokyo early in April to seek new markets for Canadian goods. The prospect of obtaining further markets are bright. A recent estimate in Foreign Trade, a government publication, showed that Japan is urgently in need of over three million housing units to ease the serious housing shortage in Japan. Assuming that the average two or three-room house requires about 7,000 board feet of lumber, then, a market exists for a considerable amount of Canadian lumber. There is no doubt that if the needs of the Japanese people were given careful study other buyers could be found for many Canadian products and raw materials.
We must face the fact that if Japan is to continue buying from Canada at her present rate, or if as may well be, her imports from this country are to increase, then she must sell more to Canada. I believe this agreement is a recognition of this fact and a step toward retaining this market which we have had the good fortune to obtain. If the agreement has the effect of more Japanese goods being imported into Canada, which will likely be the result, they necessarily must compete with the Canadian manufacturers and indications are that this competition will be felt mainly in the toy, textile and electrical products which Japan can make much cheaper than can our Canadian manufacturers.
One of the terms of the agreement, incorporated by way of a communication addressed to the ambassador of Japan from the Secretary of State for External Affairs (Mr. Pearson), dated March 31, 1954, and set QUt in the Votes and Proceedings of the House of Commons for Wednesday, March 31, 1954, at page 7 of the addendum, provides, and I quote:
1. Ii, as a result of unforeseen developments and of the effect of the obligations incurred by Canada under the aforesaid agreement, any product is being imported into its territory in such increased quantities and under such conditions as to cause or threaten serious injury to the domestic producers in its territory of like or directly competitive products, Canada will be free, in respect of such product, and to the extent and for such a time as may be necessary to prevent or remedy such injury, to establish values for ordinary and special duty purposes.
2. In determining whether values should be established in respect of any product pursuant to paragraph 1 and in determining the level at which such values should be established, Canada will take into account the prices of like or directly competitive products, if any, being imported at that time from other countries.
The inclusion of the right of Canada to establish values for ordinary and special duty purposes for the purpose of preventing
serious injury to domestic producers of competitive products, together with the provisions relating to unfair trade practices, provides industries affected with an adequate safeguard against indiscriminate competition from Japanese imports. This power will have to be exercised by the government with great care in accordance with the spirit of the agreement and in such a manner as to promote the national interest.
Large surpluses of goods, especially agricultural products, hang over the market. We must maintain our present huge trade in other markets, and that is our basic problem. This problem will not be cured but will be greatly worsened by restricting the international trade on which this nation largely lives, and therefore I urge the government on this occasion to exercise the power reserved to it in the agreement only when conditions warrant their use and, if possible, sparingly, but always in the interest of the Canadian economy as a whole.
In conclusion I would like to emphasize that this trade pact is not only a trade agreement as such; it is a symbol of Japan's desire to join the fraternity of nations in the free world, to work with them in friendly co-operation toward a solution of the grave problems which face the world today. Our government, in negotiating this trade treaty, has accepted the fact that Japan must sooner or later live by her own exports; that she cannot subsist upon voluntary gifts, nor can she carry on the one-sided exchange of goods which has been the case in the past. The Japanese people must be assured that their alliance with the West is not only sound in military strategy but assures them a tolerable life.
Topic: TRADE AGREEMENTS
Subtopic: CANADA-JAPAN RATIFICATION OF AGREEMENT SIGNED AT OTTAWA MARCH 31, 1954