The border in question; Two for trade, trade for...?

The border in question this program is produced and recorded at the University of British Columbia Canada under a grant from the National Educational Television and Radio Center in cooperation with the National Association of educational broadcasters. You. Would. Like. To see. Or.

Two for a trade and trade for the fourth of 10 programs devoted to an examination of Canadian American relations to for trade. Trade 4 is a brief look at economic problems between the two countries. Hardly a day goes by now without one or more of Canada's 200 daily newspapers fretting and nagging over the Dominion's economic position. And this means usually the northern neighbors economic position in respect to the United States. The U.S. has had experience in various parts of the world with that conflict between her own economy and the trade and economy of developing

countries. And so far the experience with Tenet in this respect have not had too serious repr cautions for either nation. But it may not always remain so. Canada is growing Canada's post-war expansion is such that it is barely recognizable to those who visited her before the war. Anthony Eden former British prime minister said a few years ago gentlemanly achievements of your great country. It seems to me have got many lessons for the outside world. You do not preach your practice tolerance. Men and women from many of them. Have brought to this country that engine car cares which of you have been assimilated to enrich the Canadian nation. Yeah in Vancouver. The gateway to the Pacific. You have no job by your

enterprise. A vigorous and prosperous community. Since my last visit to 1925. The expansion of industry I didn't he'd been remarkable. But even more remarkable is what has happened to the Canadian economy. For example the widely read Canadian magazine Toronto Star Weekly has asked editorially. Will Canadians own Canada. The paper then re cited evidence which Canadian suspect indicates a negative answer to the question. The editorial said nearly half of all Canadian manufacturers is as American owned. Fifty two percent of Canada's mining in smelting 71 percent of petroleum and natural gas is own being controlled in the United States. Well American tourists and incidentally Canadians value highly U.S. tourist dollars

are sometimes disturbed by such editorials and public discussion which to them has an anti-American ring. They are also sometimes surprised to discover that in Canada they usually dose subject of economics is a razor sharp controversy to many Canadians it appears that the annexation which the bluff and bluster of Manifest Destiny failed to accomplish may be quietly accomplished by the pressures of trade and commerce. Surprising to many Americans is the simple fact that most Canadians want no part of union with the United States and hence the conflict in this economic drama. Professor JM To teach is an American economist at the University of California at Berkeley. And this is how he sees this problem. I think that the need for the improvement of Canadian United States relations

currently is only to be matched by the probability of their further deterioration. Despite the present recession in our country and yours at no time in the 20th century has the brisk pace of Canadian economic development been more strident. At no time has the national force of a Canadian Canada been more potent. Prime Minister John Diefenbaker did not invent Canada's late fear of her giant neighbor but to use it successfully in his campaign and it contributed heavily to his victory over the liberals. He promised to do something to save gard the Canadian identity and he is keeping his word. For example a new code

and largely at maintaining Canadian culture recently was given to Canadian television by the board of broadcast governors. They laid down the rules in the future Canadian broadcasting stations must broadcast a minimum of 55 percent of programs originating in Canada. Earlier this year the government issued new oil and gas regulations designed to insure Canadian participation in the development of oil and gas in the Northwest Territories and on the offshore Arctic islands. All companies are taking out a lot of gas and oil permits in the area must be incorporated in Canada. Private concern of the do not offer stock on the market must prove that they are at least 50 percent Canadian owned public companies must make their stock available to Canadian investors. The Royal Commission for Canada has suggested that

serious consideration be given to the provision that Canadian firms follow by Canadian policy which would mean purchasing a good deal of their goods of course from Canadian firms rather than the United States. Perhaps what is most interesting to notice is in 1960 Mr. Pearson who now of course is the Liberal leader who hopes to be the next prime minister and who the New York Times last week wrote was considered to be a good friend of the United States recently sounded a warning in a public address. Again the danger of an elephant from across the border I quote. He said How do we escape the colonial frying pan only to have

jumped into the Washington fire. Have we sold our birthright for a mess of below par. United States dollars. These are strong statements from leaders of the United States closest friend and ally. Regrettably I think that the momentum of Canadian nationalism has come at a time when the need for understanding by our friends and allies is it is probably its most critical point because as Mr. Pierston refers to United States below par dollars it so happens that the United States itself. Is now in a gold crisis Professor Latif

expressed these sentiments that the United States Canadian relations conference at the University of Washington. He went on to say in so far as United States trade with Canada is concerned we used to have an export balance with Canada about of about one billion dollars. This was so for nineteen fifty six fifty seven our export balance was reduced in 58 59 to six hundred eighty four million for 1960 on a yearly basis. It is now only five hundred million. Moreover the United States obligations to Canada and other would be accumulation of United States liquid assets in Canada has increased from 1 billion in 1955 to 2.5 billion in 1908. So that in so far as short term American liquid assets are concerned I positioned visa to Canada.

It's similar to opposition views every the rest of the world. The fact of the matter is that alas our friends and allies assist us in dealing with this problem intelligently. There is the greatest danger that the United States will be compelled to invoke restrictionist policies. It is for this reason that I mention for my Canadian friends that if ever there was a time of danger in our mutual relations it is now because Canadian feelings are higher and American circumstances may not be able to handle them even as badly as we've had in the past. No what we've done of course is put the cart before the horse. The reply before the question. However in this way we've started by showing that Americans are as concerned as our Canadians about their mutual economic relations

at least on the academic level if not always in the supermarket. Well what is what is it that caused this American concern. A convenient date to set this concern might be 1955 when the Canadian government appointed a royal commission similar to an investigating committee to quote inquire into and report upon the probable economic development of Canada and the problems to which Development appears likely to give rise unquote. The Canadian appointed to head the commission was Walter Gorton. Two years after his appointment the Gordon commission in a well documented report warned that quote It is quite clear from the evidence that many Canadians are worried about such a large measure of economic decision making being in the hands of nonresidents unquote. Years later Walter Gordon was still receiving applause from Canadian audiences by reiterating these sentiments. This is how he expressed himself at a University of British Columbia conference.

We should think twice before concluding that the same approach would be desirable on this continent. After all. Some of the keenest promoters of the Common Market idea in Europe of Polish have political union as their ultimate objective. A union incidentally in which no one of the present countries would wield a dominating influence. A similar approach on this continent might have a very different result if eventually it led to some kind of political union between Canada and the United States. In our case because of our much smaller population this would really mean absorption by the United States. And this is a prospect that I for one would not look upon with relish. Not that I'm in any way anti-American. But just because I think Canada has something to contribute to this weary troubled world as a

separate independent nation with no ax to grind. At the expense of any other country anywhere on this connect connection the commission had quite a lot to say about the extent to which Canadian industry is owned and controlled by non residents mostly by citizens or corporations in the United States. Foreign investment has been helpful in the rapid development of our country and we've gained a great deal through the connections that many of our larger companies have with their parent companies in the United States and elsewhere. These benefits include access to management know how technological developments and research and in the case of many of our. Primary Industries to assure markets for their products. But looking at the picture as a whole. I think we have allowed this trend to go too

far. There is no other country in the world to my knowledge certainly no country that is as fully developed economically as Canada which has so much of its industry controlled by nonresidents. We still have to reverse the present trend. If we really wish to maintain our identity as a separate nation on the North American continent that is the Canadian view which was embodied in the report of the government appointed Gordhan commission. It is perhaps simple economic nationalism but which Canadians point out to American was once and still is US policy. What the Gorton also stated in the so-called private sector. Many of our largest companies which we had a dominating influence in their respective industries are controlled and directed not by individual Canadians but by people who reside outside our borders.

Canadians do not make the day to day decisions in the economic sphere. Again this is hardly what we mean when we talk about free enterprise. Certainly it's not free enterprise in any national sense insofar as Canadians are concerned. Now there are of course large sections of Canadian economic life that still are relatively free. Small Businessman professional man and farmers can still be independent up to a point. And speaking as one of them I hope this will long continue. But taking the country as a whole. I think the term mixed enterprise rather than free enterprise would be a better way of describing it. Like the majority of Canadians I dislike too much government interference too much bureaucracy too much red

tape and too much government control will always be particularly obnoxious in a federal state like ours with its great differences in points of view and in the nature of the economies of the different provinces. But I'm afraid that in the age in which we live governments provincial as well as federal must be prepared to take the initiative from to give the lead upon occasion. If Canada is to remain free and independent and if we're to have high levels of employment throughout the country. No Professor expresses an American view of the problem of economic nationalism and trade imbalance with the United States. The solution to our problem would rest on the most solid value. If the initiative were taken by our friends and allies rather than ourselves. At the moment do United States dollar is now a much stronger position than it has

been for a number of years because on goods and services our exports are greatly increased. There is no evidence that the United States prices have been rising more rapidly than those of other countries. Consequently the crisis as of the moment is primarily one of capital flight of hot money. When you deal with capital flight your actions must be dramatic both in deed and policy. I couldn't imagine a better situation than under the leadership say of the United Kingdom with Canada right. And countries such as The Netherlands France Sweden and Germany called the conference of the earlier stage when the new president took office and suggested that as and previous occasions they respectively agree that they will not use the dollar balances to convert into gold. The United States happens to have two billion dollars with the International Monetary Fund. But you could utilize

at any time to purchase other currencies and therefore prevent a run on the dollar. This requires a form of collaboration between the government that we have not recently seen. It would also require some adjustments in interest rates. The United States rate of interest at the moment is lower than that of any other country in the world with the exception of Switzerland as other countries in Europe find that their own boom is climbing. It would help if they would lower their rates of interest and it probably would be a good policy under the circumstances. If we would raise our rate of interest a little so that it wouldn't be profitable for Americans and others to move funds from the United States abroad. Also with the exception of Japan United States goods and services are today discriminate against the world trade more than those of any other country.

This notice requires a different kind of approach on the part of our friends and allies of the one we usually hear from them. If all these measures are not successful as a conference in a package deal probably with a statement of the United States that we do not intend to raise the price of gold or do we intend to lower the value of the dollar compared to other currencies. If such a conference is not successful then other measures will have to be involved. They will be probably first and foremost a restrictionist policy against our best friends and allies our most important writers and a Canadian view of another aspect of U.S. Canadian economic relations. Now this brings us to the basic to a basic question. About which we should make up our minds before we can discuss intelligently the most appropriate policies for Canadians to pursue

and that is the importance that we attach to retaining our pull of our economic and political independence. For as much independence as is possible for any single nation in this drinking world farfel superstate. There are tremendous pressures upon us to integrate the Canadian economy more and more with that who we are with that of the United States. Hardly a day goes by it seems that some Canadian company is not purchased by a large US corporation or by its subsidiary in Canada. Hardly a day goes by. Without someone making a speech or writing an article suggesting a continental approach to one or other of our economic problems or asking if it is possible or could really make sense for a small country like Canada. To struggle to remain free and separate. From an enormous neighbor with 10 times the

population and 14 or 15 times the value of our annual output. The fact is. That in recent years whether we like to admit it or not. Canada has been losing steadily a considerable measure of our independence both economically and politically. If we're sensible we should decide either to accelerate the pace of further integration with the United States politically as well as economically trying to do it later to take steps without delay to reverse the present trend either course in my opinion. But until difficulties and some unpleasantness free trade with the United States on any appreciable scale. Even if the Americans were willing to consider this would bring about a great disruption

of Canadian industry and serious unemployment. Certainly during an extended period of readjustment and probably for longer. And if this was not accompanied by moves in the direction of some sort of political union or affiliation we might find ourselves in a very difficult position. If at some later date some you would ministration in the United States decided to abrogate the arrangement. On the other hand. We could not hope to reverse the present trend until we regain some of our lost independence without paying some sort of price in terms of our last rapid rise in our standard of living. The amount I think of great around employment. This is a price Incidentally the Canadians have always been prepared to pay. Ever since Canada became a nation when the situation was explained to them.

But for the border we could not hope to accomplish our objectives quickly to be successful. We would have to work at it for many years and with great determination. Now a case can be made for either of the courses mentioned faster integration with the United States or the regaining of our independence. I would submit that there is no excuse whatever for failing to face up to the dilemma in which we find ourselves today. To do nothing. To refuse to recognize a situation that confronts us or to admit its implications will lead inevitably to our becoming a more or less helpless satellite of the United States. How is it possible for the United States to maintain this position.

The position Professor Latif refers to is that of the United States as leader of the Western world. But Tenet is but one nation in the Western camp but it is a nation which is increasingly vocal in complaints over U.S. domestic policies such as restriction on Canadian imports. One thing to put it back to me just the effectiveness of her domestic expansion growth would be politically intolerable for present America and it would be a travesty from an economic point of view it decline to be external ballasts. We permitted this to restrict the policies that we must follow domestically given. This is the problem. What do we find the governor of the Bank of Canada recently stating and he's sure the governor of the Bank of Canada James Coyne

said many things which troubled us statesmen and economists and indeed troubled his own finance minister though their differences are said to have been personal and over methods rather than over aims. Both the Canadian government and Mr Coyne are avowed Canadian nationalists. But here is the type of statement which troubled Professor Latif heard her briefly from discussion in regard. To the curriculum. The writer for the Crimson. Probably stuck to the picture of the law going to create. Such a program for fun to read. The way we're here. We're going to be probably we're going to we're. Creating a payment within three years. It will be a great

thing and so you want to be in the media in the country. Money and creating hearing opportunities for them. Being focused. Or promoting. The rate of economic freedom. And you're a human being for him about. Many of these. Given fresh matter. For me I'm only. Going to take a. Direct crit. Clearly again at a time in history when the United States needs the greatest assistance a normal political figure to an American event

to take to taking a stand which will be most inimical to Canadian long term interests and to those other two countries. If we really do wish to retain her separate identity as an independent nation. We will have to re-examine our present dependent foreign policy and do something about stopping and then reversing the trend under which such a staggering number of our most dynamic industries have fallen into foreign hands. What then is a sampling of the conflict in Canadian United States economic relations cozy as they are they are seen as a threat of supplication to Canadians whether they be in a Kamloops supermarket or a Bay Street Stock Exchange concerned over their national survival. The northern neighbors are wondering whether in dealing with a giant trade for two really mains

two for trade or just one for trade. The border in question is produced in cooperation with the National Association of educational broadcasters. Narration And scripts by film across production by Ajax my God. This is the end E.B. Radio Network.