At Issue; 14; Conflict with Canada

Did Troyd to people all over the world that Troyd means automobiles across the river is Windsor Ontario just one minute away in neighboring Canada. Windsor makes cars too but Windsor is not famous. The citizens of Windsor like most Canadians live in the shadow of Big Brother the United States. Big Brother is not watching them and this is one reason for Canada's new anger. This week at ASU examines the marketing conflict between the United States and its closest neighbor. National Educational Television presents At Issue. A commentary on events and people in the news. This week at Issue looks at the conflict with Canada. Commentator is Brian Moore novelist and author of the recently published Life World Library book on Canada. This is the House Foreign

Affairs Committee room. In this room congressman talk about Cuba, Moscow, the Berlin Wall. Next week the problem is Canada a good neighbor most Americans ignore and joining in the discussion will be members of Canada's parliament. Canada is not Cuba yet anti-Americanism is a broad in that land. Canadians once America's staunchest allies are today angry suspicious and insulted. These are Canadians they feel that Americans don't know and couldn't care less about Canada's problems. Yet more American money has been invested in Canada than in any other foreign country. 75% of Canadian industry is owned by American companies. American firms own or lease vast areas containing much of Canada's oil, forest and mineral wealth. Canadians are beginning to feed like the citizens of a banana republic. Their lives are decided in Washington and Detroit.

In international affairs they complain that America wants them to be a tame US satellite. American radar stations ring their Arctic. American televisions and American periodicals pour across their borders. And all is at the time when Canada's old ties with Britain have almost withered away and Canadians are painfully searching for a new identity. The country is wrecked by unemployment and plagued by a growing split between the English speaking majority and the third of the nation which speaks French. In this prickly atmosphere the United States is a natural scapegoat for Canada's frustrations. In recent months these frustrations have been expressed in a series of bitter Canadian American disputes on defense, labor and tariffs. Ignored by most Americans these disputes have been front page news in Canada. Here is what some Canadians are saying. First three students. Now we have a threefold grievance with the United States. And first we have the nuclear arms

grievance. Secondly the immigration of skilled Canadians to the United States. And thirdly we have the American domination of the Canadian economy. The Canadians are thought up with the idea of being second class neighbors to the United States. We are striving for a Canadian identity. Well I would suspect a major credence on the part of Canadians with regard to the United States is the lack of interest on the part of Americans towards Canada. A leading Canadian lawyer Jay Ross Talmi comments on Canadian-American relations. Well my own opinion is that they're at a boat as low a point as they have been in modern times. The leader of Canada's conservative opposition party and the former Prime Minister John Defenbaker. What would you people do in the United States if we made rules against you if you entered into the legislative alliance and we incanded to criticize them. One side of great power

on the other a country with one tenth the population. A leading Canadian historian Frank Underhill. We envy the Americans. We're proud of the fact that we've achieved a standard of living secondary to theirs but we can't help being conscious every individual Canadian's conscious of this as he grows older. He will never be as rich as his opposite number in the United States. The outward invisible sign of Canadian-American tensions has recently erupted in three areas. Canada's government and the American labor movement are involved in a struggle for control of Canada's semen unions. A struggle which is broken out in open violence along this in Lauren's seaway and only the winter freezing over of the river has managed to put this explosive issue temporarily on ice. Defense is also explosive. Many Canadians fear that if their country accepts US nuclear weapons, Russian ICBMs coming over the pole will first be dropped on Canada's cities.

The former Conservative government at one time were in aid on the Canadian promise to accept these warheads. The present government in accepting them has made it clear that this is a gesture to show the world that Canada honors its word. Prime Minister Pearson has said that when this specific commitment has been fulfilled, he will feel free to renegotiate Canada's future nuclear role. In other words, the defense problem is shelved, not solved. A problem very much on the act of crisis agenda is brewing up in the banks of the Detroit River. This is the American Chrysler Corporation in Detroit where an endless line of Plymouth moves off the famous assembly line. But across the river in Windsor, a typical Canadian auto plant, Chrysler Motors of Canada, the assembly line is a glorious hodgepodge. For the Canadian Chrysler subsidiary, produces 64 models of four complete lines. Plymouth, Dodge, Chrysler, and Valiant. That means that the men working on this one assembly line must have parts on hand for 64 different

models and must check that each chassis hits the right motor and is fitted with the proper smaller parts. This headache, 64 models, one assembly line, certainly makes for a more interesting job for the workers, but it also reduces efficiency with the result that fewer cars per man are assembled on the Canadian line each day. And so, with Canadian tariffs added, Canadian auto prices are higher, up to $500 more per model than the Detroit price. Another thing, none of these cars are manufactured in Canada. Chassis, motors, most parts are made in the United States and ship to Canada for assembly and factories which are 95% American owned. Even the recently publicized shift of steuda baker operations to Canada does not alter this picture. Steuda baker, which is only 2% of the Canadian auto market, is still in American cooperation and will continue to have engines and body stampings made in South Bend, Indiana.

So Canada's auto industry remains 95% American owned and the other 5% isn't Canadian either, it's Swedish. A few parts, wheels, hubcaps, etc are made in Canada and because Canadian labor costs are cheaper, these are shipped to the States, a tiny trickle of trade in contrast to the huge inflow of imported parts. To pay for these car parts, Canadian firms send money across the border. Canada's finance minister Walter Garden is trying to stop this flow of money with an auto parts tarot free bait scheme which he launched last November 1st. Well, in the last year, we imported about half a billion dollars and that's about seven and a half billion dollars translated into American terms, but in our terms, half a billion dollars, 500 million dollars more auto build and auto build parts than we exported.

And this represented a big part of our total imbalance in our transactions with other countries. As I said a moment ago, we think that we must bring our accounts in the better balance and we thought a good place to start was in the, with the automobile industry where such a large part of the imbalance occurred. The Canadian auto parts tarot free bait scheme works something like this. Here in the United States is a parent auto company. It makes motors, body stampings and so on. Certain parts for its automobiles are fed to it by independent American car parts makers. The parent company sends some of these motors, bodies and parts north across the border where they are assembled and sold in Canada. Certain parts can be made more cheaply in Canada such as bumpers and hubcaps and these are fed directly to the Canadian subsidiary factory

by independent Canadian parts makers. Because they are cheap, they are also exported in limited quantities to the parent factories in the United States. The Canadian government would like to see more of this type of export. At present, US parent companies pay a stiff tariff to send their goods into Canada. And what the Canadian government is proposing is to rebate part of this tariff each time the export flow of Canadian made parts is increased. In other words, build up Canadian local industries by importing more parts in Canada and in return, the Canadians will make a cheaper for American companies to send their cars and parts across the border for assembly in the Canadian subsidiaries. However, not everyone likes this proposal. Secretary of Commerce Luther Hodges was present at the conference as when the Canadian government told the United States government about its proposed tariff scheme. Later, he had this to say, we think the automobile manufacturers themselves ought to get up on our hind legs. I am not sure they have. Secretary Hodges would

seem to be right. American automakers are playing this one very close to their vests, and most are unwilling to comment on the issue for fear of provoking further action by the Canadian government. The United States government is also reluctant to give the impression that it is putting pressure on the pro-American Pearson administration. But public silence does not mean private approval. We ask Sparry Lee of the Canadian American Committee, an independent study group, how he thinks this Canadian legislation will work out. Well, there is a law that says that if a foreign company subsidizes exports to the United States, the United States must automatically apply a counter-vailing duty. The Treasury Department is now examining the Canadian law to see if it is an export subsidy. Meanwhile, there are some U.S. Parks manufacturers down here that have made some complaints. As yet, neither the Treasury Department nor the Commerce Department has

taken any contradiction. The auto-tariff rebates will be discussed at next week's inter-parliamentary conference in Washington. But it is unlikely that any reelection will be taken until President Johnson meets with Prime Minister Pearson in February. In the meantime, the key question being asked privately by American experts is whether this is an isolated piece of legislation or could it be a test case? This is what Paul Marken Canada's external affairs minister had to say about it. Well, it certainly is the first attempt. Our party's program, as enunciated in the last federal election, which took place about six months ago, was that we were going to do something to stimulate economic growth in Canada, the most effective way by which that could be done would be to assist secondary industry, the main source of additional employment, and the area where unemployment makes itself known first and most effectively. And after we have developed our program with the

guard of the auto parts, the automobile industry, then we will move on to other industries, the aircraft industry, the chemical industry. Admittedly, the latter, for instance, will be much more difficult to work out because it isn't as concrete an industry in the sense that the automobile industry or the aircraft industry is. Now, I'm conscious just as I talk to you about this additional program that I may be creating a misapprehension or creating a non-necessary fear, there is nothing that will not prove to be in the interests of both countries. But the misapprehension and fear remain. The State Department seems to believe that Canadian problems should be solved behind closed doors in the traditional manner of secret diplomacy. Despite

Paul Martin's surmise, the State Department hopes the auto tariff rebates will be an isolated piece of legislation. Canadian Finance Minister Walter Garden has this to say. I don't think that from what we know now that this particular formula is applicable to other industries. Some other formula may. This won't solve our problem. We have an imbalance on current account of a billion and a half, maybe a little less now, but something of that order. And this particular automobile policy we hope within two or three years may correct the situation to the extent of about one tenth. So we've got nine tenths to go and we haven't, and we've got solve it, solve this problem. Well, I don't want to exaggerate our total overall problem is not as difficult as this because we have a surplus in our transactions with other

countries and we haven't got to, we certainly don't intend to balance everything up on a bilateral basis. We're interested in a multilateral approach and if we can get our total current account balance of payments into a reasonable balance on a world basis, that's as far as we would think it necessary to go. Meanwhile, Washington is waiting to see how far Ottawa will go. One of the few people in any official position and either side of the barter who will come in publicly on this sensitive issue is former Prime Minister John Deepen Baker. Who as leader of the opposition is highly critical of Canada's present government? No, up to the government street at present time. I think it's very wrongly done, wrongly applied and will not be effective. We endeavored to bring about encouragement for production within Canada in connection with automobiles. We made changes and that were acceptable to the United States.

There was no objection. The action taken in connection with automobile parts today can only lead to greater division as between our two countries and it cannot be effective in his present form. Canadian auto workers of course are all for this new legislation. Here's what workers on the Canadian Chrysler line had to say about the auto-tariff rebates. More people back to work, the better for Canada, the better for the states too. Not some main item is people back to work. It's got to put a few more people in work here instead of importing all cars and assemblies from the states. We're going to be manufacturing them. Do you think the U.S. companies will retaliate? Wow, I imagine they're pressured by their own manufacturing people to take care of their own interests. I mean, sure, if we get to the home, they're afraid.

We asked, what could the Canadians do about that? Well, look at anyone do a boat calling the shots. I mean they just about all I can say is a little, little top. Because this place is run by the United States. We move to Ottawa, Canada's capital, like Washington, a civil service factory town, placed strategically on the border between French-speaking Quebec and English-speaking Ontario, in this officially bilingual country. In Ottawa's Chateau-Laurier Hotel, unofficial hub of many capital activities, we spoke with Frank Underhill, the Dean of Canadian Historians. He pointed out that Canadians are the world's oldest and most experienced anti-Americans. They were there first. Well, you see, we're essentially anti-American in one sense because we divided this continent with the Americans. Our great Canadian achievement is that we preempted the Northern half and North America from American expansion. That was the meaning of Confederation in 1867,

which we're just about to celebrate in 1967. So we've always been conscious of the fact that we're on the defensive against the United States. And in that sense we're anti-American. The question of what is a Canadian? What makes him different from an American? Preoccupies many thinking people in Canada today. Here is James Ares, Professor of Political Science at the University of Toronto. Well, I think the crisis in Canada isn't a racial crisis in any accepted sense. It's a crisis not a race but a nationhood. It's a crisis of the identity of the nation. What it is, is it worth preserving? It takes some imagination when you begin to think about it, to think of yourself as a North American comfortable. It doesn't take any imagination to think of yourself as a local Canadian or as a Torrentonian or as a Montrealer and so on and so on. And when things are going bad,

they can always appeal to this natural human instinct to blame somebody else. And to somebody else is always the American because he's right next door. He's the natural obvious. Well, the Canadian crisis and I hope that isn't too strong word. I don't know whether it's the right word. It's a crisis of identity. It's a crisis of nationhood. It's a preoccupation with whether the country can hold together and even whether the country should hold together. There's a good deal of soul searching going on as we approach the 100th anniversary of our Confederation as to whether there is going to be a United Canada in 1967, which is something I think that people would have found it very hard to believe 10

years ago or even five years ago. I know myself. I certainly didn't see this impending. This possibly impending break-off of the country anywhere inside. I don't think anybody did. Well, that present looks as if they're going to insist on their French Canadian identity. And let the broader Canadian identity go. There's something for which they're not responsible. Well, I think that is deplorable. It's a tragedy. It's a disaster for Canada. They should continue to feel that way. I think, however, as we settle down, we'll begin to think about this broader Canadian identity. Whether we can achieve it in another century, I don't know. I think we can only achieve it if we manage to work out an American way of life that's better than the American way of life that you've worked out south of the border. And whether we can do that rest with the future. Professor Ongerhill defined this better way of life.

Well, I think it would be our turning out a higher proportion of first-class scientists, first-class literary men, first-class artists, people who are more understanding of the outer world. See, the people who are citizens of a great power inevitably misunderstand the outer world. They find themselves so interesting that they can't take time off to try to understand the outer world. Now, we as a smaller people will just have to understand the outer world. In contrast to Canadian officials who talk freely about their problems, we find American officials in Washington curiously silent on Canadian affairs. This silence, while diplomatic, is often misunderstood by the ordinary Canadian who is not party to high-level conferences and phone calls between Ottawa and Washington, it leads in many cases to the Canadian belief that Americans just don't care about their problems. One American who does care, is Congressman Gallagher of New Jersey, who is House Chairman of the Interpolumentary Committee,

which meets here next week. I think the average citizen of the United States looks upon Canada as not only its closest friend, but certainly its most powerful friend. I don't think that most people are aware of the smallness of the Canadian population. I think what most Americans and most people here in the United States are concerned where I was that Canada is the second largest nation in the world geographically speaking. Certainly larger than the United States, including Alaska. There's been a lot of discussion in Canada about American control of the industry. The word control could be a very frightening word, but this is really not the question. The question is investment and investment in vis-a-vis control and what harm it's doing to Canada. No proof has ever been there's never been any determination

that the investment of American investment has proved and detrimental that a company might do something out of the patterns of economics merely because it's going to serve an American interest. This is not so. Most Canadian economists believe that in the future a close economic union between the two countries is inevitable and should be encouraged. Congressman Gallagher would like to encourage it and is optimistic about the future relations of both countries. Are the Canadians also optimistic? Here is finance minister Gordon. I would think very much so. Canada is not only your immediate neighbor, but we are probably, I don't think it's going too far to say, that we are probably the best friend that the United States has in this difficult and troubled world. I think it's in the interest of the defense of North America

that Canada should be strong and friendly, and I think it's in the interest of the free world generally and in the things that on which there are really no differences of opinion about between Canadians and Americans, that our economy should be growing, that we should not have so many people out of work and that Canadians as a whole should be should feel that they're getting a fair shake. That's certainly in our interest, but I think it's in your interest to former prime minister John Deepen Baker. We also have and we constitute today the only safety deposit box in all the world, in all the free world, of the minerals that are necessary for survival. You had your payday report, was it in 1950? Yeah. 52 or 3?

That report shows that by 1970 or 75 you're going to be short of those things that are needed for the preservation of the industrial machine. We have those things. We need your investment, the other hand, we need your cooperation too. When you ask me who their anti-Americanism is part of Canadian policy, not at all, but the right heist I believe, and I'm not speaking now for the prison government, that there is no anti-attitude in being cruel Canadian, in standing for the things that are necessary for the maintenance of Canada's independence. External affairs minister Paul Martin. It mustn't be forgotten that you have a very, the United States is a very favorable balance of trade in its favor, that we are your best customer and anything that would seriously affect us is bound to have its consequences

in the United States. So I regard these boasts of retaliation as natural expressions, irritations, which, however, will not really seriously be pursued. Some of these disagreements may be ironed out at next week's United States Canadian Parliamentary Conference. President Johnson and Prime Minister Pearson will meet shortly. Yet the essential problem remains. The boundary between the two countries is simply a geographer's line. The natural boundaries of this continent run from north to south, not east to west, and so a Minnesota farmer is more like a Saskatchewan farmer than either as like a citizen of Montreal or New York. Yet Canadians do not want to be Americans, and from now on the problem will be one of forming a true partnership. America needs Canada, not just for defense, but because only in the huge land

mass of Canada, will future generations of Canadians and Americans find the natural resources in the living room, which this continent must provide them. As a Canadian who now lives in the United States, I feel that Americans can no longer afford to ignore the irritations and aspirations of their closest neighbor. An American industry must treat Canadians as something more than the managers or branch plant operation. But as a Canadian, I feel that Canadians must stop looking for scapegoats. They must realize that they need America. For paradoxically, it is only by closer union with the United States, economic union, that Canada, torn by internal dissents and plagued by unemployment, can hope to survive as an independent nation. This is NET, National Educational Television.