Winnipeg Free Press

Winnipeg Free Press (Newspaper) - May 19, 1985, Winnipeg, Manitoba Winnipeg Patti May Page by Richard Lipsey special to the free press Ottawa free Trade area with the United states and Canada i the most important Choice facing Canada in this i think much of our future Prosperity and growth depends upon what we do with this twice before in our in 1911 and we were faced with the possibility of a free Trade area with the and Canada said today the world is Canadian manufacturing firms have grown and find themselves increasingly Able to penetrate foreign with that maturing of Canadian the american Trade barriers both tariffs More in the growing threat of no Tariff barriers threaten to do to us what we did to the Ameri cans at the beginning of this Cen a second major difference is a tremendous growth of pressure from the newly industrializing countries Spain and if we try to protect our present jobs by freezing our present Indus trial we will run head on into Competition with these and that a Competition that in the Long run Well we must move up we must get goods that Are up Market relative to the newly industrializing coun added benefits if we insist on producing their we will have their living if we can produce things that they and buy the things that they then our Trade will go not Only with the but with third since the typical Industry has at the beginning of the it was a Large Indus try producing a fairly Homogene Ous such As where the size of the Plant was the most important determinant of economies of today the typical Industry prod uces a very wide 300 or 400 different kinds and grades of for in a Small Market like we try to produce under Tariff Protection the whole Range of we cant get the production run that needed to write off the costs of tooling up Over a Large amount of so we dont get world competitive when you get free you get specialization within the product Range in an and you find that you produce a smaller Range of products at a larger and hence lower if you look five years to pro stick with our present policies does not mean staying where we Are economically it Means change and change in unsatisfactory i if we stay with the status let me make several Points o our Only Hope for gaining Access to foreign markets is with the Gatt general agreement on tariffs and and though we should push the Gatt for All its the Outlook for major improvements in Trade liberalization through the Gatt is really not at All d it leaves us without secure Access to a Market of Over 100 million we need that Large Market to get the Long production runs that give you world competitive d it provides us with no insula Tion against the rising tide of d it does Little to Force our adaptation to the newly industrializing we need both a Carrot and a stick if were going to move up the Sticks in terms of Competition from the newly industrializing the Carrot would be a free Trade area with the pro Viding Canadian firms with a secure Large d it leaves in place the incentive for Canadian firms to directly invest in the in order to serve the Market and take jobs with we must and we see the Only Way to move is a More outward looking policy that gets us better and More secure a Cess to foreign with Al most 80 per cent of our Trade going to the that really Means the we can do it two we can do it piecemeal or across the we tried it piecemeal with the sectoral approach in the final months of the Trudeau govern ment and that didst get us very Siren Call the latest Siren Call is the so called functional where we try to negotiate piecemeal containment of no Tariff this will take an enormous negotiating would take us to the Congress three or four years from now with a detailed piece meal treaty attacking particular no Tariff and the Evi Dence is that Congress is not willing to for Good Rea i its no Tariff barriers to Trade the Only game in town is an across Leboard free Trade which we abbreviate to for Canadia american free Trade it has the enor Mous advantage that you Start with the Assumption that every thing will be so you Start with the difficult cases included As Well As the easy and then if there is bargaining you bargain about the faced with what seems to us to be an overwhelming economic Many canadians fall Back on deep seated fears of a political and social looking at it we feel that a caftan would not Compro Mise our political and social inde since we have probably dismantled something like 80 per cent of our restrictions on Trade with the and the rest of the nobody that i know says we have lost our political Independence As a result of so if we get rid of the remaining 20 per do we fall off the Cliff and lose our political Independence i think Canadian culture is deeper rooted and stronger than Many other canadians were not going to lose our cultural Iden Tity just by doing a Little More Trade with the its deeper than cultural policy so in cultural there Are really three Many such As to the arts and the Csc can be and pose no some of such As the Border broadcasting tax think we would have to but i think we could re place those with alternative poli cies to the same effect that would not run into conflict with the rules of the we come to economic will the adjustment be so enormous that Well see rising unemployment and major at least in the adjustment period a caftan treaty would allow for the reduction of the Trade on a timetable that would stretch Over five to ten it be so there would be time for the adjustment to Canada has already adjusted to a major reduction in tariffs in the Kennedy round in the 1960s and Early when we Cut tariffs we found that whole industries didst what firms did was specialize in particular product lines and achieve world competitive a caftan would provide the Carrot to get us out of those to get us up Market and to provide jobs that do have a future on which secure growth and employment in the Canadian econ omy can be excerpted from a speech by Richard Lipsey introducing the Canadas Trade options in a turbulent published by the Howe Institute and co authored by Murray by Abraham Rotstein special to the free press once you have Sung when Irish eyes Are what do you do for an encore this is the governments present dilemma in regard to Trade policy with the United i have some sympathy for the governments initial Given the division of Powers be tween the american president and there is much to be gained from time to by hav ing a Friend at there is an important area of administrative discretion which the office of the Trade representative and the president himself May exercise on our if they Are Well Dis posed toward our this May be particularly important As Many observers Congress is in an ugly with an approaching elec the fear is that we May get sideswiped by protectionist legis much of our Export Sec Tor is in jeopardy and Many would like to take out insurance against such but what kind of insurance at the moment we Are not sure whether we Are sup posed to protect ourselves against a Squall or a when we aim to acquire Protection against american no Tariff we Are treading onto new we Are not sure what the insurance will Cost nor How reliable it but it is fair to As with All insurance to that the greater the cover age we take the greater the Premium we will have to my remarks Are geared to an initial assessment of both these the Price for the secure a Cess to the american Market on which we Are so is the silent american presence at the table of virtually every Domestic negotiation and decision that we shall make in the Field of Indus trial will any particular proposal we Are considering be construed by the americans As a subsidy who will be in a position to answer this question in most not even the american and since the body of precedents is still difficult Job would we be tempted in the end to Cut through the difficult ties and ask for some american tribunal to give us an Advance ruling on each particular Case the americans have a valid no National state can relinquish certain Basic prerogatives the right to valuation of incoming the setting of certain product and the right to Levy anti dumping this is particularly True under a free Trade agreement when the other partner con might find it very convenient to unload overstocked goods or those that might be going out of dumping might also be occasioned by other problems such As High this is the Basic flaw in such simple and seemingly attractive formulas As providing National treatment for each others the Only surefire Way to receive National treat ment is to be part of that same National All other situations Are necessarily qualified one Way or the in is How comprehensive an insurance policy can we buy under a free Trade treaty the at the to is that nobody knows for but there will certainly be distinct limitations that Are still in the process of being the most important to re is what the americans will eventually include under the category of a foreign this definition in be contracted or expanded depending on the extent of Domestic Ameri can pressures and a variety of other circumstantial How much the second question is How High is the Premium that we will have to pay for this Uncertain insurance the usual Rule of thumb applies you get what you pay if we Are prepared to dismantle our Industrial Assis Tance and incentive our agricultural marketing our subsidies to Grain and our efforts to catch up on research and most of our Active Crown Corpora the last vestiges of Fira that remain in the investment Canada particularly the restrictions that apply to the cultural and Many then we will provide fewer targets for american firms to shoot at when they go Hunting for subsidies that lie hidden within these Canadian a different set of restrictions must be anticipated in regard to control of our Exchange the americans would surely regard any decision to evaluate the Ca Nadian currency As an unfair Trade a policy of flex Ible Exchange rates seems to be the answer on the surface is allowing the Market to determine the appropriate Exchange but everybody from Gerald Bouey on Down knows that this is non sense and that we live in a world of dirty floats where governments have substantial control of the level and the rate of change of the Exchange perhaps we can now do an interim tally on what the Premium is Likely to amount to for the insurance policy that we Are Dis we cannot enumerate the Fine print of an insurance policy that has not yet been but we do know the items on the Agenda for discus Sion and we can be sure As mentioned that the More comprehensive the the higher the at stake then is Industrial Trade policy in regard to third countries where american subsidiaries May be Exchange rate and fiscal policy where it touches on tax Given the fact that we Are already locked into Ameri can monetary policy and interest it is not Clear what remains of the prerogatives of a self re spec Ting nation but even if we could imagine such a free Trade treaty in ask yourself what happens for this will be regarded As nothing Short of nirvana and everything that follows is bound to be simply Onward and up i am reluctant to disabuse these keepers of the dream of their innocent but there Are More such disturbing questions Down the what Hap for if America loses the technological race with Japan and several of her Indus tries begin to go the Way of the automobile where would you imagine would be a convenient place for the United states to Export her unemployment at to share the Burden of this costly Industrial attrition Stem the tide what policies would we fall Back on to Stem the tide of our own which shows no sign of budging from its base rate of 11 per cent How would we ease our transitions into other industries try and think of a set of policies to meet this problem which involve no no voluntary no product Ion quotas where they May touch american firms or their subsidiaries no manipulation of the Exchange rate and harmonized tax this is nothing less than a Clear formula for turn ing the Canadian Economy into a in the Light of such a possible i find the abstract discussion of whether Cana Dian sovereignty will or will not be compromised by a free Trade treaty quite beside the i As that this is what Lay behind the recent article in the economist that foresaw our Fate As the 51st state in the new country the above Are excerpts from a speech to the financial Post con Ference Access by Abra Ham professor of economics at the University of Petty politics hurts attempt to help immigrants the changing face of Winnipeg has sparked a vigorous minority nights activists believe that discrimination against visible minority groups is a powder Keg that cannot be others argue that society is adapting slowly but surely to a vast set of problems associated with absorbing new people into an established Tom Denton is the executive director of the International an Agency funded primarily by the government of Canada and mandated to Settle immigrants and Refu the Centre takes people straight from refugee Camps and tries to facilitate their entry into Canadian most of these peo ple do not speak often they have no Job skills and frequently they suffer the culture Shock of leaving a Refuge Camp or political prison on arriving in a on wednesday Jim Carr at City Hall Denton is committed to the goal of smoothing the Way for these Jimmu but the path has been a Rocky one these past few weeks As the International Centre finds itself in the midst of turmoil and Denton is critical of a Small group of activists who have chosen Militancy As an appropriate i dont equate advocacy with says extreme Mili Tancy on these issues can become counterproductive when it starts to close employers doors to our Cli the militants grandstand for personal aggrandisement and Ive yet to see any indication that their methods have led to any live Treyve become an extremely disruptive Force at the Denton is referring to a confrontation Over a Grant application made in the name of individuals who had not been consulted Secretary of state officials called the whole thing a tempest in a Teapot and consider the Issue but the incident has led to a Sharp dispute Over tactics within the multicultural bureaucracy and has resulted in a resignation from a Mem Ber of the centres says give the and the Media lets them get away with that they represent the Garde and that we represent the old guar that is arrant they Only represent immigrant com old and support the International Centre in its Denton says the militants Agenda does not include the people the Centre tries to help each the Public feud which has broken out Between these two competing views and strategies sometimes takes the form of a russian an employee is the Money which funds his salary comes from a government Grant which is toned by the employees who is chairperson of the committee in whose name the Grant was the wife wants to Send the Money a series of events leads to the employees who can keep track while All of this May sound a bit the problems which confront refugees and visible minorities Are vexatious and no laughing the focus of Public attention on internecine squabbles can Only subvert the pressing task at while giving pleasure to those who hang on to the old ways and resist the sort of changes necessary to accommodate the new reality of Canadian the Challenge facing governments and social service agencies is to begin tearing Down the barriers of discrimination through Public Edu cation and that can Only be accomplished Over time and with More than a Little new immigrant communities do not Inte grate the thousands of ukrainians and others who came to Winnipeg earlier in this Century suffered tremendous poverty and there were quotas in professional schools until the a educational opportunities were created and Immi Grant children were exposed to the Freedom of Canadian jews and ukrainians could exercise that free Dom As full partners in Canadian the obstacles Are even More Awe some for people of different who search for their place against a backdrop of suspicion and ii does not matter How enlightened we there will always be some people who will seek to hold others Back because of linguistic and racial it has happened for thousands of years and will continue to happen As Long As men and women fight to protect their land or language or religion or those of us who have lived in Canada All our lives can Tell stories about parents and grandparents who escaped oppression and sought a better life for ther it should not be a giant leap to appreciate these same emotions in immigrants who arrive in this country most would agree on these object we cannot afford to lose sight of them because of a struggle Over tactics or the destructive Tangent of personality our ability to overcome these temptations will Sig Nal our maturity As a ;