BLAIR FRASER November 9 1957


BLAIR FRASER November 9 1957




A DIPLOMATIC PROBLEM before the Queen’s visit to the United States was to decide who, among eleven Commonwealth ambassadors, should go with Her Majesty to the celebration in Jamestown, Va. A Washington wit suggested this formula:

“Send the representatives of Virginia’s two mother countries — Britain and Ghana.”

The new government’s first try at international gamesmanship, with the British at Mont Tremblant and Ottawa, looked rather like an adventure of Little Red Riding Hood—“Ooh, Grandmother Thorneycroft, what big teeth you have.” By contrast the first encounter with the American cabinet, at Washington the following week, was a performance of Beauty and the Beast. The fearsome Yankees, those despoilers of Canadian wealth and destroyers of Canadian wheat markets, turned into as gentle a set of gentlemen as the visitors had ever met.

The Canadian ministers arrived only two days after their final session with the British, still talking of all they had been through. Donald Fleming, the minister of finance, was particularly upset about the boisterous press conference at Mont T remblant, and indignant at reports that he had shown dismay while Chancellor Thorneycroft came off smiling. But whether or not Fleming was as flummoxed as reporters thought he looked, there was no doubt he had reason to be.

It was bad enough that Canadian manufacturers had been scared out of a year's growth by Thorneycroft’s offer of free trade with Britain, but they at

least could be reassured by silence and inaction. (Canadian delegates decided, after much thought, to omit from the final communique even the statement that they woidd “study” the British offer.) The worst thing was that the free-trade suggestion, and the blaze of publicity it got, made the Canadian counter-suggestions look even punier than they were.

One was that Canadian tourists returning from Britain may be allowed to bring more goods duty-free than the $100 worth the law allows them now. British officials politely agreed that this would encourage Canadian buying in Britain, but they doubted it would run to more than half a million dollars a year all told.

Another suggestion was the transfer of some government buying from U. S. to U. K. suppliers. Canadian officials at the Ottawa talks said the defense program would provide the main chances for this, but the men who do the buying for defense can’t see it. They say the big purchases of American gear have already been made, and that what we are buying now is mostly maintenance and replacement stuff, or else such things as receiving sets for American communications. The biggest possible shift here, they say, might run to millions but not to tens of millions.

As for civilian purchases, the trouble is that a lot of those have been open to British bidders for the last six years. Before that, Canadian bidders had an advantage of 10 percent on government contracts—that is, the lowest Canadian bid would get the job unless it was more than 10 percent higher than a bid from outside Canada. This 10-percent

margin still operates against American or other foreign bidders, over and above customs duties. But since 1951, to help Britain earn more dollars, Canada has given British companies the same chance as Canadian companies at many government contracts. They have got quite a few, too, but seldom without raising piteous screams from the Canadian firms that didn’t get the business.

One effect of the Thorneycroft freetrade offer was to draw attention to this fact. Canadians were reminded that if more British tenders were to be invited for government work, they might take away business from Canadian as well as American suppliers. Meanwhile other Canadians were led, by the sudden buzz of talk about Commonwealth trade, to think there was more in it than in fact there ever had been.

It was so vexing that the Toronto Globe and Mail, normally a clarion of Empire loyalism, quite lost its temper with the British chancellor. “This,” cried the Globe, “is the kind of diplomacy we expect from Moscow, not from London.” (Thorneycroft was still in Canada when this editorial appeared, and mentioned it at his press conference. He was startled to find himself classed with Khrushchev, but he seemed more amused than distressed.)

There is no reason to think the government approved the Globe and Mail’s language, but some ministers did share its hurt feelings.

Washington was a delightful change. The Americans, far from resenting any complaint by Canada, seemed positively to encourage it. They not only turned the other cheek, they even pointed out

how it could be slapped most effectively.

The main complaint was against the U. S. program for disposal of farm surpluses abroad, the so-called “giveaway program.” Both sides knew there was no hope of ending it. Public Law 480 has been passed by the U. S. Congress, and the U. S. government has no choice but to carry it out. What can be done is to prevent the resumption of its worst feature, a loose and particularly vicious form of barter deal which did grave harm to Canada’s wheat markets.

Actually, deals of this kind were stopped last June. Some U. S. officials concluded, after a survey in May, that they did American interests more harm than good. Others were impressed by the strong protests from Canada and other wheat-producing allies. The barter system was therefore revised to meet the most serious objections.

Since then, however, pressure has been mounting to go back to the old system, under which some American dealers were doing very well. Some U. S. farm organizations and some congressmen have been urging the U. S. government to withdraw its ban. The government had no wish to do so, but it welcomed a new reason for refusing. The conference with Canada provided such a reason.

The Canadians, on their side, were glad of a chance to reassure the Americans about their plans for Canadian trade policy.

Donald Fleming, when he met Canadian correspondents at the end of the two-day meeting, gave a somewhat evasive answer to the question, “Did you tell the U. S. ministers how Canada proposes to shift 15 percent of all imports from the U. S. to Britain?” He said only that they had explained their trade policy in general. But Douglas Dillon, the U. S. assistant secretary of state who briefed American reporters, was more explicit.

Americans were told that Prime Minister Diefenbaker’s reference to a 15percent switch was a mere offhand remark, and that Canada planned no drastic measures to promote such an aim. In particular there were no plans for an expanded Commonwealth preferential tariff system, and to this assurance, it was plain, the U. S. attached great importance.

But the best proof that the Americans thought the whole conference important was nothing it did or said, but the fact that it was held at all.

The Soviet Union had just won the race to launch a satellite, and thus proved the American technical lead to be an illusion. The Middle East and the Deep South were both in ferment. The U. S. government was drawing up a program to lay before Congress in a congressional election year. In spite of all these distractions, John Foster Dulles and three of his cabinet colleagues spent two whole days talking, and listening, to a group of Canadians.

According to Washington officials who ought to know, the Eisenhower government was really startled by the Canadian election, and by some of the statements made since, especially by the prime minister’s speech at Dartmouth University in September. It was startled to realize that even friendly, neighborly Canada had some problems and grievances that rankled, and it was really anxious to know what they are. If the conference did no more than clarify these things (and the indications are that it did)" it was a great success. ★