1954-05-12

Mr. Knowles:: 1.	Is the Department of National Health and Welfare aware of any public protests made by the American Dental Association" concerning dentifrice advertisements?
2.	If so, what study has the government given to such protests, or what action has the government taken on the basis thereof?


Mr. Marlin:: 1.	The American Dental Association has made no public protests concerning dentifrice advertisements. However, the whole question of acceptable and unacceptable dentifrices has been dealt with in the journal of the American Dental Association and in a yearly booklet entitled "Accepted Dental Remedies", both of which publications are directed to the dental profession and not to the general public. There has been some newspaper discussion in the United States on the material on this subject in the two publications but this could not be construed as a public protest by the American Dental Association.
2.	See answer to No. 1 above.


TELEVISION APPLICATIONS
Mr. Hansell:: 1.	How many applications for commercial television stations have been received up to January 1, 1954?
2.	What are the names and addresses of these applicants?
3.	How many applications were granted and to whom?


Mr. McCann:: 1.	Thirty.
2.	Niagara Television Ltd., Hamilton, Ont.; London Free Press Printing Co. Ltd., London, Ont.; CKSO Radio Ltd., Sudbury, Ont.; Western Ontario Broadcasting Co. Ltd., Windsor, Ont.; Television de Quebec Ltee, Quebec, Que.; New Brunswick Broadcasting Co. Ltd., Saint John, N.B.; Cape Breton Broadcasters Ltd., Sydney, N.S.; Lower St. Lawrence Radio Inc., Rimouski, Que.; Transcanada Communications Ltd., Regina, Sask.; Calgary Television Ltd., Calgary, Alta.; Edmonton Television Ltd., Edmonton, Alta.; Wm. Rea, Jr., Edmonton, Alta.; Sunwapta Broadcasting Co. Ltd., Edmonton, Alta.; Central Ontario
Television Ltd., Kitchener, Ont.; Saskatoon Star-Phoenix, Saskatoon, Sask.; Frontenac Broadcasting Co. Ltd. Kingston, Ont.; A. A. Murphy & Sons Ltd., Saskatoon, Sask.; Saskatoon Community Broadcasting Co. Ltd., Saskatoon, Sask.; Kawartha Broadcasting Co. Ltd., Peterborough, Ont.; The Island Broadcasting Co. Ltd., Charlottetown, P.E.I.; Grand Television Ltd., Kitchener, Ont.; Ralph H. Parker Ltd., Port Arthur, Ont.; La Tribune Ltee, Sherbrooke, Que.; Leopold Chevalier, Sherbrooke, Que.; Donald A. Clark, Port Arthur, Ont.; Herbert H. May, Peterborough, Ont.; Newfoundland Broadcasting Co. Ltd., St. John's, Nfld.; Mrs. Florence Buchanan, Brantford, Ont.; Ian G. Clarke Ltd., Kamloops, B.C.; Donald H. MacKay, Calgary, Alta.
3.	Sixteen: CKSO Radio Limited, Sudbury, Ont.; London Free Press Printing Co. Ltd., London, Ont.; New Brunswick Broadcasting Co. Ltd., Saint John, N.B.; Central Ontario Television Limited, Kitchener, Ont.; Sunwapta Broadcasting Co. Ltd., Edmonton, Alta.; Calgary Television Limited, Calgary, Alta.; A. A. Murphy &, Sons Limited, Saskatoon, Sask.; Transcanada Communications Ltd., Regina, Sask.; Ralph H. Parker Limited, Port Arthur, Ont.; Niagara Television Limited, Hamilton, Ont.; Western Ontario Broadcasting Co. Ltd., Windsor, Ont.; Frontenac Broadcasting Co. Ltd., Kingston, Ont.; La Tribune Limitee, Sherbrooke, Que.; Lower St. Lawrence Radio Inc., Rimouski, Que.; Television de Quebec Ltee, Quebec, Que.; Cape Breton Broadcasters Limited, Sydney, N.S.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Hodgson:: 1.	What is the full legal description of the whole of the property on the Montreal road on which the Central Mortgage and Housing Corporation head office and buildings are situated?
2.	From whom was this property purchased?
3.	What was the purchase price and date of purchase?
4.	Is there a swimming pool included in these buildings?
5.	Has the auditorium a spring dance floor?
6.	What has been spent on this property for (a)
surveys, subdivision plans, ect.:	(b) buildings,
giving details; (c) landscaping; (d) furnishings; (e) extras?

Orders for Returns
7.	What was the total cost?
8.	Has the government used this property for any other building projects, or does it contemplate doing so?
9.	If so, for what purpose?


Mr. Bourgei:: Return tabled.


LOCAL ELEVATOR PURCHASES AND STORAGE
Mr. Argue:: 1. What was the total amount of bushels of wheat, less dockage, purchased at local elevator points in the crop year 1952-53?
2.	Of such amount, what was the number of bushels in each respective grade from No. 1 hard to feed wheat, and how many bushels in each of said respective grades were at the time of purchase at said elevator points (a) tough; (b) damp?
3.	What was the total amount of bushels of wheat in store by grade and condition, tough or damp, from No. 1 Manitoba hard to feed wheat in store in all country and terminal elevators at the beginning of the crop year 1952-53, and in store in all country and terminal elevators at the close of the same crop year?


WHEAT SALES, 1952-53
Mr. Argue:: 1.	What was the total number of bushels of wheat sold in the crop year 1952-53, by the wheat board and by all elevator companies and licensed grain dealers, including sales from warehouses and terminal elevators?
2.	Of such amount, what was the total number of bushels in each respective grade, from No. 1 hard to feed wheat, and how many bushels in each of said grades were sold or disposed of as (a) tough; (b) damp?


DRIED WHEAT, 1951-52
Mr. Argue:: 1.	How many bushels of wheat in each grade from No. 1 northern to feed, both tough and damp, were artificially dried in the crop year 1951-52?
2.	What was the total gross weight of the above grain before drying?
3.	What were the total net bushels as shown by adjusted warehouse receipts after drying?



DOMINION STEEL AND COAL-FEDERAL PAYMENTS

Mr. Gillis:: What moneys were paid Dominion Steel and Coal Corporation in the years 1952 and 1953, as (a) a subsidy for the movement of steel; (b) a drawback for coal used in the manufacture of steel; (c) a bonus for the manufacture of coke; (d) a grant for plant expansion and/or any other purpose related to the steel industry?



POTATO IMPORTS, BRITISH COLUMBIA

Mr. Hahn:: 1.	How many tons of potatoes were imported into British Columbia each month, during the period March 31, 1953 to March 31, 1954?
2.	What was the total value of such importations?
3.	What was the total revenue collected on these potatoes?
4.	Were any potatoes allowed into British Columbia on a consignment basis?



REPRESENTATIONS TO UNITED STATES GOVERNMENT ON PROPOSED TARIFF CHANGES

[Stage Direction]
On the orders of the day:
Right Hon. L. S. St. Laurent (Prime
Minister): Mr. Speaker, on Friday last the Leader of the Opposition inquired about representations to the government of the United States with respect to possible United States restrictions on imports of lead, zinc and fish. As I understand the present situation, it is as follows:
The United States tariff commission has been conducting investigations into imports of groundfish fillets, and lead and zinc, in accordance with its customary procedures. The Canadian government of course has been concerned about the possibility of import restrictions arising out of these investigations by the United States tariff commission. When the inquiry into groundfish fillets was undertaken last summer, official representations were made in a note to the United States state department concerning the effects of any restrictions on the trade in groundfish fillets. Our general views on such restrictions on imports have been conveyed to the United' States government on several occasions. Recently at the meeting of our ministerial joint committee on trade and economic matters, they were fully discussed and the Canadian representatives drew specifically to the attention of the United States representatives our concern about zinc and lead.
On Friday last, the day the hon. gentleman asked his question, the tariff commission sent its reports on groundfish fillets to the President, but no announcement has yet been made on the nature of the commission's findings or on what action the President may take. And as to zinc and lead, the tariff commission's report has not yet been completed.
Hon. George A. Drew (Leader of the Opposition):: Mr. Speaker, I appreciate the information given and I would merely ask that when the Prime Minister is informed the house be given the information, because I understand that in addition to the ordinary concern there might be over limitations on the export of zinc and lead, any action in regard to groundfish fillets would have a very serious effect, particularly in Newfoundland. We will be hopeful that the representations that have been made will meet with appropriate response.


Mr.   SI Laureni@: I can assure the hon. gentleman that they have been made in very positive terms, and no doubt at all has been

left in the minds of those to whom they were made regarding our concern about these restrictions.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. M. J. Coldwell (Roseiown-Biggar):: Mr. Speaker, may I direct a question to the Minister of National Defence (Mr. Claxton). In view of the protest of India at her exclusion from further Far East war criminal proceedings, as reported in the New York Times yesterday, would the minister state the Canadian government's position on this matter?


Hon. Brooke Claxlon (Minister of National Defence):: Mr. Speaker, I think I should answer this question as Acting Secretary of State for External Affairs. The position of the Canadian government is that the power to grant clemency to and to parole persons sentenced by the international military tribunal for the Far East is determined by the terms of the Japanese peace treaty. Articles 11 and 25 of that treaty, when read together, confine the exercise of this power to the governments that have both signed and ratified the treaty of peace with Japan, that is, Australia, Canada, France, The Netherlands, New Zealand, Pakistan, the United Kingdom and the United States. If India had also signed and ratified the treaty of peace with Japan, India would have been eligible to participate in the exercise of clemency with respect to persons sentenced by the international military tribunal for the Far East.
This position was made known to the representative of the government of India in December last. Recently the Indian government informed the Canadian authorities that it found it necessary to reaffirm its objection to being excluded from participation. The position taken by the Canadian government remains unaltered, and I understand that a similar attitude has been taken by the other countries concerned.


HIGHWAY TRANSPORT
[Stage Direction]
On the orders of the day:
Mr. C. E. Johnston (Bow River):: Mr. Speaker, I should like to direct a question to the minister. Is it the intention of the government to introduce legislation this session respecting interprovincial truck transport, even though only five provinces, Ontario,
Inquiries of the Ministry New Brunswick, Prince Edward Island, Saskatchewan and Alberta, have agreed to the proposed formula?


Hon. Lionel Chevrier (Minister of Transport):: It has already been indicated in the house that, dependent upon the reaction of the provinces to the proposed draft bill which was submitted at the conference, the government would give consideration to the introduction of legislation at this session. My hon. friend has said that five provinces have indicated their approval, and until replies have been received from the four other provinces-


Some hon. Members:: Five other provinces.


Lionel Chevrier: I was correct-four other provinces-because there were nine only represented at the conference. It would be premature for me at this time to say whether legislation would be introduced, but I am hopeful that all the provinces will reply affirmatively.


Charles Edward Johnston: Is it necessary that all provinces must agree before the legislation is brought in?


Lionel Chevrier: It is necessary that the provinces give some reply, and it is at least courteous that no consideration should be given to the legislation until a reply has been received from the remaining provinces.



BRIDGES


[Stage Direction]
On the orders of the day:
Mr. T. H. Goode (Burnaby-Richmond):: Mr. Speaker, may I address a question to the Minister of Public Works? Now that the city council of Vancouver has agreed to sell Sea Island airport to the federal government, can the Minister of Public Works tell the house what assistance the federal government will give in building a new bridge at Marpole to serve the Sea Island airport?
Hon. Robert H. Winters (Minister of Public
Works): Mr. Speaker, this matter has been the subject of consideration by the government recently and it has been decided that, because of the nature of the airport, and the fact that it is located on Sea island, there is some reason for federal government financial participation in a bridge to replace the present inadequate Marpole bridge.
It has been estimated that a suitable bridge would cost about $1,200,000, and there was a suggestion previously that the federal government's involvement might be in the amount of one-third. The present decision
4646	HOUSE OF
Inquiries of the Ministry is then that the federal government will participate in the cost of a bridge from Vancouver to Sea island to replace the present Marpole bridge up to a maximum of $400,000.


Mr. Green:: You will have to do better than that.



BURLINGTON CHANNEL


[Stage Direction]
On the orders of the day:
Mr. F. E. Lennard (Wentworth):: Mr. Speaker, I should like to ask a question of the Minister of Public Works. Has the minister received a reply from the Ontario government to his letter to them of April 5 in respect of the proposed new bridge over the Burlington channel?


Hon. Robert H. Winters (Minister of Public Works):: The answer, Mr. Speaker, is no.



NATURAL GAS


[Stage Direction]
On the orders of the day:
Howard Charles Green: Mr. Speaker, may I ask the Minister of Trade and Commerce whether he can give the house any information concerning the application for a licence to import gas from the Peace river district into the northwestern states? I ask that because this morning's press dispatches report that the attorneys of the federal power commission have made an adverse report.


Right Hon. C. D. Howe (Minister of Trade and Commerce):: As I understand the situation, the hearings on the application of the Westcoast Transmission Company have been completed up to the time of rebuttal argument. The case of the company is in, and the staff of the commission have put in an adverse report based on the information that has been presented up to this time. It is my understanding that that is more or less usual procedure, the purpose being to point up the items that, in the opinion of the staff, have not been adequately covered. I believe the objections named were the location of the line in the Coquihalla pass that the staff thought might be dangerous to continuous operations. I think there was also some question raised about the deliverability of gas. There was no question about the gas being available in the fields, but question has been raised whether the applicant company could deliver the volume of gas in the time specified.
I understand that the applicant will deal with both of these subjects and with the other subjects that are questioned when pre-


senting his rebuttal, which I believe is timed for about June 1. I would say, from what I know of the situation, that the application is proceeding normally. There is no reason to become unduly depressed or unduly elated. The ultimate decision will depend upon the case that is presented in rebuttal.


Howard Charles Green: Has the minister any idea when a final decision may be expected?


Clarence Decatur Howe: I have reason to believe that after the rebuttal is filed a fairly prompt decision will be given. I would not like to put a time limit on it, but the presentation of the rebuttals would finish the case.


Mr. Regier:: May I ask a supplementary
question? In view of the government's giving permission to United States gas being imported into eastern Canada, has it given any consideration to helping the Westcoast Transmission Company in its efforts to obtain a favourable decision for the export of gas?


Clarence Decatur Howe: The two situations have no relation whatever. With regard to the Westcoast situation I may say that the government has endeavoured in every way possible to assist the Westcoast Transmission Company in prosecuting its case successfully. I know of no suggestion that has been made by the applicant to the government that has not been complied with by the government.


Mr. Nickle:: I should like to ask a supplementary question, Mr. Speaker. The minister did indicate of course that the government had done everything possible to encourage Westcoast Transmission. Can the minister indicate whether or not the government has ensured, or is now prepared to ensure, to the federal power commission of the United States security of both supply and price of Canadian gas to Westcoast Transmission for a sufficient period of years to amortize the heavy investment in transmission lines and distribution systems of gas supplied to the United States northwest? I ask that question, sir, because of fear of insecurity which has a great deal to do with the present-


Mr. Speaker:: Order.


Clarence Decatur Howe: Mr. Speaker, it seems to me that the news collecting agency of the very efficient periodical my hon. friend publishes has broken down, because the supply of gas has been assured for 22 years, that being the period of the licence granted by the province of Alberta. The federal government has nothing whatever to do with the price. It has no legislation which would enable it to interfere in that connection which is purely a provincial matter. However, I may say that in the report I have of the

document filed by the solicitor for the federal power commission none of the points mentioned by my hon. friend are raised.


Carl Olof Nickle: Mr. Speaker, I would like to ask a supplementary question. I disagree with the minister.


Some hon. Members:: Question.


Carl Olof Nickle: In connection with the Electricity and Fluids Exportation Act this government-


Some hon. Members:: Question.


Carl Olof Nickle: -retains authority by order in council to impose an export tax-


Some hon. Members:: Question.


Carl Olof Nickle: -on gas exported from Canada.


Mr. Speaker:: Order.


Carl Olof Nickle: Could the minister assure us that he has given the United States an assurance that the federal government will not impose an export tax during a sufficient period of time to ensure the amortization of the investment on the United States' side of the pipeline system?


Clarence Decatur Howe: Mr. Speaker, we have neither been asked to give nor have we given any such assurance. I suggest that my hon. friend is raising points with which the commission have not interested themselves up to date and I would hesitate to give any unsolicited commitments on these points.



ROYAL CANADIAN MOUNTED POLICE


[Stage Direction]
On the orders of the day:
Mr. A. W. Stuart (Charlotte):: Mr. Speaker, I should like to direct a question to the Minister of Justice, of which I have given him notice. In view of the criticism in connection with the arrest of Alfred Valdmanis, and in fairness to the R.C.M.P. involved, would the minister care to make some statement in this regard?


Hon. Stuart S. Garson (Minister of Justice):: Mr. Speaker, I wish to thank my hon. friend for having given me notice of his question.
T.C.A. flight 465 from Newfoundland, carrying Corporal Clark of the Royal Canadian Mounted Police, with a warrant to apprehend Dr. Alfred Valdmanis, was delayed by weather conditions and arrived at Fredericton airport at 10.15 p.m. of April 22. By the time Corporal Clark had been driven in an R.C.M.P. highway patrol car to Peters-ville and thence to St. Andrews, it was approximately two a.m. of April 23.
Inquiries of the Ministry
Corporal Clark was accompanied by another member of the force and on arrival at St. Andrews they were joined by Constable Winter of the St. Andrews town detachment. All of them were in plain clothes. Constable Winter introduced them to the local police magistrate who backed the Newfoundland warrant. Proceeding at once to the home of Dr. Valdmanis' brother at Chamcook, they effected the arrest of Dr. Valdmanis and left the house at 3.20 a.m.
Corporal Clark's instructions had been to return immediately to Newfoundland after effecting the arrest, but owing to weather conditions the party could not leave according to schedule and did not leave until the afternoon of April 24, arriving at St. John's, Newfoundland, on the same date.
In view of the fact that this was an important case and that Chamcook, New Brunswick, is close to the United States boundary, it was considered the course of prudence to effect the arrest of Dr. Valdmanis as soon as possible after the backing of the Newfoundland warrant by the New Brunswick police magistrate.
While I am aware, as minister in charge of the Royal Canadian Mounted Police, that the arrest in this case has caused some criticism, I am of the opinion, in view of the importance of the prosecution and the large amount of money involved in the charges, that the arrest was handled with efficiency and discretion.



TRADE AGREEMENTS


Clarence Decatur Howe: That it is expedient that the houses of parliament approve the ratification by Canada of the agreement on commerce between Canada and Japan, signed at Ottawa on March 31, 1954, and that this house do approve the same.
He said:	An agreement on commerce
between the Canadian and the Japanese governments was signed in Ottawa on March 31. An announcement was made in the house at the same time and the text was released for publication. The agreement will enter into force when it has been ratified by both governments. Because of the exceptional importance of this agreement, and because of the widespread interest in it, a resolution has been tabled to obtain the approval of the house in advance of ratification.
It has appeared for some time to be in our national interest to work out a mutually advantageous trade agreement with Japan.

Trade Agreement with Japan


Mr. Speaker:: Order. May I be permitted to interrupt the minister tor one second in order to ask hon. members tor their co-operation with respect to observing silence. It is very difficult to hear the minister, although normally he speaks loud enough, but if hon. members' conversation competes with his voice the loudspeaker system will be of no assistance at all, and I know many hon. members are interested in the question now before the house. I would ask hon. members if they wish to converse to do so in a very low voice or, which is better, use the lobbies which I think have been provided for that purpose.


Clarence Decatur Howe: Japan has already become our third largest customer. It seems probable that Japan will continue in the future to increase in importance as a market for our exports.
Japan is assuming the status of a major participant in world trade. A great deal of reconstruction and reorganization has taken place in the Japanese economy since the end of the war. Certain aspects of these developments bear great promise for the future of our own trade.
This new agreement provides, among other things, for the exchange of most-favourednation treatment. This is the normal and established treatment which we extend to other friendly countries with which we trade. Quite clearly, we could not continue for much longer to withhold most-favoured-nation treatment from a country such as Japan, which is one of our largest customers.
In recent years we have been imposing the high rates of our general tariff upon imports from Japan. In consequence, we have imported very little from there, even though we have been selling large and increasing amounts of our exports to that country. It has become more and more difficult in these circumstances to justify the fact that we were not extending most-favoured-nation treatment to Japan. In the new trade agreement we are now proposing to correct this anomaly.
Hon. members know that the government is constantly helping to increase and diversify Canada's export trade overseas. On behalf of Canadian producers we attempt at every opportunity to improve the terms upon which our goods are admitted into the markets of other countries. We try to keep our trade agreements up-to-date. In this connection, this new trade agreement with Japan is an important step in strengthening our whole system of trade relations. It should provide a stable and beneficial basis for trade to take place between Canada and Japan.

In negotiating this new agreement, we set out to obtain and consolidate advantages in the Japanese market, and at the same time to safeguard in a reasonable way the position of our own Canadian manufacturers in our home market. The negotiations were carried on in Ottawa, over a considerable period of time, with representatives of the Japanese government. At each stage, the various aspects were given careful consideration by my cabinet colleagues and myself. The negotiations were recently concluded in a friendly way and both sides regarded the results as satisfactory. Good trade relations and effective trade agreements are based on the willingness of countries to recognize each other's difficulties. They are based also on the desire to make well-balanced arrangements which will operate to the advantage of all concerned.
Let me give a short outline of the essential features of the agreement, and I will then go into some explanatory details. Briefly, there are three important ways in which this agreement will facilitate the access of Canadian goods to the Japanese market. In the first place, our exports will be guaranteed most-favoured-nation treatment in Japan, Secondly, we will be assured that there will be no discrimination whatsoever against Canada and in favour of any other hard currency country with respect to quantitative restrictions, exchange controls, or any other matters. Thirdly, with respect to a list of nine important Canadian export products, Japan undertakes not to discriminate against Canada in favour of any other country regardless of its currency position. This list of products includes wheat, barley, wood-pulp, flaxseed, primary copper, lead in pigs, zinc spelter, synthetic resins and milk powders. These are all very important concessions to have received. I shall return to these points a little later, to explain them more fully.
On our side, we undertake to make certain concessions to Japan. The agreement provides that Canada will extend most-favourednation treatment to Japanese goods. This means that imports from Japan will be entered under our most-favoured-nation rates of duty, which are generally applicable to the non-commonwealth countries with which we trade. This will involve reductions in the duties on imports from Japan, which have hitherto been subject to the much higher rates set forth in our general tariff. It is, of course, to be predicted that imports from Japan will increase under these new arrangements.
4S49

In 1953, Japan purchased almost $119 million worth of Canadian goods. This total was exceeded only by our sales to the United States and to the United Kingdom. In the same year, Canada bought less than $14 million worth of goods from Japan. For every dollar Canadians spent on Japanese goods, in other words, the Japanese bought more than $8 worth in Canada. We could not reasonably expect to continue to enjoy such high sales to Japan if at the same time Japanese goods were to continue to be restricted from entry into Canada by the high rates of our general tariff. Japan legitimately expects to sell more in this country. For my part, I do not believe we need to be afraid of such increases. Under these new arrangements, Japan will be in a position to compete for a share of the Canadian market on an equal basis with other foreign suppliers, such as the United States and Germany. Importers may well find it advantageous to obtain some of their requirements from Japan in competition with their former sources of supply.
Canadian imports from Japan have increased in value as compared with pre-war years, but they are still relatively small. Last year, they included a range of items such as iron and steel, toys, oranges, pottery and chinaware, silk and other fabrics, tuna fish and a variety of manufactured products. Only in two items did our imports from Japan amount to as much as $1 million. Aside from these items, the value of individual import items from Japan was in each case considerably below a half million dollars.
When it is remembered that total imports into the Canadian market in 1953 amounted to $4-3 billion, it is clear that there is considerable scope for Japan, from its present level of $14 million, to obtain an increased share of our large import market. Out of every $100 worth of goods imported into Canada last year, about 30 cents' worth came from Japan. There is obviously room for a considerable increase in imports, which would contribute to a healthier balance of trade and at the same time be of such dimensions as to be readily absorbed.
In case injurious competition should materialize for particular Canadian industries out of such imports, careful safeguards have been provided in the agreement. We have been mindful of the fact that a sudden influx of low-priced imports might seriously affect some particular Canadian industry. In the agreement Canada therefore reserves the right to apply special duties on Japanese goods in legitimate cases of emergency where, as a result of increased imports, there is a serious threat of injury to domestic producers.
Trade Agreement with Japan
I hope, however, that Canadian trade with Japan will develop in such a way as not to create serious problems for Canadian industry. Japan, like ourselves, is vitally dependent on foreign trade. The Japanese government is no doubt fully aware of the fact that no lasting trade relations can be built up except on the basis of mutual good will and of adherence to fair trade practices. It is reasonable to expect that Japanese exporters will try to avoid creating problems which would undermine good relations. Japan has in recent years instituted a comprehensive system of control and inspection for its exports, in a positive effort to prevent dumping of goods, misrepresentation of trade marks and patents and other undesirable methods, and to abide by internationally accepted fair trade practices.
I shall go on now to explain in a little more detail some of the concessions we have received. It is important that we are now to be assured by Japan of most-favoured-nation treatment as regards tariffs and all related matters. Since the Japanese maintain at present a single-column tariff, this agreement does not have the immediate effect of lowering their rates of duty on Canadian goods. However, the Japanese tariff does provide for heavy surcharges on goods from countries which discriminate against Japan. It is also possible, of course, that Japan may in the future decide to revise its present tariffs. With respect to all such eventualities, this agreement assures Canadian exports of the lowest rates of duty and of the most favourable tariff treatment that may be accorded by Japan to any country.
We have recognized in this agreement that, in view of their continuing balance of payments problems, the Japanese may from time to time find it necessary to enforce certain import and exchange restrictions on a temporary basis. However, the agreement provides that Canadian exports to Japan shall receive treatment no less favourable than is accorded to our competitors in other dollar countries. There can be no discrimination of any kind against Canadian goods as compared with goods from other countries, such as the United States, whose currencies are convertible. This is an important guarantee which applies over the whole field of our exports to Japan.
In addition, the very significant concession is made by Japan of guaranteeing against all discriminatory restrictions whatsoever the list of nine important Canadian products, including wheat, which I have already enumerated and which make up a very high proportion of our trade with Japan. For these goods, Japan has undertaken to grant licences and
4650	HOUSE OF
Trade Agreement with Japan exchange without regard to currency considerations. We are thus assured of our freedom to compete, on a normal commercial basis, with all other suppliers, wherever they may be and whatever currency they may use. There are certain agreed exceptions to this rule but they affect only a limited number of the nine commodities listed, and they apply only to specific quantities and for specific periods. These special exceptions have been provided to permit the Japanese government to fulfil undertakings it has entered into in trade agreements with certain other countries.
Last year Japan was our second largest market for wheat and it is also one of the leading markets for Canadian barley. The growth of Japanese imports of wheat and barley has been a remarkable development of recent years and constitutes in effect the creation of a new and continuing market for these basic Canadian exports. Our exports of wheat to Japan have increased from less than $1 million in 1949 to $52 million last year, representing almost 10 per cent of our total wheat exports. We sold about 800,000 tons of wheat to Japan in the last crop year and we expect to equal this performance in the current year. Similarly, while we sold no barley to Japan until three or four years ago, Japan last year purchased over $17 million of Canadian barley, representing almost 13 per cent of our total barley exports in 1953. Japan has become for the first time a major grain importing country.
This very significant increase in grain exports to Japan is not the result of temporary factors. On the contrary, the dietary changes that are taking place in Japan, the improved standard of living, and the development of an efficient milling industry in that country, all point to even higher levels of grain consumption in future years. Representatives of my department and of the Canadian wheat board, who visited Japan last January to discuss the grain trade, were very favourably impressed with the potentialities of the Japanese market. They were told that consumption of wheat flour in Japan in 1953 was 50 per cent higher than in 1952, and that the production of processed barley for human consumption in Japan in 1953 was 30 per cent greater than in the previous year. It is my belief that this increasing trend of Japanese requirements will continue. I am happy that Canada is in a position to supply a large proportion of these needs.
Japan is also one of Canada's major markets for woodpulp, for flaxseed, iron ore, copper and other important products. For example, Japan was our third largest market for dissolving pulp last year, taking 10 per cent of our total exports, and substantial


amounts of other grades of pulp were also shipped. Our exports of flaxseed to Japan in 1953 represented about 10 per cent of our total flaxseed exports. Non-ferrous metals were our leading exports to Japan before the war and Japan continues as a potentially important market for these products. Canada's expanding synthetic resin industry is also finding a valuable export market in Japan.
In fact, Japan, with her 85 million population and with her highly developed industries, is one of the world's largest markets for foodstuffs and raw materials, and for other products which we can supply. The maintenance of high levels of exports of these products is of fundamental importance to the whole Canadian economy. It is of direct benefit to our agriculture, our forest and our mining industries. By contributing to a buoyant economy and a prosperous domestic market in Canada, it is of vital importance to our own manufacturing industries which sell their products in the Canadian market. We have no monopoly on the supply of such products, of course, and other countries are also anxious to expand their share of the Japanese market.
Ratification of our agreement should open a new era of fruitful trade relations between Canada and Japan. Our two economies are to a large degree complementary and have much to gain from close and constructive co-operation. We are happy to play our part in helping Japan to take her place as a partner in the world trading community.
It will be recalled that at the last session of the contracting parties to the general agreement on tariffs and trade in Geneva, Canada voted in favour of inviting Japan to participate in the work of the contracting parties. This did not, of course, mean full membership for Japan; nor did it mean that Canada and Japan undertook the rights and obligations of the agreement with respect to each other. We also indicated at that time, however, that we were negotiating a trade agreement with Japan and that, once a satisfactory agreement had been concluded, and subject to the terms of that agreement, the Canadian government would be prepared to consider bringing the GATT into effect as between Canada and Japan.
Subject to the terms of this new agreement, we intend to apply the GATT to our trade relations with Japan, thus joining with the other GATT countries which have decided to bring their trade relations with Japan within that framework. It should be noted that our agreement with Japan already

contains many of the essential features provided for in the GATT, with respect to mostfavoured-nation treatment in tariffs and other matters. This new agreement is in fact somewhat stronger and more specific than the present provisions of the GATT with respect to the non-discriminatory application of exchange and import controls. Similarly, the Canadian government's right to adopt safeguarding measures against unfair or injurious competition is established in a more precise and explicit manner in the agreement with Japan than it is under the corresponding provisions of the GATT. At the same time, we regard the agreement with Japan as being consistent in all respects with the principles of the GATT.
Hon. members will recall that when I announced in the house the signing of the agreement on March 31, I pointed out that its importance goes beyond commercial considerations. This agreement should contribute to stable and friendly relations between the two countries and to the peace, security and progress of the Pacific area. 1 am confident that this agreement will prove to be in the long-run interests of both Canada and Japan. I would remind the house that other important trading countries are taking steps to consolidate their trade relations with Japan. The United Kingdom government has recently renewed and to some extent liberalized its payments agreement with Japan. The United States, which already has a most-favourednation agreement, has indicated that it contemplates tariff negotiations with Japan and it is seeking special authority for such negotiations.
We have tried to obtain a carefully formulated and well balanced agreement which should go a long way in itself to reassure those of our producers who are afraid of being seriously hurt. When we think of the present importance and the potential growth of the Japanese market for many of our export products, there can be no doubt of where our interest lies. This agreement will help over the years to provide employment and income in agriculture, in our forest and mining industries and in other industries across the country. For these reasons I hope the resolution will receive cordial and widespread support.


Mr. Donald M. Fleming (Eglinfon):: Mr. Speaker, I am sure that no member of the house entertains any doubt about the importance of the measure now before us. Trade is a factor of high importance in the outlook of this country both with respect to peace and our economic future and, indeed, the whole development of this country with
Trade Agreement with Japan which Providence has blessed us. Our trade and economic relations with Japan must, in the light of existing conditions in the world and in the light of our trade and economic relations with that country in the past, claim a place of high importance in the consideration of hon. members of this house.
In the resolution submitted to the house, Mr. Speaker, the house is invited to express its approval of the ratification of the trade agreement signed by Canada and Japan on March 31, 1954. May I point out, sir, that the procedure does have the effect of restricting consideration of this measure. This is a debate on a resolution. Only one stage of discussion is afforded. I should think with any measure of such great importance it would have been desirable, were it possible, for the measure to receive careful consideration in a committee of the house where it would be possible for hon. members to ask those many questions which naturally arise in their minds in relation to a trade treaty of such high importance. It would also permit those who have views to express to do so.
I recall, sir, that in the session of 1948, when the general agreement on tariffs and trade which had been signed at Geneva in the fall of 1947 was brought to the house for ratification, the government did follow a suggestion that I think came from Mr. Bracken, the then leader of the opposition, that the treaty, after an initial debate, should be referred to the standing committee on banking and commerce for further consideration. In that committee the matter was given more detailed consideration and was the subject of a more informal discussion than is ever possible in a debate in this house. Indeed, sir, the procedure that we are following today is such that it is not possible to ask the government any of the questions which I am sure crowd into the minds of hon. members in relation to so important a matter.
This subject, sir, can only be fairly considered against a background which must embrace our consideration of our economic and political relations with Japan in the past. The history of our pre-war trade relations with Japan is, frankly, not altogether happy. The mention of trade with Japan to those who recall the conditions attendant upon our trade with Japan in pre-war years is to invite the recollection of the days when Japanese goods, particularly textiles and toys, flooded the Canadian market and undersold Canadian products by reason of the very low standard of living of the Japanese people and the Japanese workman in particular, in comparison with our own.

Trade Agreement with Japan
Then, of course, came the war. To think of the war, of course, is to invite the recollection of deep wounds. Yet, Mr. Speaker, I think we would not be true to the trust imposed in us as legislators of Canada, nor would we be true to the responsibility that rests upon Canada as a great democratic nation in the world today, if we did not believe that those deep wounds inflicted from 1941 to 1945 are capable of being healed, and that it may be possible to restore to our relations with Japan that healthy mutual regard that did once exist.
We recall, sir, that Canada and Japan entered into a treaty of peace two years ago. We recall that it was generous in its terms. We recall that it followed a treaty of peace between the United States and Japan which was signal in the generosity of the terms extended by the victor to the defeated1 nation. This house on June 16, 1952, gave unanimous approval to this treaty of peace and the ensuing legislative measures. Why did we do this, Mr. Speaker? Why did we seek to be generous in the terms of the treaty of peace we approved with Japan at that time? I am certain that one factor that was high in the consideration of hon. members of this house was our hope that Japan would come to hold a position of respect and mutual regard amongst the democratic nations of the world. We wanted to leave no stone in the path of Japan taking that kind of position amongst the civilized nations of the world. The behaviour of the Japanese government and nation since the war has been such as to encourage the hopes we expressed at that time.
The Japanese government has sought to follow a path of co-operation with the western nations. The Japanese government did not, as her own economic interest might have dictated, recognize the communist, so-called people's government of China. It chose rather on June 18, 1952, to recognize the existing nationalist government of China. She applied to become a member of the United Nations, and would have become a member had not the Russian delegate on September 18, 1952, exercised the 52nd Russian veto to defeat Japan's application for membership in the United Nations. Last December Japan became a party to the statutes of the international court of justice. Only Russia abstained in the voting in the security council and the assembly.
The hope of the western world in a substantial degree in that quarter of the globe can fairly be said to be put upon the basis that Japan is, and shall continue to be, the major outpost against communism. It is proper, sir, that we should have regard to the


political and economic conditions existing in Japan today. I affirm that these are matters of concern to us. We cannot take a narrow approach to questions of this kind. If conditions in Japan, either in the political or economic field, were to suffer drastic deterioration, who can say how long it would be before communism would rear its ugly head and challenge the government? In so far as political conditions are concerned, it may be unwise to say more than that at the moment the government in Japan is not in a too strong position. But we may properly examine, and in greater detail it seems to me, the economic conditions subsisting today in Japan. The economic conditions today are not too sound.
Japan is a nation confined within narrow geographical boundaries. She is poor in the possession of natural resources. Her economy is such that she must depend upon export trade for her economic health. Only 16 per cent of the soil of Japan is arable. Next to The Netherlands and Belgium, Japan has the densest population in all the world in relation to her arable land. The population in Japan is 3,600 per square mile, and the total population today is about 86 million. It is increasing at the net rate of 1,200,000 per year. It is estimated that by 1960 the population of Japan will have increased to 95 million people. In very truth, sir, Japan is bulging at the seams. As a result of the war she no longer has those colonies with which she had built up a very substantial trade before the war. Japanese immigrants are not being received in numbers in other parts of the world. The United States is now receiving about 150 per annum, and the number that Canada receives is, of course, slightly smaller.
Before the war 42 per cent of Japan's exports went to China, Formosa and Korea. She has been stripped of her colonies and her loss in that regard is serious when we look at the trade she enjoyed with Formosa and Korea as well as Manchuria. As a result of the war she lost her colonies, which constituted 46 per cent of her pre-war territory.
There are other disturbing features in the economy of Japan today. As a result of the stress of war and post-war conditions, inflation has been rampant in Japan. Taking 1937 as a base of 100, her wholesale prices by the middle of 1952 had jumped, according to official Japanese statistics, to 27,300. The cost of living in Japan has soared to very great heights and taxes are very high. Interest rates are abnormally high. Indeed, the Japanese economy has been maintained in effect by United States assistance-United States assistance in the form of direct aid and

in the procurement policies followed in relation to the occupation of Japan by American troops, and in the hostilities in Korea.
By late 1953 Japanese exports were only 31 per cent of what they were in pre-war days. Her imports then were just 54 per cent of what they were in pre-war days. The ratio of her total trade volume to national income is 22 per cent today as against a pre-war percentage of 37 per cent. The average annual income per capita in Japan is $150. It is the highest in Asia but it is very low compared with the Canadian income of roughly $1,000 per capita.
United States aid to Japan has been indeed substantial. From the end of the war up to September 30, 1953, net grants for economic aid from the United States to Japan were $2,439 million. Those figures are for direct aid alone. Even with the substantial procurement policy followed by the United States in Japan that country in 1952 suffered a visible trade deficit of $570 million. Allowance, of course, must be made for certain invisible figures in the trade accounts, but Japan's trade position today is unbalanced. She has had to resort to import restrictions and other protective devices.
Japan's exchange position must be as well a matter of concern. She has suffered from a lack of foreign exchange-sterling in particular. This is in part the result of import restrictions which existed until recently in the colonies of the British Empire. On September 20,	1953, Japan's holdings of
foreign exchange had been reduced to the equivalent of $1,008 million United States dollars, of which $872 million were in the form of United States dollars.
Japan has been seeking to expand her exports. In 1953 she partially lifted the ban on exports to Red China and placed a number of carefully selected items on a so-called free list. The trade volume under those special arrangements is expected to reach a volume of only $15 million on a strict barter basis.
These, it seems to me, are all important considerations in approaching a trade treaty between our country and Japan. Before the war Japan had a very great market in Asia. Her pre-war market in Asia accounted for 64 per cent of her total exports. That figure dropped in 1951 to 51 per cent. This has had a very restrictive effect upon the Japanese economy. We must take account of that factor because it is the political factors in which we have direct and lively concern which are responsible in substantial measure for the curtailment of the markets formerly enjoyed by Japan in Asia.
Then, sir, what of our own trade relations with Japan? I do not wish to weary the
Trade Agreement with Japan house with statistics, but it seems to me that an intensive study of the trade figures pertaining to our trade with Japan in recent years is extremely illuminating. On the import side the average figure for Canadian imports from Japan from 1935 to 1939 was $4,649,000. In 1939, the last pre-war year, the figure had risen to only $4,864,000. By 1948, when conditions were becoming more settled in the East, our imports from Japan were just $3,144,000. They increased in 1949 to $5,551,000. In 1950 they were $12,086,627; in 1951 $12,577,000; in 1952 $13,162,000; and in 1953, $13,629,000.
There has been, it will be seen, a substantial increase in these post-war years over any figures that had existed up to that time. The figures have been relatively stable during the past four years.
What now of our exports to Japan? The pre-war average, from 1935 to 1939, of our exports to Japan was $21,880,000. 1 give only the round figures. In 1939, the last pre-war year, we exported to Japan $28,168,000 worth of goods. In 1948 when, as I mentioned, conditions became more settled, we exported to Japan $8 million worth of goods. In 1949 that figure dropped to $5,860,000. In 1950 we advanced the figure to $20,533,000. In 1951 there was a huge increase to $73 million, and the increase has continued since. In 1952 the figure was $102 million and in 1953 an all-time high was recorded of $118,500,000.
Sir, the nature of our commodity trade with Japan, as the minister has indicated, is a matter of high importance in our consideration of this subject today. Wheat has been our leading commodity export to Japan. Last year we exported some $52 million worth of wheat to Japan. Our barley exports have been a feature of our trade with Japan during the last several years. In 1952 we exported $39 million worth of barley. In 1953 that dropped to $17,500,000. Our export of wood pulp sulphite and wood pulp sulphate, which go into the making of Japanese rayon, advanced from $6 million in 1952 to something over $8 million in 1953. Our exports of copper, ore, and scrap advanced in 1953 to $4,300,000. Our scrap iron or steel advanced in 1953 to $3,862,000, and flaxseed from a mere $27,000 in 1952 to $1,380,000 in round figures in 1953.
It will be seen, sir, that our trade with Japan, both import and export, has now reached all-time records. The second striking feature of these figures is the extraordinary imbalance of our trade with Japan. Now, even making allowance for the invisible figures that should enter into our consideration of any of the figures on visible exports and imports, the fact is that for some time we

Trade Agreement with Japan have been selling to Japan eight times as much as we have been buying from her.
Among the best customers of Canada Japan in 1950 stood ninth, in 1952 fourth, and in 1953 third. This has been at a time when on the continent of Asia there has been an increasing tendency towards independence or self-sufficiency in trade matters on the part of countries there, and Japan, which is more dependent upon export trade than any other nation in Asia, has naturally felt the adverse effects of that policy on the continent of Asia.
We must now look, sir, at conditions in our own country which may be affected by the terms of this treaty. Sir, textiles and steel products, electrical goods and pottery are likely to play a leading part in the export hopes and plans of the Japanese people under the terms of this treaty.
It is an unhappy, an inescapable fact, I suppose, that in the last nearly decade and a half this is perhaps the most unfavourable time for the Canadian textile industry and the other industries I have just mentioned to face the rigour of Japanese competition in the Canadian market. It is an inescapable fact that not one more textile import today is needed to hurt the Canadian industry. Canadian industry has suffered a good deal of economic deterioration in recent months. Let us then examine the treaty in the light of this background.
I do not wish to review the ground which the minister has covered in his speech this afternoon. The purpose of the treaty, as has been stated, is to offer unconditional mostfavoured-nation treatment in all matters on a mutual basis between the two countries. There are exceptions. One exception of course is made in article I, paragraph 5, which stipulates that the agreement is not to affect the advantages accorded by Canada to members of the British commonwealth of nations. Then we have in article III, paragraph 3, some provisions that may come to play a very important part in the effect of this Japanese trade treaty; that is, the provision in relation to balance of payments.
In considering the weaknesses of many of the nations of the world today in relation to their exchange position we should have due consideration for the effect of this article. It provides, sir, that:
Both contracting parties recognize that the existence of balance of payments difficulties in many countries, and the widespread inconvertibility of currencies, do not permit the immediate and full achievement of non-discriminatory application of trade and exchange restrictions affecting imports.

And for that reason provision is made in this article that either contracting party may:
... in the application of trade or exchange restrictions affecting imports for the purpose of safeguarding its external financial position and balance of payments, temporarily deviate from the provisions of paragraphs 1 and 2 of this article-
-on two conditions which are in the form of a proviso:
Provided that:
(a)	its restrictions shall be applied in such a way as to avoid unnecessary damage to the commercial or economic interests of the other contracting party;
(b)	its restrictions shall not be applied in such a way as to result directly or indirectly in discrimination as between countries which are treated as part of the United States dollar area under its exchange control regulations, or as between countries whose currencies are or become convertible in the hands of persons who are treated as nonresidents under the exchange control regulations of the countries concerned.
The next article of direct concern to us in this debate, sir, is article V, in relation to the maintenance of fair trade practices. It provides:
Each contracting party undertakes to conform in its trade and commerce to internationally accepted fair practices, particularly in matters relating to trade marks, marks of origin and rights under patents, and to co-operate with the other contracting party with a view to preventing any practices which might prejudicially affect the commerce between the two countries.
Article VII defines the duration of the agreement. It is to continue in effect for a period of one year from its entry into force, and thereafter until three months from the date on which either of the parties shall have given notice to the other of the intention to terminate the agreement.
The correspondence which has been exchanged between the contracting parties on March 31, 1954, has also been made a part of the treaty by protocol. One of the letters written by the Canadian Secretary of State for External Affairs (Mr. Pearson) contains a provision which I suppose, in the view of many of us in this house, will be regarded as of crucial importance, for under its provisions Canada "reserves the right to establish values for ordinary and special purposes in the following terms." I do not propose to read these terms, sir, with the exception of one paragraph, and I do read it in extenso because of its importance:
If, 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.
Canada's right to proceed in that manner is recognized by the next following letter from the ambassador of Japan. Then in the following letter the government of Japan undertakes to accord unconditional non-discriminatory treatment with respect to the importation into Japan of nine designated commodities, namely, wheat, barley, wood-pulp, flaxseed, primary copper, lead in pigs, zinc spelter, synthetic resins and milk powder.
Sir, the safeguards to which Canadian industries will look are undoubtedly those in relation, first of all, to the duration of the agreement; second, those in relation to the maintenance of fair trade practices; third, the provision that I have read in regard to the imposition of special duties in certain cases. Most-favoured-nation status is to all intents and purposes the same status as any nation derives under GATT. There is one further feature as well, that the legislation passed in this house in December last in amending the Customs Act will have application to imports from Japan as well as the provision which I have read in relation to the establishment of special duties.
I make just this comment on the importance and value of those safeguards, sir. First of all, in regard to duration, if it should happen that for any reason the treaty proves to be a disappointment and this house desires that steps be taken either to terminate the agreement or to seek changes in it, it will not be a very easy matter to terminate it. Hon. members may say, "Well, all you need to do is to give notice." But the fact of the matter is that in the relations of one country with another the sudden termination of trade treaties oftentimes provokes unhappy differences, and it is not the sort of thing any country in times like these desires to do to a country with which it is seeking to foster friendly and close relations.
As to the value of the provision in relation to the establishment of special values for commodity purposes, I would draw your attention, sir, to what may be considered a somewhat narrowing provision. It is to be observed that this clause can be invoked only as the result of unforeseen developments and the effect of obligations incurred by Canada under the agreement on products being imported into Canada in such increased amounts and under such conditions as to cause or threaten serious injury to Canadian domestic producers.
Let me stress that this clause can be invoked only where the unhappy results contemplated by this provision arise as the result
Trade Agreement with Japan of "unforeseen developments". Now, I do not know that any hon. members of this house can say that a very substantial increase in Japanese imports into Canada, and not least in those commodities where there is substantial unemployment today in Canada, will be unforeseen. I think it is obvious, Mr. Speaker, that there is going to be a substantial increase in Canadian importation of Japanese products, and therefore I put it before the house that under this provision, which has been stressed by the minister both in the statement he made today and the statement he made in this house on March 31, and has been stressed in the thinking of many people and the writings of some in relation to this Japanese treaty, the right can be invoked by Canada only where the unhappy conditions contemplated of a threat of injury to the Canadian domestic producer is unforeseen today.
Now, sir, I pass on to examine this treaty in terms of the ledger balance. It does undoubtedly offer benefits and against those benefits we must weigh whatever cost there may be to Canada.
In the face of the condition of imbalance in trade with Japan, to which I have made reference, it is quite clear that even if we were to achieve by this treaty no more than an assurance of a continuation of the kind of market we have been enjoying in Japan, it would have important value for Canada. Canada is to achieve most-favoured-nation status in the Japanese market. But the minister has not said, as I followed his statement today, that Canada is likely to increase her exports to Japan in any substantial measure. He did lay stress today on the maintenance, through the instrumentality of this treaty, of the position that Canada enjoys in the Japanese market today. Therefore, Mr. Speaker, while we would like to see this treaty made the means of increasing our sales to Japan of Canadian goods, I think it well to remind ourselves that that hope has not been expressly held out today by the minister. Of course, it will remain with Canadian businessmen and the Canadian wheat board to take advantage of the position that is ensured to Canada under this treaty for its duration.
We would like to see Japan substantially increase her purchases of Canadian wheat. Her record purchases of wheat amounting to $52 million last year, and $17 million worth of Canadian barley, may give us hope that we will be able to enlarge the sale of these important commodities to Japan. With the surplus of wheat which exists in Canada today we hope that the dietary trend in Japan, which has been moving people more and more from the position of rice eaters to the position of wheat consumers, will continue. We wish naturally to be in the

Trade Agreement with Japan forefront of the sale of wheat in the Japanese market. I leave this matter of the benefits to Canada, Mr. Speaker, simply with this note of warning, that the minister has not indicated or has not held out any glowing hope of an increase in Canadian sales to Japan.
On the import side there are many commodities undoubtedly which will be available to the Canadian consumer at lower prices, but I ask the house to consider this also in relation to the other side of the ledger balance of this treaty. The effect of extending most-favoured-nation treatment to Japan under this treaty will be to reduce the present tariff rates on the products concerned. Gloves will be reduced from 45 per cent under the general tariff to 25 per cent under most-favoured-nation treatment; toys, 40 per cent today, will be 25 per cent under the treaty; pure silk clothing, 45 per cent today plus seven cents per ounce, will be 30 per cent under the treaty; pottery and china-ware, 35 per cent today under the general tariff, will be 20 or 25 per cent under the treaty, depending on the particular commodity.
Now, sir, what of the other side of the ledger balance? Perhaps we can consider this best in relation to the Japanese hopes of the benefits which will accrue to them under the treaty. There have been statements from high sources in Japan indicating that the Japanese hope to double their exports to Canada. If they double their exports to Canada it will mean increasing their exports to us to something like $25 million a year. The opinion that one may form in relation to this subject, Mr. Speaker, is that the Japanese hopes must be set much higher than that. The hopes of Japan with respect to increased exports into the Canadian market are centred largely in the field of textiles, steel products, and, of course, the extension of those sales to Canada with which she has been successful in the past, toys, cameras, tuna fish, oranges, pottery and ceramic products, and she hopes to extend her sales of shirts and gloves to Canada.
What has been the reaction in Canada to this treaty? It is only natural, sir, that the Canadian textile industry should demonstrate very serious concern about the treaty. Statements came from the Canadian textile industry when the treaty was announced objecting to it and contending it was unjust. The statement issued by the Primary Textiles Institute reads as follows:
It is unjust that the textile industry is apparently to bear the main brunt of increased Canadian imports from Japan, now that a trade treaty is being signed. This comes at a time when imported textiles already hold a commanding share of the Canadian market.


Japan has already become the world's largest textile exporter. Low wages, skilled workers and a completely rebuilt modern industry has restored them to that position within a few post-war years. Japan has captured this position by selling great volumes at low prices and will not be content with any small sales in Canada now that tariffs on many of their textiles are to be sharply reduced.
This statement proceeds to draw attention to the fact that "Japanese textiles packaged in clear imitation of well known Canadian brands are a recent example" of what are described as unfair practices.
Another is a "dual price system" whereby Japan sells products abroad for less than the price at home, described by the Manchester Guardian as a "flagrantly unfair system".
That is the end of my quotation from the statement from the Primary Textiles Institute of March 31.
I was interested in what that statement had to say about the existence of a two-price system in Japan. On looking into the matter further I found this statement in a recent review of economic conditions in Japan published in the Oriental Economist of February, 1954. This is a Tokyo publication in the English language. In it I find this paragraph:
Yet, from around the autumn 1952, certain items began to be quoted at lower levels for export than in the domestic market; and since early 1953, the gap between domestic and export prices has tended to widen appreciably. This dual price problem is particularly bad with cotton piece goods, rayon, galvanized sheet, ammonium sulphate, non-ferrous metals, vessels, and certain other items.
Mr. Speaker, as I understand the provisions of the treaty in relation to fair trade practices it will be the duty of the government to see that this dual price system is not used by Japanese exporters for the purpose of selling goods in Canada at a lower price than that which exists in Japan. If that is not the effect of the provisions of the treaty, then I think the minister owes it to the house to make a clear statement on this subject of the two prices.


Clarence Decatur Howe: Mr. Speaker, may I interject that our dumping laws are explicit on that point. In other words, if sales are made in the export market at prices lower than those in the domestic market, the provisions of the dumping act would apply.


Donald Methuen Fleming: Mr. Speaker, I think the minister will have to go beyond that statement. If he will recall the discussion we had in this house last December on the government's amendment to the Customs Act, he will find that the Minister of National Revenue (Mr. McCann) denied that a sale in the market of origin at a lower price than that which existed in Canada would be conclusive evidence of dumping. I think the minister must go beyond that. It seems to me that the

government must either give much more resolute and realistic interpretation to the Customs Act or it must make some use of the safeguards in this treaty to which I have made reference this afternoon. If we have entered into this treaty with the knowledge that there exists in Japan today a dual price system in the case of those commodities that are going to be exported in increasing quantities to Canada, then it cannot be said to be an unforeseen development if, as a result of those increased exports to Canada, conditions of acute economic distress follow here.


Clarence Decatur Howe: Mr. Speaker, may I point out that the Japanese have entered into that treaty with the knowledge of our dumping laws. If we apply valuations based on the price in the home market, that is the treatment we give to any country that attempts to dump goods in this market.


Donald Methuen Fleming: Mr. Speaker, I still think that statement of the minister does not go the full length of giving the assurance the house should have on this point. The antidumping laws are limited in their effect. We found that to be so in the debate last December. The anti-dumping laws, as they existed prior to that time, were inadequate to cope with the dumping that went on here; and that fact was admitted by the government. The effect of the amendment that parliament passed in December was quite limited. It applies only to end-of-season and end-of-line goods whereas in the case of Japanese exports to Canada, the lines that they are going to be selling here are not the end-of-line and end-of-season goods that we were dealing with, broadly speaking, under that amendment of last December.


Clarence Decatur Howe: I do not like to interrupt the hon. member, Mr. Speaker, but may I say that if there is a two-price system, under the old law, before any revision, and under the newly amended law, the higher price must apply as a basis for duty.


Donald Methuen Fleming: Mr. Speaker, I am afraid that the minister's statement does not agree with my understanding of the practice followed by the Canadian government in its valuation, and as that practice was interpreted by the government ministers last December in participating in that debate.
I have drawn attention to this matter of the dual price system, Mr. Speaker. It is within the knowledge of the government and I think it will be the intention of this house to hold the government accountable for seeing to it that Canadian products are 83276-295
Trade Agreement with Japan not permitted to be prejudiced by the existence in Japan of a dual price system, or any attempted continuation of it.
I was speaking of the reaction in Canada that followed the announcement of this treaty. Canadian labour has expressed itself. Even before the treaty was announced, but when it was understood that negotiations were approaching a consummation, Mr. Bengough, president of the Trades and Labour Congress of Canada, expressed fears in regard to the treaty, particularly for labour in the textile industry. He urged more consideration before any action was taken to admit more freely into the Canadian market Japanese textile products manufactured under conditions that cannot be compared with our Canadian standard of living. These fears that have been expressed, to which I have made reference, and others as well, emphasize the importance of those reservations and safeguards in the treaty to which I have already alluded. I repeat that we in Canada do not need to import one more textile product in order to create unemployment. Unemployment of serious proportions exists here today. Toy manufacturers have expressed their concern as well. They have drawn attention to the fact that in a recent publication, under authentic sources, average wage rates in Japan last September were shown to be 16-8 cents per hour compared with average wage rates in Canada of $1.10 per hour.
In our approach to this problem we naturally must have regard for what is being done in other countries. What is the United States doing to make it possible for the Japanese to sell more of their products abroad? I have already made reference to the fact that the United States has been most generous in outright economic aid, in giving to the Japanese up to September 30, 1953, since the end of the war net grants totalling $2,439 million. In 1951 United States commodity exports to Japan amounted to $592 million and United States imports from Japan amounted to $204 million. In 1952 United States exports to Japan amounted to $620 million and United States imports from Japan amounted to $226 million. The figures for 1953 are not yet available, but the estimate for 1953, based upon actual figures for the first six months of the year, indicates that United States exports to Japan in 1953 will amount to $574 million and United States imports from Japan to $250 million. That indicates that the United States is increasing somewhat its imports from Japan, but the United States is still selling to Japan far more than twice as much as she is buying from Japan. The United States gave Japan
4658	HOUSE OF
Trade Agreement with Japan most-favoured-nation treatment by the peace treaty signed between those two countries in September, 1951. The peace treaty included economic provisions that had the effect of a trade treaty. That treaty was superseded by a regular trade treaty of friendship, commerce and navigation signed in April, 1953, which went into effect on November 4, 1953. That treaty included the same trade provisions as the peace treaty.
Now, sir, there are voices being raised in the United States warning that country that she must increase her imports from Japan if she would see the economy of Japan maintained in sufficient strength, in the face of a rapidly increasing population, to stand the economic rigours in the world of 1954. A press dispatch from Washington of February 23 last reports that Walter S. Robertson, assistant secretary of state for Far Eastern affairs, had testified to the house appropriations committee that he believed an outlet must be found for Japanese trade "or we will inevitably throw Japan into the communist orbit". Then the quotation proceeds:
"X think we should be doing everything within our power to develop trade for the Japanese throughout southeast Asia", he said. "We must have the co-operation of the British to do this. I think we have to be willing to open our markets and accept Japanese goods here in America to a greater extent than we are doing. It poses a very difficult problem for us. It poses political problems on which there are great differences of opinion".
Undoubtedly, sir, there will be great differences of opinion in the United States over increased imports from Japan, and it remains to be seen whether the United States will follow the high note struck by Mr. Walter Robertson in his testimony before the house appropriations committee on that occasion. Canada does not want to be found wanting in taking her fair and rightful share of the burden and responsibilities of assisting, in the world in which we live today, in promoting a degree of health in the Japanese economy when we consider the strategic position that that country holds in east Asia. But, sir, I do not think that we propose to prejudice the interests of Canadian workmen unless the United States is prepared to take her full share of the burden and responsibility.
What of the United Kingdom? The United Kingdom, after the difficult trade and balance of exchange position that developed in 1951 and 1952, took steps to impose restrictions against the importation of Japanese exports into British colonial markets, particularly those in southeast Asia. That was done in view of the difficulties facing the whole sterling group. On January 29, 1954 it was felt by the government of the United Kingdom that conditions had sufficiently improved


to warrant their signing a new agreement with Japan. It was discussed in the British House of Commons on February 1, 1954. The agreement did remove the restrictions that had been imposed on Japanese imports into the British colonial markets, and it meant of course that the advantage that had been enjoyed under those restrictions by the textile and pottery manufacturers in particular of the United Kingdom was gone.
There was a substantial outcry in the United Kingdom over this treaty, particularly from the textile and pottery industries, and it was attacked by the Labour opposition in the House of Commons. Nevertheless the position taken by the British government was that regard had to be had for the position of Japan and that the British government was not justified in continuing to impose import restrictions in the British colonial areas against imports from Japan. While I do not propose to dwell on the subject, I do draw attention to the fact that the British government, taking note of the fact that the sterling area had sold to Japan in the previous year twice as much as the sterling area had purchased from Japan, decided that it must face up to the fact that a way had to be found to permit the Japanese to sell more goods abroad in the sterling area.
Now, sir, I come to my conclusion, and I apologize to the house for having been so long in coming to it. I can only say in extenuation that this is a matter of high importance on which I think none of us can come to a conclusion without very careful regard for all of the factors I have sought to lay before the house today.
How should the house react to the resolution now submitted to us? Sir, I cannot dismiss from my mind measures such as the Colombo plan and the spirit in which we entered into them. Under the Colombo plan we took note of the economic conditions in the three self-governing nations of the British commonwealth in Asia. We indicated that we Canadians were prepared to take a share of the responsibility of assisting those sister nations to strengthen their economies. It is quite true that the Japanese trade treaty is not quite the same kind of plan as the Colombo plan. We are not being asked to make gifts to Japan. Nevertheless there are some facets of the spirit of the Colombo plan that it seems to me are directly relevant to our consideration of the Japanese trade treaty.
We took account then of the necessity of strengthening the economies of free nations in Asia, knowing that on the northern border of India today stands communist China, having swallowed up Tibet. We took account

also of the pressures upon the economies of those countries. We took account of the fact that the communist party is active today in countries like India and Ceylon. We thought that we had some share of responsibility for trying to assist democracy in those countries to survive these attacks of a sinister, cruel and materialistic creed. We believed that we could make a contribution to the peace of the world through better trade relations.
Are we justified today, sir, in shutting out Japan from our consideration in matters of that kind? It seems to me that, while we do not put Japan in the same position as we do our sister nations of the commonwealth in Asia, the spirit that dictated the action that we have taken in making annual contributions through the Colombo plan cannot be dismissed from our minds in relation to the resolution before us today.
All of us here believe that we can make a contribution to better understanding, to more friendly relations between the peaceful nations of the world if there is trade between them on a proper basis. I believe, therefore, that in deference to our responsibility to make Japan feel there is a place for her amongst the democratic nations of the world, we must take account of the necessity of maintaining a degree of health in the economy of Japan which depends so substantially upon export trade for her economic survival.
The second factor that I mention in this conclusion, sir, is this. We have entered into an era of competition such as we have not known for a decade and a half. The atmosphere of world trade is going to be far more competitive in these days immediately ahead of us than it has been since the outbreak of war in 1939. Britain is finding it today. Germany, due to the tremendous exertions of the German people in this postwar period, is a factor in the export markets of the world today, far greater than we have experienced since 1939. Now Japan, under this treaty, will possess a position in the Canadian market that will enable her to come into the most direct form of competition with Canadian products. It will be a calamity for all Canada if rigidity in the Canadian economy, high costs of production including the high cost of government, prevent the Canadian producers from meeting that competition on fair terms.
In this respect I should like to quote from a statement that appeared recently in a newspaper that is normally regarded as favourable to this government. It is the Ottawa Citizen of April 2, 1954, commenting directly on this treaty. It says:
Rather than respond by giving Canadian manufacturers additional tariff protection, the Canadian 83276-295J
Trade Agreement with Japan
government might well consider revising downward its own sales taxes. This would put Canadian business in a better position to compete with American goods, and incidentally with those from Japan and other outside sources. It is true that the lost revenues must be made up. Apart from resort to higher taxes in other fields, the government might find itself taking in more money from taxes at the reduced level, because of the stimulating effect on domestic business.
If Canadian producers-and I am thinking principally of Canadian workmen-find themselves confronted by competition from Japan which they find to be unfair, then I say that the government will have to bear its full share of responsibility for what it contributes through high cost of government and high taxes towards high Canadian costs of production.
There is one matter that I think should also be mentioned, Mr. Speaker. It is not a matter of the same far-reaching importance and extent as the matters I have just mentioned, but I do recall that the Canadian Manufacturers Association, in a submission to the government on November 12, 1953, on this subject, among other recommendations, said this:
That a marking provision be incorporated into the agreement-
That was the forthcoming trade agreement between Canada and Japan.
. . . requiring that all fully-finished manufactured Japanese goods be marked, stamped, branded or labelled in legible English or French words, in a conspicuous place, so as to indicate the country of. origin. In advancing this proposal we desire to point out that all goods which are imported into the United States from Japan are required to be clearly marked with an indication of the country of origin.
It is no disparagement of the Japanese to say that they are great imitators. For that reason, as well as for other reasons that are too obvious to require mention now, I do urge that effect should be given to that recommendation that was submitted to the government last November.
The safeguards under this treaty which have been stressed by the minister, both today and on March 31, are something that we rely upon in giving our support today to the treaty. These safeguards can remain simply a dead letter, a jumble of words in this treaty, unless there is and will be on the part of our government a resolute determination to make these safeguards effective for the purpose for which they have been written into this treaty and for which we are relying upon them today. If they are permitted to remain a dead letter, if the kind of occasion contemplated by these safeguards arises, then we will be calling this government to account. In the meantime, we say to the government we are taking due note
4660	HOUSE OF
Trade Agreement with Japan of these reservations and safeguards. You have stressed them in asking the house to give adherence to this treaty. We are relying upon your assurance. We look to you to make that assurance good one hundred per cent.
Then, sir-and this is perhaps something that confronts any opposition in relation to a government measure of this kind in recognizing its far-reaching	importance-the
government has, by a series of secret negotiations, arrived at an agreement with the Japanese government. The country was told singularly little, indeed nothing of any importance, about the course of these negotiations. We do not even know who were the negotiators on behalf of Canada. The government, with the knowledge that is available to it in the departments of government principally concerned, has chosen to enter into this treaty and to ask the house to approve it. A very heavy measure of responsibility consequently rests upon the government.
We in this house can deal with this only In general terms, in principle, and it is on the basis of principle that I have approached the treaty today. I remind the house again, and I hope if questions later arise the country will bear this in mind, that all that is afforded :in this House of Commons in relation to this treaty is an opportunity at one stage today to discuss the treaty in general terms. There is no opportunity afforded to us to ask questions, to dig into this question and that question that naturally arise in relation to the treaty. We have no opportunity to question the minister. We have no opportunity to question the officials of the Department of Trade and Commerce or the Department of External Affairs. The government takes the responsibility for negotiating this treaty. It takes the responsibility for asking the house to approve the treaty. We are prepared to do so in principle with the reliance that I have indicated that we place upon the solemn assurances given to us-and it is on that basis and that basis alone that we proceed today.
Finally, sir, may I express the hope that I am sure is entertained by every hon. member in this house, that in approving this treaty today we are not unmindful of the problems involved, we are not unmindful of the problem it presents particularly to producers of Canadian textiles, steel products, electrical products, and others of the various categories that I have mentioned, we are not unmindful of the responsibility that will rest upon us as an opposition to see to it, so far as we can, that the government is reminded whenever occasion arises of the


responsibility that it assumes under this agreement to make those safeguards effective.
On the other hand, Mr. Speaker, it is I know in the mind of every member of this house that we today, in an angry, tumultuous world, a world in which there is still so much of strife, of discord and bloodshed, may somehow through this means make a contribution to the restoration of a spirit of friendship and good will for the people with whom we were not long ago engaged in deadly war, but who we hope, through means like this, may be brought into a wholesome and friendly and lasting relationship with our country and with other democratic and peace-loving countries in a family of nations who desire that their relationship together shall be characterized by friendship, good will and neighbourliness.


Major James William Coldwell: Mr. Speaker, in common with other members in the house and all parts of the house we welcome the opportunity to discuss this treaty. I am sure that throughout the house it is hoped that this treaty may prove beneficial to Canada, beneficial to Japan and beneficial to the world as a means of promoting good will and peace among all men.
As I sat here this afternoon listening to the hon. member for Eglinton (Mr. Fleming) and the exhaustive analysis he gave of both the treaty and matters connected with the formulation of such a treaty, I thought that his speech illustrated the difficulties and, indeed, the contradictions which abound in relationships of this sort in the world at the present time. I think that on a reading of the speech that he has made those contradictions will be quite apparent to the reader, as they were to those who listened to the speech this afternoon.
First, I want to say that I agree with him that it would have been preferable to have referred this treaty to the banking and commerce committee in order that we might investigate it rather more fully. I fancy I heard him say ". . . as we did with the general agreement on tariffs and trade". If he said that then it is not my recollection. My recollection is that the general agreement on tariffs and trade came into this house, the house was called especially to consider it, but it more or less died on the order paper without going to committee. I think it was the intention of the government of the time that it go to committee but I have no recollection of it going there and certainly no recollection of any report coming back or of this house having had an opportunity to approve or disapprove of that agreement.


Clarence Decatur Howe: The government has never ratified that agreement.


Major James William Coldwell: No. We have never had an opportunity of expressing approval or disapproval, and the government has never ratified it. I do not think it went to the banking and commerce committee.


Mr. Quelch:: It went to the committee but the committee never made a report on it.


Major James William Coldwell: I was just trying to think what happened to it.
As I was saying, there are contradictions in trade relationships, but nevertheless I think the house has to approve of a treaty of this description because, after all, Japan is a great and important nation. My thoughts this afternoon wandered back not only to pre-war years when we were supplying Japan with copper, scrap iron and all the rest of it-material that was used at Pearl Harbor and other places against our own people and own allies-but I was remembering the speeches that were made in this house during the war. I do hope that out of the revived Japan we shall get a democratic Japan; that we shall not get another Japan rearmed and led by militarists once again to become something of a threat to the world, alone or even in co-operation perhaps with others who may threaten the peace of the world at any time. There is no saying what may happen because Japan today is cut off from the markets which she once had as her primary outlets-Manchuria, Korea and China. She is competing for what trade remains in southeast Asia.
As the hon. member for Eglinton said, a population of 85J million people, increasing at the rate of 1-2 million per year-I think that was the figure he gave-occupying a territory two-fifths of the size of British Columbia with only 15 per cent of the whole area arable, is bound to seek both food and outlets for the commodities which it must manufacture in order to obtain both food and raw materials.
For example, in the years 1934-36 manufactures exported from Japan represented 80-7 per cent of the country's exports; 71-6 per cent of the imports by Japan were in the form of foodstuffs and raw materials. That indicates how dependent Japan is for her very existence both on the food with which she must sustain her people and on the exports which she must send abroad in order to pay for the raw materials and the commodities she requires.
We are told that-and this is the year 1952 that I am speaking of-90 per cent of all exports were manufactured goods and that foodstuffs and raw materials accounted for 86 per cent of the imports. All ten of
Trade Agreement with Japan Japan's most important imports are raw materials. Silk is the only raw material exported in quantity. I think that gives a very clear picture of the position in which Japan finds herself. It offers opportunity for Canada-if we can grasp that opportunity. Representing as I do a western and wheat growing area I am, of course, impressed not only with the possibilities of maintaining the market we have established in that country for primary products from the prairie provinces, but also with the possibility of extending those exports.
The demand for Canadian wheat, as the minister indicated this afternoon, has grown steadily over the past several years. The rising demand for wheat products in Japan stems of course first of all from the very rapid increase in population in that country, the changed habits of food that they have acquired in the post-war years and the fact that they have been cut off from the sources of rice upon which they so largely depended in bygone days. The result is, we are told, that not only adults, but more particularly the young people in adolescent years, are becoming accustomed to new cereals, and those new cereals are of particular interest to us because, as the figures produced by the minister and by the hon. member for Eglinton indicated this afternoon, they are wheat and barley, two very important cereal products that we produce in vast quantities in this country.
The United States has been the leading supplier of wheat in the post-war years, but our supplies of wheat to that country have been increased quite markedly. Of course Japan does raise wheat herself, but oviously from the amount of arable land in the country and the fact that rice is grown in large quantities in the country it is certain that Japan will never be able to raise enough food, and particularly cereals, in order to feed herself.
Then of course we are given to understand that over the past few years there has been an increase in meat consumption. To some extent the Japanese have turned from fish to meat for their proteins, and that again means that there is demand for cereals for stock feed and cattle feed, and so we can take that into account.
What our wheat board has to bear in mind is that under the present circumstances, with the amount of cereals available for disposal on the markets of the world, they are in a very competitive area when they try to sell wheat in Japan, and they should do everything possible to promote the sale of it. But it is not only the sale of our wheat that is necessary. If Japan is to buy Canadian
4662	HOUSE OF
Trade Agreement with Japan raw materials, lumber, minerals, wheat, barley and so on, then she must be enabled to pay for those products, and there is only one way in which nations can pay for the products that they buy, that is by sending abroad something that is saleable and something that will give them the necessary funds with which to pay for their imports. Therefore a trade treaty of this description is of primary importance to the producers of our raw materials in Canada, and, as the hon. member for Eglinton has well emphasized, of primary importance also to the people who work in industries that may be competitive or that may find some competition from the Japanese sources.
When this trade treaty was under discussion, and of course before we knew anything about its contents, in its initial stages I was very pleased to see that the representative of Japan in this city made it very clear on November 3 last that Japan could never balance her trade with Canada even if we gave her lower tariffs. He then went on to say that she would have to reduce the gap between her imports from Canada and her exports. He said:
... if the agreement goes through, Japan likely will be concentrating on Canada's big market for capital goods, rather than on such consumer items as toys, novelties and other sundry items.
And further:
These sundry items, small in price, did not help to boost the total sales figures to Canada by any great amount. Capital goods involve expenditures of great sums of money and thus might help narrow the trade balance gap.
Well, we all hope that that is so. It seems to me that in this treaty the government has attempted that, without raising tariffs, indeed lowering tariffs, because let us bear this in mind that the increase in trade with Japan in the last few years has been an increase under the general tariff, and it is now proposed of course to give Japan the mostfavoured-nation tariffs.
As the hon. member for Eglinton pointed out, there are attempts in this treaty to safeguard Canadian industry which might be affected by unfair competition. Unfair competition is very difficult to define. I am one of those who believe that we should do everything we possibly can to remove the barriers to trade across the world, and to give our own people an opportunity of entering world markets as well, at the same time, doing whatever we can to see to it that our producers are not subject to what might be termed unfair competition, though the words "unfair competition" are at best very difficult indeed to define.
It seems to me that this treaty will help to. bring about better relationships and may


give us a better market for certain of our products that of necessity we must send abroad. I noticed the figures given by both the minister and the hon. member for Eglinton of the exports and imports of last year. In round figures our exports to Japan amounted to $119 million worth, and our imports, in round figures again, to about $14 million worth. I also read-I have not it before me, but my recollection is quite clear -the speech that the Prime Minister (Mr. St. Laurent) made in Tokyo when he was visiting there on his world tour. I read that speech very carefully at the time, and I remember the Prime Minister pointed out that while there seems to be a very large gap, $8 for $1 in connection with this trade, yet this does not present a wholly fair picture; that we do import certain Japanese goods indirectly by way of some other countries. Possibly the Prime Minister was thinking of the United States. If that is so, it would help our trade relationships with Japan if we could import those commodities directly into this country, Japan thereby earning Canadian dollars instead of United States' dollars with which the Japanese importers could purchase Canadian goods. I hope that that may be one result of this treaty.
There are a number of provisions in the treaty, which I am not going into because the hon. member for Eglinton went into them very thoroughly, which may be applied, duties which may be applied and evaluations which may be applied, and so forth. The main interest that any of us can have in this treaty is that we hope it will promote the welfare of Canada as well as of course the welfare of the people of Japan; that it will be mutually beneficial; and in spite of the fears that have been expressed this afternoon, we are doing the proper thing in approving of this treaty today and giving it at least a fair trial.
I know it can be said, and said quite accurately and truthfully, that prior to the second world war certain unfair trade practices were indulged in by Japan. A couple of weeks ago, while doing a little packing for storage purposes, I had a look at some china and I noticed on one piece the quite large letters "U.S." and then very small letters "Pat"-"United States patent", and almost so small that you had to have pretty powerful glasses to read the little word underneath "Japan". You would imagine if you picked it up casually and took a look at it that it was of U.S. manufacture. Those people from British Columbia will recollect how there were certain cans of fish marked "Can" and most people thought that that was indicative of an article produced in

Canada and of course it was not. Now the Japanese government agrees to discontinue these unfair trade practices. I hope that if we indulged in any unfair trade practices ourselves that we too will undertake to do away with them.
A short time ago I brought to the attention of the house weaknesses in our legislation regarding the marking of countries of origin, and the new act has now been proclaimed. I hope it will have some effect at least in this particular matter.
However, in spite of the fears which have been expressed, fears which I know are legitimately held by the workers, for example, in the textile industry, I hope these fears will be unfounded and that we may find this treaty of benefit to all classes of producers in Canada, because there is one thing to be said and that is that if we have prosperous producers in one field of industry, then that in the main is reflected in other fields of industry. If our western farmers are able to dispose of their cereals advantageously then they have money with which to buy, not Japanese textiles, but large quantities of Canadian textiles, although they may still buy a small number of textiles originating in Japan. In other words, I hope a treaty of this description will assist the health of the entire economy of this country. I do not wish to repeat what the hon. member for Eglinton has said. I know he will not misunderstand me when I say he has put before us all the contradictions to be found in trading relations of this description. But I hope we may straighten out these contradictions and find this treaty mutually beneficial to Canada and to Japan.


Mr. Solon E. Low (Peace River):: Mr. Speaker, I have listened with real interest this afternoon to the speeches made by the minister and the spokesmen of the other two parties in connection with the agreement on commerce between Canada and Japan. As I listened to those speeches I could not escape the feeling that it is terribly difficult, when we come to consider matters of trade and commerce, to lay down any hard and fast rule which will work successfully in all cases for our people. I hope I shall not be guilty, therefore, of trying to lay down any hard and fast rule in connection with what I shall have to say this afternoon.
I was very pleased to see that Canada has not treated Japan as vanquished countries have so often been treated after wars in the past. I take real satisfaction out of the fact that Canada, through this treaty and in other ways, is according to the Japanese people the kind of honourable treatment which ought to be extended to them by a
Trade Agreement with Japan mature people with a well developed social conscience, and I do believe that that is the kind of treatment Canadians are according to the Japanese people.
I have examined the terms of the agreement most carefully. I have listened to the speeches made this afternoon by the minister and the hon. members who followed him. It seems to me that the agreement adequately safeguards Canada's interests. I say that because I discovered through my reading of the treaty that British preferences are not interfered with, and we are free to apply dumping duties in the event that Japan at any time should resort to dumping goods on to our market at unreasonable prices. It just occurs to me though how absurd the world situation is when we have to cry out against being able to buy things too cheaply. However, there it is; it is just one of those absurdities you come across when you talk about the world of trade.
Coming back to the safeguards which I think are in the treaty, though the mostfavoured-nation principle occupies a prominent part of the agreement escape clauses have been provided which make it possible for either party to apply trade or exchange restrictions if necessary in order to safeguard its external financial position and balance of payments.
I would like to comment just briefly on the most-favoured-nation principle. That principle plays a very prominent part in the treaty. It is included in article I, as a matter of fact. Now, this is sometimes called nondiscrimination, and in my experience a good many people have been bowled over by the sound and connotation of that expression "non-discrimination" and they chew on it, adhere to it, or so they say, with almost religious zeal and fanaticism. But what they do not seem to realize is that the unconditional, and I emphasize that, most-favourednation principle was invented by the United States as a means of completely destroying the British preferential system so that whenever it suited her purpose she could break into the game and with her great industrial power dominate world trade.
The United States has demanded the acceptance and the inclusion of the unconditional most-favoured-nation principle in all international trade treaties and agreements for many years. All during that time, strangely enough, she has been striving with all her might, and one can say with her magnificent capacity, to make herself self-sufficient. Now, if you ever want some contradictions take a look at that. Today, the United States, for all practical purposes, is in that position of self-sufficiency. All during the days when

Trade Agreement with Japan Great Britain, Germany and Japan exported goods to the amount of no less than 20 per cent of their total national income, the United States was exporting only six per cent gross, and if inter-company relationships were eliminated from that six per cent the total of her exports would not be more than about three per cent of her national income.
I cite these figures only to show that while most countries in the world have continually to depend upon foreign trade to a very large degree and therefore have done nothing to adjust their thinking toward the development of home markets, the United States was moving deliberately and rapidly toward a position of self-sufficiency, in which position she would not have to depend to a very large extent on foreign trade.
The other nations were blind to what was going on, or they appeared to be; and therefore the unconditional most-favoured-nation principle was slipped over on them. But since the adoption of the unconditional mostfavoured-nation clause in trade treaties, we have operated on the escape clauses more than on the principle itself. It appears that in the present agreement with Japan provision has been made to continue on this line, namely operation on the escape clauses more than on the principle.
The agreement we are considering is, in reality, a bilateral agreement including the qualified most-favoured-nation clause. I was particularly glad to find that we did not insist upon inserting in this treaty the unconditional most-favoured-nation treatment. That fact indicates that we are really ready and willing to give the Japanese people a reasonable chance in the world of trade.
Finally, the present treaty expresses Canada's right to apply export or import restrictions under our security legislation. It therefore seems to me that there is little to worry about so far as the wording of the treaty is concerned. How it will work out in the future we do not know at the present time. We certainly hope that it will work out well. I notice, however, that one of the terms of the treaty is that it shall stand for one year and after that period can be terminable upon three months' notice by either party. Hence it is not a thing which could not be corrected if we found conditions under it growing intolerable.
Many Canadian people are showing some concern lest the agreement with Japan result in harm to them and to industrial enterprises in this country. What are we to say to these people? For example, a few days ago I received from certain toy manufacturers in Canada a letter in which they complained

about the possibility of harm to their industries under this treaty. The question is this: What are we going to say to such groups as that?
In the first place, the agreement itself says that either party may deviate temporarily from the terms of paragraphs 1 and 2 to prevent undue damage to the industries of either country through the full application of the terms of the treaty. That provision in itself is some safeguard. In the second place, I think we ought to keep in our minds the thought that to be fair in this world today we must adopt a policy of "live and let live". Certainly that should be the cardinal principle of all our external relations. Japan therefore must be allowed her proper place in the world of trade and must be allowed an amount of trade which will make it possible for her people to find employment and to live on a decent standard.
The terms of the trade agreement are not, in my opinion, more generous towards Japan than they should be. We ought to have regard to what was done to Japan by the peace treaty which was signed in 1951, if I am not mistaken. Let us not forget also that Japan felt she had been forced to resort to war in order to break out of unbearable restrictions that, over the years, had been imposed upon her trade before 1340 or 1941. I have read statements by high-placed Japanese in the pre-war years which definitely point to a feeling of aggravation at those restrictions, particularly the restrictions placed upon Japan by the unconditional mostfavoured-nation clause.
I am conscious of the fact that for many years perhaps Japan practised unfair trade arrangements; that is, she resorted to unfair trade practices. That matter has already been stressed by the hon. member for Rose-town-Biggar (Mr. Coldwell) this afternoon. But they had the feeling-and they have expressed it in no uncertain terms-that they had to resort to force in order to break out of the extremely vicious type of aggravating restrictions placed upon them in their trade relations prior to 1941.
It seems to me, Mr. Speaker, that we should also be reminded that the treaty of peace signed with Japan in 1951 substantially reduced Japanese territory. As I pointed out at the time when we were discussing that peace treaty, that reduction was exceedingly serious as it had left 85 million people with not nearly enough land on which to produce the food they needed. Some of the richest and most important rice-producing areas were taken from them, a circumstance which doubtless accounts for the fact that in this

past year they have been importing substantial amounts of wheat and barley from Canada.
I was well pleased to hear the minister say this afternoon that Japan had become our third largest customer so far as wheat is concerned and that she had also bought substantial amounts of barley from us. In these and other things Japan is now and, in my judgment, can continue to be for many years, one of our best customers. She is nearest to our great Pacific ports from which we export great quantities of cereal grains. However, we in this group adhere to the principle that trade must be a two-way street. The Canadian people should take note of the fact that last year we bought from Japan, according to the minister's own words this afternoon, only 30 cents' worth out of each $100 worth of our Canadian imports. That is a fairly small figure for imports from a country that is our third best wheat customer.
I agree with the minister that there is plenty of room for imports into Canada from Japan. Indeed if we want to cultivate markets in Japan for our products, we must buy Japanese goods in return. As was said by the hon. member for Rosetown-Biggar, that is the only way in which the Japanese people can pay for the things they want to buy from us. It is of particular importance that we cultivate a permanent market for our wheat. I say "particular" in the light of the huge carryover from previous years that we have in Canada of cereal grains. Japan is and always has been seriously short of food materials, particularly good cereal grains and proteins. When I mention proteins, let me say that perhaps the years ahead may see an expansion of our exports to Japan of protein foods if we make wise use of the opportunities afforded by the agreement we are now considering and of the concessions granted to Canada under that treaty.
Those concessions spoken of by the minister this afternoon put the Canadian producer into a fair competitive position in Japan. Those Canadians who oppose the ratification of the treaty-and I suppose there will be a number of them-should be told that, generally speaking, a fair-competition policy will handle the situation for them as it will for everybody else. We put forward the view that our aim should be to build up in Canada a balanced economy, one wherein agriculture and industry are in fair balance. We think that is the safest type of economy in all times-in wartime and in peacetime- and the most useful type in a world which so often is the scene of conflict and strife.
Trade Agreement with Japan It therefore seems that we must have in Canada more industry employing more people. But of course the big question everybody asks is this: What industry?
Again we face a problem of trying to lay down something like a hard and fast rule, but we cannot do it. Therefore we have to be guided by considerations of the time and of the circumstances under which we live. There are, it seems to me, those industries which are absolutely essential at all times, in wartime and in peacetime. There are those industries that are essential in times of war and of world dislocation, but perhaps only desirable in times of peace. Then there are those that are essential neither in time of peace or war. These could be called desirable just the same as the others if they turn out useful goods and services and give employment to our people under fair conditions.
But in any case where any of these industries do put pressure on the government for protection against Japanese fair competition in our market, we think that the government should most carefully examine the whole situation in each individual case to make sure that we do not in any case militate against Canadian consumers by extending protection to industries that have not done their utmost to keep down their costs to efficient levels by every means possible, including the plowing back of a substantial part of their profits into plant improvement and modernization. Here again, Mr. Speaker, I say that it is pretty difficult to lay down any hard and fast rule, but that at least seems to be the expression of a principle that might guide us in determining what should be done in any case where an industry feels that it is in danger as a consequence of this treaty.
We are likely to hear protests from the textile industries. How are we going to treat those protests? That is another question, and certainly it is hard for me to say what should be done. But I remind the house that some years ago the government of Canada established what was known as the Stevens committee to investigate the textile industries and others. It had to do with price spreads and that sort of thing. The Stevens committee discovered that Canadian textile industries were inefficient. They paid poor wages and took large profits, little of which was turned back to modernize plants and keep them up to date.
It seems to me that kind of industry does not deserve protection against fair competition at the expense of the Canadian consumer. Maybe the situation has changed. It may possibly be that the Canadian textile industries have improved the whole situation since

Trade Agreement with Japan the days of the Stevens investigation, and if so consideration should be given to that fact. But let me emphasize again that the government should not be pressured into extending protection to any industry without the fullest consideration of all the facts and careful measurement of the value to our country and the world of those industries, as well as the position in which our consumers would be put as a consequence of what might be done.
We are not forgetting, Mr. Speaker, that the success of this treaty, as well as the health and vigour of Canadian industry, will depend very largely on how we put our own house in order. There must be a careful and critical review of our taxation structure to ascertain what effect our taxes are having on costs and on our competitive position. I agree with the hon. member for Eglinton (Mr. Fleming) that as we enter this period of intensive competition with countries like Japan, Germany and others that have revived wonderfully from the effects of war we have got to be more cost conscious than ever before in our lives. Consequently it seems to me every effort should be made to reduce taxes, especially those that are imposed on commodities and that pyramid costs and push up prices.
To be in a healthy condition our home markets should constantly be in possession of adequate purchasing power to enable the Canadian people to purchase all of the production of Canada if they want to buy it. In that favourable position we can, when we export goods to Japan or any other country, import goods of equal over-all value from those countries with confidence that these imports can be sold and used by our people. Under circumstances like that we would not have to resort to the practice of maintaining unfavourable trade balances at the expense of other countries, and therefore one of the main causes of war would be removed.
I think it might have been wise to have the agreement considered by the banking and commerce committee, and perhaps the minister may yet agree to have that done. In any event we think that the treaty does adequately safeguard Canada's interests while at the same time giving Japan a chance for a fair share of our trade. Consequently we approve ratification, and in approving it we express the hope that the treaty will be one of the big factors in cultivating peace, good will, security and prosperity in the Pacific area and in the whole world.


Mr. A. W. A. White (Waterloo South):: Mr. Speaker, I rise to take part in this debate on the Japanese trade agreement because I feel that the agreement when it is ratified will


have a far-reaching effect on many industries in this country, chief among which is the textile industry. In my maiden speech last year I attempted to direct the attention of the house to the decrease in the number of people employed in the fourteen textile mills in Galt, Preston and Hespeler, and since that time the situation has not improved but has grown gradually worse. In the year 1950 the textile industry in Canada which is composed of two branches, primary textiles and secondary textiles, employed approximately 200,000 people or one-sixth of our total industrial labour force. This industry is therefore one of the largest employers of industrial labour in Canada.
The number of people employed in the primary textile industry has gradually dwindled until today there are less than 82,000 textile workers employed in this branch of the industry in Canada, and a large number of these are on short time. During the past number of months nineteen textile mills have closed their doors and it is very doubtful if any of them will ever open again under present conditions. A number of the larger mills are located in large industrial cities and undoubtedly many of the unemployed textile workers in these centres have since been absorbed in other industries, but the majority of the textile plants are located in small communities and are the main source of employment. Such is the case in the town of Hespeler in my riding. In this small town, with a population of 3,400 people, there were 1,415 people employed in 1950 in the Dominion Woollens and Worsteds mill and the Artex mill whereas today there are only 847 people working in these two plants, and they are on short time.
While I was home during the Christmas recess workers and management voluntarily accepted a 13 per cent cut in wages to help keep the Dominion Woollens and Worsteds mill operating. Many of the employees of this mill have their whole life savings tied up in their homes in the town of Hespeler, and the closing of this mill would cause them to lose everything that they have worked for. This was a sincere effort on the part of management and employees to protect their jobs and their homes by this action. In addition, the entire business life of this community is almost entirely dependent on these mills continuing to operate. I know from communications that I have received from the board of trade of Hespeler, as well as the workers, that they are not too optimistic about the future of the textile industry under conditions as they exist today.

What has happened to the textile industry in Canada? Certainly any suggestion that the industry has overexpanded or is inefficient in my opinion is not borne out by the facts. In the period from 1935 to 1939 the textile industry in Canada was supplying 73 per cent of the domestic market. In 1950, with full employment, this industry was only able to supply 68 per cent of the domestic market. I do not believe, therefore, that the suggestion the industry has overexpanded is true. These statistics establish, in my opinion, that with the increase in population and the increase in purchasing power of the Canadian people the textile industry was not able to supply as large a portion of the domestic market in 1950, even with full employment, as it was able to supply in the years from 1935 to 1939.
It was pointed out also in this house by the hon. member for Lanark (Mr. Blair) that the textile industry had spent $450 million for modern equipment since the end of world war II, bringing the production of the industry to the highest point of efficiency. Any suggestion that the textile industry in inefficient, therefore, is in my opinion not a valid one. The amount of textiles being purchased in Canada has been increasing each year since 1950, yet the amount of textiles supplied by the Canadian mills has gradually dwindled until today the textile mills in Canada are only sharing the domestic market to the extent of 51 per cent. I can only conclude from this information that the depressed condition in which the textile industry finds itself today is, to a large extent, due to the ever-increasing quantities of imported textiles being sold on the Canadian market.
The Canadian textile industry faces competition from cottons and synthetic materials from the United States and Japan, while their competition in woollens and worsteds comes from the United Kingdom and the rest of Europe. The average rate of wages paid textile workers in the United States is $1.37 per hour, compared with $1.11 per hour in Canada. This difference in wages, with the addition of the present rate of duty applied against the American textiles, is offset to a large extent by the fact that the United States manufacturers have a potential market ten times greater than the Canadian industry, which is limited almost entirely to the domestic market because of the higher rates of duties prevailing in other countries.
The United States textile manufacturer, with his greater potential market, will run off an average of 100,000 yards of one material, whereas the Canadian textile mill will have only an average run of 1,000 yards.
83276-296J
Trade Agreement with. Japan This, in itself, increases the production costs of the Canadian industry by approximately 35 per cent, because after each run of cloth it is necessary to make certain changes and to clean all the cards. The Canadian textile manufacturer is also confronted with another type of competition from the United States. It is the dumping of surplus goods. I was very glad this government recognized that this unfair trade practice existed, and took steps to correct the situation by the passing of Bill No. 29 at this session.
As I stated before, the Canadian textile industry is also confronted with competition in the field of cottons and synthetics from Japan, where the average hourly rate of wage is 13-9 cents per hour as compared with $1.11 cents per hour in Canada. This competition is serious enough with the present rate of duty, and will become more serious if Japan is given most-favoured-nation treatment. The Canadian textile mills are now facing competition in the fields of woollens and worsteds from the United Kingdom, where the hourly rate of wages is approximately 40 cents per hour and from other countries in Europe where even less wages' are paid.
I know that there are many reasons why a trade agreement with Japan is necessary.
I know that last year Japan bought Canadian wheat and other primary products, as-well as some of our natural resources, to the. value of $119 million, and that Canada purchased during the same period from Japan only $14 million worth of the goods that Japan had to sell. It is quite obvious that Japan cannot continue indefinitely with such an unfavourable balance of trade with this country. I recognize also that Japan is the one bulwark of democracy in that part of the world. If we refuse to trade with her on some fair basis, we would inevitably be driving her into the hands of the communists.
I am convinced, however, that if Canada and Canadians are going to continue to enjoy, the second highest standard of living in the world, then there will have to be a complete revision of our tariffs in relation to-those countries where wages are so much lower than our own. If that is not done we will be confronted with more and more industrial unemployment. In my opinion it would be a backward step to lower our standard of living in order to compete with these nations. The member for Assiniboia (Mr. Argue), in his speech during the budget debate on April 13, 1954, as recorded at page 4036 of Hansard, said:
If you want to correct unemployment in Canada, put some purchasing power in the pockets of
4668	HOUSE OF
Trade Agreement with Japan
western farmers. Take steps to buy their grain, and in my opinion there will be no unemployment in a matter of a few short months.
The western farmer is no different from anyone else, and if he can buy imported goods cheaper than he can buy Canadian-made goods he is going to do so. This scheme is not going to correct industrial unemployment in this country. No Canadian industry can ever hope to compete with manufactured goods in those countries in which the wages paid are so much lower than those paid in the Canadian industry, no matter how much the industry improves its efficiency or methods of production. The impact of competition in manufactured goods from these low-wage countries is being felt by some other industries in Canada in addition to the textile industry.
Another such industry is the machine tool industry in this country, which was so important to Canada's war effort. The Canada Machinery Corporation in the city of Galt, which normally employs 300 or more persons, now has a payroll of only 90 people, and the R. McDougall Company is equally hard hit. There is no doubt in my mind that Japan has a substantial machine tool industry because such an industry was very essential in order for her to participate in the last world war. Since the machine tool industry in Canada is in a depressed condition from competition with the low wage countries in Europe where skilled mechanics get 50 cents or less per hour compared to $1.62 an hour paid in Canada, it would seem to me that any large imports of machine tools to this country from Japan would almost be a final blow from which the industry would find it exceedingly difficult to recover.
The devaluation of the pound and the premium commanded by the Canadian dollar has had the effect of reducing the present tariffs still further. Therefore I would suggest that the tariff board should be authorized and instructed to review our entire tariff structure in the light of conditions as they exist today in order to determine what impact foreign manufactured goods, especially those from low wage countries, have on our domestic industries. I believe that this should be done as soon as possible so that the government will have this information before it when the general agreement on tariffs and trade comes up for review next year.
In going over the Japanese trade agreement I was very glad to see that the agreement is only for one year and can be terminated by either of the contracting parties on three months' notice at the end of the year. I was also very pleased to see that in this agreement there was included an escape clause


which allows Canada to place its own values for duty purposes on any Japanese products which, as a result of the said agreement, are being imported into Canada in such increased quantities and under such conditions as to threaten serious injury to Canadian producers of competitive products.
This agreement secures for Canada another potential market for its primary products and natural resources which is very desirable, but in return Canada has extended mostfavoured-nation tariffs to Japanese manufactured goods which in effect applies the same rates of duty against Japanese manufactured goods as are at present applied against manufactured goods from the United States and other nations who are included in the general agreement on tariffs and trade. This places Japan in a preferred position in competition for the Canadian market since the wages paid in their country are so much lower than those paid in the United States and other countries of Europe. Even if the escape clause is used it only means that Canadian industry has another competitor for its domestic market in the same category as the low wage countries of Europe.
I therefore repeat again and strongly urge that the tariff board should be directed and instructed to investigate our entire system of tariffs in order to determine the impact imports from low wage countries have on our domestic industries so that with this information adjustments can be made in our tariffs that will permit Canadian industries to have an opportunity at least to compete in our domestic market with manufactured goods imported into Canada from countries where wages are so much lower than in our own.
In my opinion we would then be creating an economic climate in our country which would permit industry and agriculture to prosper side by side.


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
4670	HOUSE OF
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
[Mr. Weselak.l

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.


[Stage Direction]
Motion agreed to.
1954	4671
Vocational Training Co-ordination Act VOCATIONAL TRAINING CO-ORDINATION ACT

[Stage Direction]
On the order:
House in committee of the whole on Bill No. 326, an act to amend the Vocational Training Co-ordination Act. (Without amendment).-The Minister of Labour.
Mr. Speaker:: Is it agreed that I do now leave the chair?


Howard Charles Green: There was no announcement last night that this would be up. In view of the fact that it is ten minutes to six o'clock, I suggest that the house adjourn.


Mr. Harris:: I have no objection to the house adjourning. I hope the practice will not grow of visiting on the house leader his inability to predict the length of any debate, and thereby closing the house early. If it were the final closing, I would not object. I move that the house do now adjourn.



BUSINESS OF THE HOUSE

Walter Edward Harris: Tomorrow we shall begin with the Department of Northern Affairs and National Resources; then transport. On Friday, if northern affairs are not completed tomorrow, it will be continued, but the Minister of Transport will not be here and will not be able to go on on that day, so we would take, after northern affairs, post office and mines and technical surveys.
Motion agreed to and the house adjourned at 5.50 p.m.

Thursday, May 13, 1954