Canadian market is relatively small, production runs have been short, and costs and prices have been high. High costs and prices, in turnsupported by the tariff and other restrictions-have contributed to keeping the market small. Historically, Canada's share in North American automotive production has lagged far behind her share in automotive purchases. In 1963, in an attempt to increase its share of the North American market, the Canadian Government put into effect a plan, involving the remission of tariffs, which was designed to stimulate automotive exports. A number of United States manufacturers, believing they would be injured by the plan, called upon this Government to impose countervailing duties. In all probability, such action would have invited retaliation. We were faced by the prospect of a wasteful contest of stroke and counterstroke, harmful to both Canada and the United States, and helpful to neither. Our broader good relations with our Canadian friends would have suffered serious strain. To avoid such a dismal outcome, our two governments bent every effort to find a rational solution to the problems of a divided industry. The Automotive Products Agreement that the Prime Minister and I signed in January is the result of our joint labors. The agreement will benefit both countries. We will have avoided a serious commercial conflict. Canada will have achieved her objective of increasing her automotive production. United States manufacturers will be able to plan their production to make most efficient use of their plants, whether in Canada or the United States. They will save the price of the tariff, and, over the longer run, we will benefit from the faster growth in the Canadian market which lower prices will make possible. The Agreement has already brought results. The Canadian Government revoked its controversial plan and, on January 18, reduced all relevant duties to zero. I am in formed that the Canadian Parliament will be asked to give its approval in the near future. We recognize, of course, that full integration of the North American automobile industry cannot be brought about all at once. To allow time for adjustment, the Canadian sector of the industry-less than 1/20 the size of ours-will operate initially under special arrangements. The Agreement itself will be subject to comprehensive review no later than January 1, 1968. We should then be in a position to judge what further steps are necessary. In signing the Agreement, I pledged myself to ask the Congress to authorize the President to remove all United States duties on Canadian automobiles and parts for original equipment. I am today sending to the Congress draft legislation which would give the President that authority. The proposed legislation would also authorize the President to make similar automotive agreements with other countries, and to make agreements leading to mutually beneficial reduction of duties on replacement parts. I repeat: In my judgment, the Agreement will benefit both Canada and the United States, and the automotive industry and automotive workers in both countries. However, we recognize that adjustments in an industry of such size could result in temporary dislocation for particular firms and their workers. To provide appropriate relief, the Bill I propose will make applicable the adjustment assistance of Title III of the Trade Expansion Act of 1962. The tariff change contemplated in the automotive agreement, is, however, a special case. Tariffs will be cut to zero, all at one time. Furthermore, dislocation, if it should occur, may well be due as much to the decrease in exports of certain products as to an increase in imports. Therefore, this Bill calls for special procedures for obtaining adjustment assistance. These special procedures will be limited in ap 876 Stat. 883. V The Importance of Consultation VI Toward a More Effective Partnership VII SOME GUIDING PRINCIPLES 77. From the foregoing analysis we conclude that it is feasible to formulate certain guiding principles. These we set out in the following paragraphs. 78. The need is clear for our two governments to confirm the practice of intimate, timely and continuing consultation on all matters of common concern, at the appropriate level, employing such machinery and procedures as are most effective for this purpose. 79. As partners in NATO, and sharing responsibility for the air defense of this continent, Canada and the United States have similar policies and share important common obligations. In the conduct and development of their unique bilateral relationship, however, the two countries must have regard for the wider responsibilities and interests of each in the world and their obligations under various treaties and other arrangements to which each is party. 80. This principle has a particular bearing upon our affairs in relation to the heavy responsibilities borne by the United States, generally as the leader of the free world and specifically under its network of mutual defense treaties around the globe. It is important and reasonable that Canadian authorities should have careful regard for the United States Government's position in this world context and, in the absence of special Canadian interests or obligations, avoid, so far as possible, public disagreement especially upon critical issues. This is not to say that the Canadian Government should automatically and uniformly concur in foreign policy decisions taken by the United States Government. Different estimates of efficacy and appropriateness or degree of risk generate honest differences of opinion among the closest allies. The Canadian Government cannot renounce its right to independent judgment and decision in the "vast external realm." On its part, Canada has special relations and obligations, some of which the United States does not share but of which it should take account, in particular with Great Britain and the other states of the Commonwealth, with France, and with certain other nations. 81. It is in the abiding interest of both countries that, wherever possible, divergent views between the two governments should be expressed and if possible resolved in private, through diplomatic channels. Only a firm mutual resolve and the necessary practical arrangements to keep the totality of the relationship in good and friendly working order can enable our countries to avoid needless frictions and minimize the consequences of disagreement. 82. It is hardly necessary to add that, in these remarks concerning public statements by government spokesmen, we intend of course no reference to all those whose freedom to criticize official policies at home and abroad is clear and equally cherished in both countries. 83. There should be a conscious effort by the authorities on both sides to accept and extend a common approach to additional areas of the two economies where it can be demonstrated that joint undertakings are to the national advantage of each as well as to the common advantage of both. 84. There is another important principle. This is that the United States should be continuously alert, throughout the entire process of policy-formulation and decisionmaking, to the potential impact on Canada of United States' actions, especially in the economic area. By this we intend particularly commercial policy-tariffs and quantitative restrictions and fiscal and monetary affairs. While the necessity for such constant alertness derives primarily from the economic inequality of the two countries, coupled with their close interconnection, it derives also from the different characteristics of the two economies. Decisions taken in this area by the United States can have a disproportionately heavy incidence upon Canada. This vulnerability to United States economic policies is increased by the persistent Canadian deficit on trading account with the United States and the fact that Canada is far more dependent on exports-16 percent of GNP as compared with 4 percent for the United States. Obviously the United States cannot renounce concern for the protection of its own economic interests, but it should maintain a conscious awareness of Canadian interests to ensure that they are not violated or prejudiced through inadvertence or ig norance. 85. Since Canadian actions and decisions can also seriously harm the United States, there should be a sense of reciprocal obligation on Canadian authorities to give consideration in advance to the potential impact on United States' interests of decisions and actions contemplated in the economic and financial fields. 86. In conclusion, we find the evidence overwhelmingly in favor of a specific regime of consultation between the two governments. We are also convinced that there are large opportunities for mutual advantage in the extension of the partnership of our two countries. Not only is the relationship unique but CanadianAmerican mutual involvement and interdependence grow daily more evident. For our part, we are satisfied that the process can be as mutually rewarding as it is inevitable. LIVINGSTON T. MERCHANT A. D. P. HEENEY ANNEX A Terms of Reference ANNEX B Report to the April Meeting of the Joint United States-Canadian Committee on Trade and Economic Affairs, April 30, 1964 11 11 For the Joint Communiqué issued at the end of this meeting see American Foreign Policy: Current Documents, 1964, pp. 439-441. motive products covered by the agreement. Thus we have ended a controversy that threatened to endanger our automotive trade with Canada, a trade that last year ran over one-half billion dollars in our favor. We have assured continuation of over 25,000 jobs for American workers directly involved in producing the automotive goods we sell to Canada and as many more for those who work in the steel, textile, electrical, rubber, and other supporting industries. I am confident that as production and trade expand under the encouragement of the U.S.-Canadian agreement, both our countries will benefit. These benefits will be felt by the automobile industry, our independent parts manufacturers, the employees of the automotive industry, and by our country as a whole. These benefits have, in fact, already begun to appear. During the first half of this year our trade both ways with Canada in automobiles, trucks, buses, and automotive parts rose nearly $120 million-over 30 percent over last year's trade for the same period. Of this amount $81 million was increased sales of parts and vehicles by the United States to Canada. During this same period total employment in the automotive industry in the United States increased by more than 45,000 workers, and many of these new jobs resulted from our increased trade with Canada. Meantime, employment and production in Canada's automobile industry have also increased, and Canadian citizens have already begun to benefit from lowered prices on automobiles. Most important, as I said on the occasion of signing the agreement, when it appeared that our two countries were on the verge of grave differences in our mutual trade, we chose instead the road to understanding instead of the road to conflict. Our ties with Canada are historically close, our relations cordial, our people durable friends. This agreement, originating in our common interest, arrived at for our common benefit, will make those ties even closer and more fruitful for the future. Second Statement: 15 I am issuing a proclamation 15 exercising the authority given me by the act to remove United States duties on automotive products covered by our agreement with Canada. The provisions of the proclamation relating to duties will become effective after 60 days. The removal of United States duties will then be retroactive to January 18, 1965, the date Canada removed its duties on United States automotive products. H.R. 9042 also enacts special provisions for determining eligibility for the adjustment assistance already provided by the Trade Expansion Act, if there should be instances in which firms or workers suffer dislocation as a result of the agreement. These new eligibility provisions assure that there will be prompt assistance to individual firms or workers who may be temporarily affected E. Antarctica Document X-74 Statement Made by the President (Johnson), May 1, 19651 "The Kind of International I have been deeply impressed by the sensible way in which the 12 nations active in Antarctica work together. In that frozen continent we have, through international cooperation, shown how nations of 15 Proclamation 3682, 30 Fed. Reg. 13683; also Department of State Bulletin, Nov. 15, 1965, pp. 794-795. 16 See footnote 8 to doc. X-70, ante. 1: Executive Order 11254, 30 Fed. Reg. 13569; also Department of State Bulletin, Nov. 15, 1965, p. 795. 18 TIAS 5912; 16 UST 1789; see also Department of State Bulletin, Jan. 17, 1966, pp. 106-109. many different outlooks can cooperate for peaceful purposes and mutual benefit. National differences are no barrier to a common effort in which everyone gains and no one loses. The scientific findings of all countries are pooled for the benefit of all. Men in danger or in need can call for help knowing that it will be given unstintingly by any country that can provide it. We are now celebrating International Cooperation Year. It is my earnest hope that the same success that has marked the Antarctic program can be extended to every field of international endeavor, not only 1 Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1965, vol. I, pp. 468–469. The President had just received the first report of the Antarctic Policy Group. This group was established Apr. 10 by Acting Secretary of State Ball. The members were the Assistant Secretary of State for International Organization Affairs (Cleveland), the Director of the National Science Foundation (Haworth), and the Assistant Secretary of Defense for International Security Affairs (McNaughton). The report was made orally. |