The Hemisphere: Trade with Britain

When Prime Minister John Diefenbaker proposed last July that Canada trim its trade deficit with the U.S. by diverting 15% of its trade from the U.S. to the United Kingdom, he unintentionally put Britain’s Tory leadership on the spot. The Empire-thumping wing of the British Tories, which strongly opposes London’s tentative plan to join the European Free Trade Area, pounced on Diefenbaker’s suggestion as opening up a practical alternative, even though Diefenbaker gave no real inkling on how the Canadians proposed to implement the shift. Last week Britain’s Chancellor of the Exchequer Peter Thorneycroft suavely handed John Diefenbaker notice to put up or shut up. Britain, said he at a meeting of Commonwealth Finance Ministers at Mont Tremblant, Que., considered that “the most adventurous way” to increase British-Canadian trade would be to wipe out all tariffs.

Caught cold by this counterstroke, Canada’s Finance Minister Donald Fleming could only cite the “formidable difficulties” in the way of Thorneycroft’s plan. Spokesmen for Canada’s automobile, textile and electrical-appliance industries quickly and hotly seconded him. Fleming thereupon hastened to spell out far more specifically than ever before what his government had in mind in making the original proposal for a 15% shift. Canada, he said, would switch all possible government purchasing from the U.S. to the U.K., would send a high-level trade delegation to Britain, and would consider lowering barriers against purchases in Britain by Canadian tourists. For his part, Thorneycroft soothingly took the steam out of his free-trade proposal by describing it as such a long-term project, i.e., twelve to 15 years, that he expected no official Canadian reply.