Free-traders losing sway with Tories

Widespread calls for caution and protection have dampened the Conservative Government’s enthusiasm for a dramatic trade deal that would sweep away all or most of the remaining trade barriers with the United States.

Backers of free trade with the United States and of a more open international trading system took a beating at the weekend’s economic summit conference. Even Industry Minister Sinclair Stevens declared that free trade is not even on the Government’s agenda.

Mr. Stevens, known for his strong views in favor of letting the free market have its way with the economy, also took an unexpected swipe at Canada’s other trading partners when he said the Government is willing to take even more measures to protect Canadian jobs against low-cost foreign imports.

He told a workshop on Friday that industries that provide many jobs and that are endangered by foreign competition should be given long-term protection that goes beyond the quotas already used. ”hen you hear of the plant closures and the hardship as far as employees are concerned . . . isn’t it reasonable to say, is there not some portion of the Canadian market that we feel we can, in effect, give or guarantee to the textile and apparel people, to the footwear people, to those that are in industries that may be under severe competition?” The textile, clothing and footwear industries have complained for years that quotas have not been good enough to stop imports from cutting away at their share of the Canadian market.

Mr. Stevens said he still does not like the idea of propping up companies with grants, but that the Conservatives are prepared to sit down with troubled industries, look at their prospects for the next five to 15 years and guarantee them a share of the market for long enough to let them finance new investments in plant and machinery.

Only a handful of comments opposed trade restrictions. Robert Blair, president of Nova Corp., said the petrochemical industry ”eeds free trade as much as you do not need it.” He was a lonely voice among a chorus of union representatives and companies demanding more protection, all arguing that Canada cannot afford to be a boy scout in a world of bike gangs. ”e’re the only ones playing by fair trade rules,” said David Patterson, a district director of the United Steelworkers of America and vice-president of the Canadian Labor Congress.

Paul Soubry, president of Versatile Farm Equipment Co. Ltd. of Winnipeg, said Canada has to get tougher in trade talks. If major markets such as the European Economic Community cannot be persuaded to open, he said, Canada may have to close its doors in reply.

Even Peter Gordon, chairman of Stelco Inc., a company that has already faced problems with U.S. trade restrictions, said Canada must be forceful in dealing with imports. ”e can talk about fair trade as much as we like, but, internationally, there is no such thing.” Mr. Stevens appeared to accept even the idea that Canada does not have to worry that trading partners might retaliate by imposing their own restrictions on Canadian exports.

That was a bit galling to Mr. Blair, who said the free-traders in the workshop had not realized the last half-hour would be taken up by replies from Cabinet ministers: ”here was an awful lot of rebuttal still to come.” They did get a few more words in during the plenary session on Saturday, when the talk turned to trade with the United States. Harold Milavsky, president of Trizec Corp. Ltd., said the mood on both sides of the border is right for a new deal. ” think there is a window of opportunity here that we should be taking advantage of.” The predominant mood at the conference was, however, one of caution. Jean-Paul Gourdeau, president of the SNC Group and chairman of the Canadian Exporters Association, said he supports a framework agreement that would help to give Canadians better access to the U.S. market, but he added that Canada would have to develop ways of easing the transition for Canadian companies that might face more competition from U.S. companies. ”anada has much to lose,” Mr. Gordon of Stelco said, and it must be careful not to pass the point where economic co-operation ends and political subservience begins.

Deep rift between business, labor revealed as economic talks begin

Although Prime Minister Brian Mulroney began his national economic conference experiment with a plea for consensus, the first full day of discussions served more to demonstrate the deep divisions among government, business and labor.

The conference, the first attempt to bring together such a diverse group – 136 people invited from all sectors of Canadian society – is a crucial part of the Prime Minister’s strategy to implement his promise to broaden decision making in Ottawa.

While Mr. Mulroney and his advisors recognize the political risks of trying to negotiate in the full glare of national television, they are hoping the national airing of many viewpoints will prepare the ground for a tough budget in late May.

Finance Minister Wilson underlined his preoccupation with the national debt by announcing in yesterday’s keynote address to the weekend conference that he expects the deficit for the coming fiscal year to be higher than the $34.5- billion he predicted in his economic statement last fall.

The Finance Minister reiterated his commitment to cutting the deficit, mainly by reducing government spending. ”f government spending and borrowing were the way to achieve prosperity, we would have gotten there long ago,” he said. ”en years of stimulation and deficits have not solved our problems. They have stimulated only a mountain of government debt . . . which is now growing twice as fast as the economy.” That message won a speedy endorsement from businessmen, but almost no one else.

Rowland Frazee, chairman of the Business Council on National Issues, urged the Government to chop at least $5- billion from the deficit next year.

But the Government’s emphasis on the deficit was quickly attacked by Canadian Labor Congress president Dennis McDermott, who said the CLC represents ”he people who have been hurt the most.” Taking up Mr. Mulroney’s request to be candid, Mr. McDermott took a swipe at business groups for speaking with several voices while representing the same interests. “Business wears several hats from the anachronistic extremism of the Canadian Federation of Independent Business to the carefully crafted slick and sophisiticated approach of the Business Council on National issues. . . . Which entity are we dealing with – Dr. Jekyll or Mr. Hyde?” Labor representatives said the emphasis should be on job creation and full employment. Their emphasis on people rather than numbers was endorsed by other delegates, ranging from Emmett Cardinal Carter to Chaviva Hosek of the National Action Committee of the Status of Women.

The Prime Minister took great pains to be civil to the labor spokesmen – “We view the labor movement as an indispensible part of national growth”he said at one point. But it was clear that the union leaders were not interested in the consensus Mr. Mulroney and Mr. Wilson said they were seeking. “The preoccupation should not be with the deficit, it has to be with job creation,”said Robert White, Canadian director of the United Auto Workers, who added that an assault on the deficit will inevitably throw more Canadians out of work.

Mr. White’s jousting with Mr. Mulroney and some of the business spokesmen produced some of the few lively moments of the day. In a session on retraining, Mr. White said the Government has to work with all the players in each sector of the economy to develop ways of coping with the dislocation caused by technological change. “The Government really has a major role to play. You can’t on the one hand talk about getting the government off our backs and on the other hand talk about technology and training,”Mr. White said, adding that business leaders were “absolutely not correct”in saying Canadian industry is unproductive and that unions oppose technological change.

Mr. McDermott told reporters that business and the Tories “are being hypocritical if they expect everybody else to join in their anthem.”He said he came to the conference because Louis Laberge, president of the Quebec Federation of Labor, who has been criticized in labor circles for his chumminess with the Prime Minister, was more conciliatory in his approach than other union leaders. He said afterward that “Mr. Mulroney has done a wonderful job finding out what people want. . . . I’ve been seduced by the open mind of Mr. Mulroney.” There was more of a consensus among businessmen, especially when it came to their admiration for U.S. economic policies.

John Bulloch, president of the Canadian Federation of Independent Business, argued that Canada should follow the lead of the United States in loosening controls on business rather than adopting the interventionist style common in Europe, where ”t’s easier to get a divorce than fire an employee.” He said the United States created more jobs last year than all Europe in the past 10 years. ”e have to compete with the Americans or slide into oblivion.” Edward Newall, chairman of Du Pont Canada Inc., praised the Prime Minister for his meeting earlier in the week with President Ronald Reagan and said lower trade barriers would be ”he single biggest step you can take to create new jobs.” Exports account for 3 million jobs in Canada, he said, and if Canada’s share of world trade had not dipped from 5 per cent to 3 per cent in recent years, ”e’d have no unemployment.”

Despite Mr. Mulroney’s efforts to stimulate a more lively debate, few of the presentations went beyond standard prepared speeches, provoking an angry response from Madeleine Delaney-Leblanc, head of the New Brunswick advisory council on the status of women. “I got somewhat the feeling that I was attending a long list of monologues falling on deaf ears,”she complained to the conference, adding that the concerns of women were being buried in all the talk of abstract economic issues. “I would have liked to have heard some new things.”

Unemployed Montrealer Andre Marcoux, 23, gave an emotional speech about the plight of the jobless and their despair at having no security. “I feel I’m in a straitjacket. . . . We’ve been asked to sacrifice ourselves for many years now.” Mr. Marcoux, who has been living on unemployment insurance payments of $118 a week since October, said he was invited to the conference at Government expense because he was known through volunteer work he had been doing in community radio programming. He said he did not know by the end of the first day if the conference would produce concrete results. ”’m here, ” he said of his own role, ”ut there’s a million (unemployed) people who could be here.” Ms Hosek warned that a lower federal deficit andfree trade with the United States would hurt women more than men. She said the highest-paying jobs for women are in the public sector and that women – predominantly immigrants – constitute most of the work force in industries such as textiles and footwear, which are vulnerable to free trade. ”he women’s economy is not the same as that of men,” she said.