Economic scene far from bright, MPs to be told

A green paper on foreign policy questions to be tabled in the Commons today paints a gloomy picture of Canadian economic prospects, and suggests that Canadian power and influence in the world have declined in recent years.

Faced with a declining share of the world’s trade and the stripping away of Canada’s traditional competitive advantage in natural resources, the paper looks to some form of special trading relationship with the United States as a solution.

The paper, which outlines the scope for a parliamentary review of Canadian foreign policy, flirts with the notion of free trade and with a bilateral framework agreement that could cover special trade arrangements in selected sectors, but contains no recommended proposals.

Although it outlines in some detail the difficult environment facing Canadian exports and stresses the weakness of Canadian competitiveness, the paper deals with most of the central foreign policy issues by posing questions which the Government hopes will prompt a national dialogue as they are dealt with by a special joint committee of senators and members of Parliament.

The paper catalogues all of the traditional trade-offs on collective security and defence, on peace-keeping and disarmament and on foreign aid and economic development. But its central preoccupation is with trade, which accounts for about 30 per cent of Canada’s gross national product – a percentage second only to that of West Germany – and thus has an immense impact on jobs and prosperity.

In share of the world market, Canada has fallen from fourth to eighth place among leading traders and, in particular, is losing out on the share of manufactured exports, a sector which produces the most jobs.

In the one area where Canada has been doing better, in the U.S. market spurred on by a 75-cent dollar, there are concerns about rising protectionism in Washington.

While the paper points to the benefits that might come from better Canadian access to the large U.S. market, it puts much less emphasis on what might happen to Canadian industries when exposed to tougher American competition.

The paper also questions the current policy of protecting Canadian textiles, footwear, clothing, automobiles and agriculture against full competition, but again throws the question out for public response.

Declines in Canada’s international competitiveness and in Canadian defence efforts are cited as two reasons for a parallel fall in Canadian capacity to influence international security and political affairs. ”n recent years, allies have sensed less active Canadian participation in international political institutions.” The paper promises Canada will be a ”ood global citizen” determined to play a more upbeat role at the United Nations, in the Commonwealth and the association of French-speaking nations and other international bodies and in promoting development in the Third World.

Canada’s membership in NATO is not open to question, but the paper does question whether the country can or should try to maintain all of the roles assigned to it and sees some trade-off between an expensive presence in Europe and paying more attention to the assertion of sovereignty and control in North America and on the North Atlantic.

While it is acknowledged that the green paper is not a traditional policy document, its vagueness is defended on grounds that it is merely supposed to be a vehicle for attracting the Canadian public’s view on foreign policy questions.

The paper stresses that some decisions, like Canada’s participation in Star Wars research, will have to be made before the results of the policy review are assembled, ”ut the review will be invaluable to the Government in shaping future policy. “

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