& The Canadian - American auto trade pact, after being in effect for 16 months, finally came up for approval in Par- liament on May 5. Thus, fully ratified, it now floats like an iceberg on the troubled waters of the North American econ- omy. The auto pact is a complex arrangement in the sense of its effect on the development of the auto industry and thereby its impact on the na- tional economy as a whole. Moreover, the principles of “continentalism” manifest in the pact, by their very nature will have a basic influence on the long-term political and economic destiny of Canada. The auto industry, because of its gigantic size, is a deci- Sive factor in the American economy. The industry con- sumes 20 percent of all the steel produced in the United States, 60 percent of all rub- ber, 14 percent of all nickel 14 percent of all aluminium, 13 percent of copper produc- . tion and 35 percent of zinc. Almost half the radios pro- duced in the U.S. go into new Cars, A clear indication of the preeminence of the auto in- dustry was given last week when an announcement of a production cutback by Gene- ral Motors set the stock mar- ket plunging. In fact a full two days before the GM an- houncement prices on the The auto pact: whole exchange began to de- cline when the auto manufac- turers released figures show- ing a slackening tempo of car sales in the month of April. The provisions in the auto pact for the free movement of parts and complete vehi- cles across the border: place the Canadian industry imme- diately and completely at the mercy of any economic fluc- tuations in the U.S. Speaking on this point in the House, Reid Scott (NDP, Danforth) stated: “. . . from now on when Washington hiccups, Ottawa will tremble in the automobile business.” The hiccups have begun with the slackening of car sales in April. This weakness in the market, combined with the over-extension of the American economy which has already resulted in the mone- tary squeeze play, is bound to adversely affect our econ- omy. Another side of the general economic softness in the U.S, was reflected in the comments of one broker who discounted the influence of the GM an- nouncement on the market sell-off. He said: ”Investors didn’t figure it means trouble for the auto industry. But it came when a lot of them were a bit jittery over the whole economic and monetary out- look.” Hardly a reassuring com- By Rae Murphy — ment, but it follows a pattern which indicates that by em- barking on a policy of “con- tinentalism,” such as the auto pact, we are tying our row- boat to the Titanic. Even in its short term ef- fects, the auto pact-seems to make little economic sense. It has been boasted in Parlia- ment and elsewhere that the pact has resulted in a greater number of jobs for Canadian workers. C. M. Drury, minister of in- dustry, stated in the House that the pact had increased employment in the industry by 10,500 and has resulted in plans for 69 new plants plus the announced plans for plant Who needs it? expansion in 136 cases. How much of this increase is due to the general upsurge of the industry over the past few years, or to the cheap expan- sion loans provided by the federal government, and a whole host of other factors at play in the industry, is hard to reckon. However, if there is any truth in the statement of Sen. Russell Long of Louis- iana to the effect that for every job created in Canada 12 are created “in the U‘S., even during the boom of the ‘last year we were being short changed. In the crucial area. of our balance of payments, the auto pact has driven us further into debt to the U.S. In Nov- ember 1965, the latest month for which detailed figures are available, Canada exported cars and parts worth about $21 million, while our auto- motive imports amounted to $94 million. This compares with $59.8 million the pre- vious November. To quote the Financial Times: “. . . the U.S. still seems to be getting the better of the automobile deal.” It has been made to appear that those who have spoken up against the auto pact are opposed to rationalization and industrial efficiency. This ar- gument evades the key ques- tion of who is to benefit through rationalization and efficiency. -toworker is concerned, he is - the world, is now further ~ away from producing a 100 The pact has no doubt bene- fitted the “big 3” auto manu- facturers, and has increased — their commanding position in the industry. A tight squeeze has been placed on the small- er supplier driving some, like Lake Simcoe Industries at Beaverton, Ontario, and others against the wall. As far as the Canadian au- still not within hailing dis- tance of. his American brother and from the stated position of the employers, they shall see him in hell before he is. For the Canadian consumer the purchase price for a car in Canada is still several hun- dred dollars higher than in the U.S., but progress has been made. The average model is about $2 cheaper now than it was before the agreement, which buys about One car wash. Canada, which contains the second largest car market in percent Canadian car than it was before Col. McLaughlan | moved to Oshawa and made ~ his deal with Buick. Thus we have the mixed results of 16 months exper- ience with the now ratified auto pact, which have covered the period of an unpreceden- ted auto boom, and now “hic- | cups.” God help us when the market belches down south. Strength and weakness ORMER Finance Minister Walter Gordon’s new book, A Choice for Canada, has Served to point up the satellite Status of Canada vis-a-vis the U.S. It has already drawn fire from the monopoly press. The Toronto Globe and Mail, which Incidentally only the day before lauded Finance Minister Mitchell Sharp's program for limited sov- ereignty for Canada, attacked Gordon’s position editorially as Design for Disaster.” A recent congressional probe launched by the United States Senate anti-trust and monopoly Subcommittee has been reported as Carrying greater implications for Canada than for any other nation, because of the extent of U.S. control in Canada. This con- trol by U.S. monopoly capital far exceeds similiar investment and control in any other indus- trialized nation, Richard J. Barber, special Counsel to the subcommittee, has Written a recently published arti- cle which states: “For sometime, Without recognizing it fully, we ave been living in an era of €conomic internationalism in Which global corporations, most LABOR SCENE by BRUCE MAGNUSON often born in America, are com- ing to dominate the world eco- nomy, must as they do the do- mestic U.S. and other national economies.” = Through mergers and over- seas investments, huge supra- national companies aim to gain control of world markets and strive to eliminate price compe- tition in the sale of manufactur- ed goods. This monopoly policy has its logical repercussions. The U.S. government has re- cently warned business that pro- fits might be getting too high for the health of the economy. Gor- don Ackley, chairman of the U.S. president’s Council of Eco- nomic Advisers, has told the U.S. Chamber of Commerce that, “earning figures make it clear that, on the average, the margin over costs has been advancing. Either prices have been raised more than costs, or prices have not been reduced where costs have fallen.” Mr. Ackley also asked if anyone can imagine “that labor will continue to show moderation in its wage demands when prices and profit margins are. continually rising.?” * * * The above bears out the basic in CLC position. soundess of the economic policy statement adopted at the Winni- peg convention of the Canadian Labor Congress, which warned the federal government of Can- ada that the CLC and its unions would not heed pleas for wage restraints in the present econo- mic conditions. The CLC sharply condemned a system of income distribution “which leaves, by any measure, at least a fifth of our popula- tion living below a standard of comfort and decency. An envir- onment of economic expansion is well suited to tackling the problems of income distribution, but we see no evidence of a planned and meaningful effort to do so on the part of the govern- ment.” .Many delegates in private con- versation expressed pleasures at the CLC position against wage restraint and for a policy of eco- nomic planning for growth; in- cluding extended nationalization, development of the public sec- tor, and a curb on private mono- poly control. The CLC conven- tion asked the government to take over the Canadian Pacific Railway, with provision for the — protection of service rights of May 20, 1966—PACIFIC TRIBUNE—Page all employees; also the Bell T phone, pipelines and other pub utilities.) S = With great wage battles ting under way this summer a1 fall in many basic industries, need to promote greater so darity between various un has become an urgent neces: The idea of promoting commit tees of mutual aid, involving al organized workers in a gi locality, and even on a bi scale, is a good one and s be implemented in practice. s * x * The CLC convention took generally good position on in national affairs. But it failed come to grips with the ques’ of how to involve the union movement in action peace and independence. | This is a serious Since without peace eve else will be of no avail, without independence others decide conditions under we are to live. Here, it seems me, is an area that needs mo attention by all trade unica across Canada today if interests are to be properl vanced and protected.