In investigating the integration of the Canadian and American economies after World War II, most writers have focused on the influence of the American multinational corporations and on the activities of the American government. Little attention has been paid to the important role of the Canadian government in furthering this process and to the significance of trade and trade policy. This thesis examines the evolution of Canadian trade policy between 1945 and 1953. The main sources for this study are the private papers of government ministers and the files of Canadian government departments. Since there have been no major studies of the development of trade policy in this period, a chronological structure has been employed for the analysis. Post-war Canadian trade policy can be divided into two periods. During the first period, 1945 to 1947, the government attempted to re-establish the pre-war pattern of multilateral trade. The means employed to attain this goal —the introduction of a free market system in international trade—represented a significant departure from traditional Canadian trade policy. The traditional policy is outlined in chapter one, and in chapter two the economic, political, and ideological factors underlying the new policy are examined. However, the foreign exchange crisis of 1947, examined in chapter three, produced a rapid retreat from the policy of multilateralism based on free-market trading. The government, seeking a solid base for Canadian trade to promote economic development, turned to a system of bilateral, regulated trade with the United States. Continental economic integration became a key element of trade policy. The development of this policy and the crucial ties between trade policy and defence are explored in the final chapter. / Arts, Faculty of / History, Department of / Graduate

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Canada has historically been both attracted to and suspicious of the United States. While closer relations have promised greater economic benefits, Canadians have long been wary of the influence wielded by Americans by virtue of their size and power, as well as a crusading sense of nationalism. Hence free trade, while economically attractive, has been rejected on no less than five occasions in Canadian history. However, despite the emphasis placed on autonomy by nationalists, Canada has from its very inception drawn closer to its only neighbour. Trade with the Americans steadily displaced British trade, a trend accelerated by the Second World War. The war brought Ottawa and Washington into particularly close cooperation, and the emergence of the United States as the leader of the Western alliance in 1945 further solidified their relationship. NATO and NORAD went a good distance toward integrating continental defence, while bilateral trade mounted, boosted further by the signing of the Auto Pact in 1965. Yet, even in the face of such cooperation, the nationalist impulse in Canadian politics has remained strong. Diefenbaker's pledge to divert 15 per cent of Canada's trade with the United States to Great Britain echoed Canadian concerns about their dependence on the U.S. and was clearly antagonistic to American interests, as were the string of highly nationalistic policies enacted under Trudeau. Autonomy has become more difficult to achieve, however. The global economy has become increasingly competitive, while the post-1945 liberal trading order no longer seems capable of ensuring open world markets. The relative decline of the United States evident since the mid-1960s, combined with the rising importance of regional trade blocs and the economic success of Japan and the NICs, acted to undermine the liberal trade regime established in the wake of World War II. No longer willing to trade off economic gains for security goals, Washington, beginning with the "Nixon shocks" of 1972-73, turned to protectionism. Trade issues became crucial to the formulation of foreign policy, while states became increasingly vulnerable to the actions and policies pursued by others. The rising importance of trade to virtually all countries, due in large part to the post-war liberal trade regime, thus led to an increasing politicization of trade issues. The declining utility of force as an effective tool of foreign policy, given by the development of nuclear weapons and the ineffectiveness of conventional weapons demonstrated in Vietnam and Afghanistan, has heightened further the importance of economic issues. The traditional distinction between the "high politics" of security considerations and the "low politics" of economic issues has, for many states, been erased. Increasingly states are faced with trade-offs between security and economic values. This increased concern with economic values is evident in Canada's decision to pursue free trade with the United States. The sacrifices entailed in a nationalist political course have become more expensive both because of the rise of protectionism in the United States, and further because the intrinsic value of national economic performance has risen The trade-off between autonomy and wealth long recognized in Canadian politics remains, yet the value of affluence has increased. Indeed, Canadian nationalism has come to be defined increasingly in terms of Canadian performance in the world economy. / Arts, Faculty of / Political Science, Department of / Graduate

The purpose of this study is, first, to describe the Canadian government's policy for the domestic footwear industry during the 1970-1985 period, and second, to account for the forces that shaped it. The analysis is conducted within an "organizational" framework, which is based on the approach developed by Peter Hall. The framework postulates that the relationships within and among state, societal, and international political-economic institutions are the key determinants of economic policy. The study argues that it is the conflicts within and among the state, manufacturing interests (business and labour in the footwear industry, and those in the supplying industries), and trading interests (importers and retailers dealing in footwear), conditioned by international political economy, that shaped the government's policy. It is concluded that the state and manufacturing interests formed internally united organizations and pursued well defined objectives. The state's objective was to assist the industry through high tariffs and financial aid for modernization. In contrast, the manufacturing interests' objective was to secure quotas on imports. While the two sides were internally united, neither were sufficiently strong to impose their objectives on the other. The international political economy favoured the use of tariffs and financial assistance. At the same time, circumstances arose -- resulting from economic recession, appreciation of the Canadian dollar, and the threat of Quebec separatism--that made it difficult for the state to resist the manufacturing interests' demands. In such circumstances, the industry succeeded, if only temporarily, in securing quotas in addition to tariffs and financial assistance. The trading interests were somewhat divided among themselves, which restricted their capacity to participate effectively in the policy process. Their positions were relevant only to the extent they could be selectively used by the state to resist the manufacturing interests' demands. A theme of major theoretical significance that emerges from this study is the importance of international political economy in the making of domestic policies. The second theoretical implication of the study is the need to view the state and societal actors in a policy process not just as players, but also as structures. They form an organized relationship, both within and in relation to each other, which facilitates the pursuit of some objectives and impedes the accomplishment of others. / Arts, Faculty of / Political Science, Department of / Graduate

From early colonial times the Canadian economy, highly dependent on exports, has developed a pluralist economic system in a generally congenial international environment. Since 1970 however, the Canadian economy has been challenged, albeit at the margins, by unfamiliar impacts largely originating in the Pacific economy. The institutional reactions of relevant Canadian export interests - defined as the federal government, provincial governments and a small number of Canadian firms - have, on the whole, proved inadequate to these challenges. This inadequacy threatens Canadian domestic prosperity and constrains economic and political options internationally. This study hypothesizes that an adequate response to these new challenges depends on institutional adaptation within and among Canadian export interests. Six principles are advanced to promote this adaptation: 1. the priority of economic considerations; 2. the legitimate role of government; 3. full provincial participation; 4. coordination by the national government; 5. an authoritative voice for each interest; 6. better sharing and use of information. The six principles are applied in three case studies. The first concerns the international marketing challenge posed by the Japanese general trading company (soga shosha), and the Canadian government's initiative to create a Canadian trading corporation. The application of the six principles suggests an alternative proposal, the Canadian Commercial Centre, in which Canadian export interests develop and share information in a way which recognizes the appropriate role of each and the obligation of all to attain a greater coherence. The second case study concerns the recent Western Liquid Natural Gas (WLNG) project which featured a new form of investment (the minority interest joint venture coupled with a long-term supply contract) in which a consortium of Japanese buyers represented by a Japanese general trading company sought to reach agreement with an uncoordinated collection of Canadian firms and governments. The lack of coherence among these Canadian interests was at least a contributing factor in the loss of an opportunity to expand and diversify Canadian LNG markets. The application of the six principles to the WLNG case yields an alternative Canadian approach involving the early establishment of a committee of authoritative officials from the relevant Canadian interests, and a new coordinating role for a federal agency like the (now disbanded) Ministry of State for Economic and Regional Development and the Federal Economic Development Coordinator. The final case study concerns the challenge to trade and investment represented by the movement to a Pacific economic community, notably the Pacific Economic Community concept (PECC). The current reactions of such institutions as the Canadian committee of the Pacific Basin Economic Council and the federal Department of External Affairs are assessed, leading to the recommendation that the Canadian government should involve a wider constituency of current and potential Canadian export interests in an educational policy process which may bear on Canada's future prosperity and political resilience. / Applied Science, Faculty of / Community and Regional Planning (SCARP), School of / Graduate