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Redalyc. Getting out from Under the Elephant

Redalyc. Getting out from Under the Elephant

Revista Mexicana de Estudios Canadienses (nueva época) Asociación Mexicana de Estudios sobre Canadá [email protected] ISSN (Versión impresa): 1405-8251 MÉXICO

2004 Lawrence Douglas Taylor Hansen GETTING OUT FROM UNDER THE ELEPHANT: AN ANALYSIS OF CANADIAN-U.S. RELATIONS DURING THE TRUDEAU PERIOD Revista Mexicana de Estudios Canadienses (nueva época), noviembre, número 008 Asociación Mexicana de Estudios sobre Canadá Culiacán, México pp. 59-77

Red de Revistas Científicas de América Latina y el Caribe, España y Portugal

Universidad Autónoma del Estado de México

http://redalyc.uaemex.mx GETTING OUT FROM UNDER THE ELEPHANT: AN ANALYSIS OF CANADIAN-U.S. RELATIONS DURING THE TRUDEAU PERIOD

Lawrence Douglas Taylor Hansen

Abstract The article deals with Canadian relations with the U.S. during the Trudeau period of government, from 1968 to 1984. It focuses on Trudeau’s efforts to alter ’s relationship with her powerful neighbor, particularly with regard to economic matters. It also considers the Trudeau government’s policy towards the U.S. in the light of the policies of previous governments, as well as Trudeau’s own personal views on and the . It concludes with an overall assessment as to the degree of success achieved by the Trudeau government’s efforts to chart a new and independent course for Canada.

59 INTRODUCTION

n March 25, 1969, during an official visit to Washington, Prime OMinister Pierre Elliott Trudeau, in an attempt to inject some humour into his address to the Washington National Press Club, made the comment which has since become famous: ‘‘Living next to you is in some ways like sleeping with an elephant. No matter how friendly and even-tempered is the beast, one is affected by every twitch and grunt’’ (Head and Trudeau,1995:179). The remark constituted a succinct summary of what Trudeau perceived to be Canada’s position or situation in relation to the country’s powerful southern neighbour. Beginning in the 1970’s, the Trudeau government attempted to steer the country away from the more pronounced international profile it had assumed during the previous administration under prime minister Lester B. Pearson. Not only were measures taken to substantially reduce Canada’s role in NATO defense and global peacekeeping, but the government also explored various options for reducing Canada’s economic and trade dependence on the U.S. REVISTA MEXICANA DE ESTUDIOS CANADIENSES

The objective of this paper is to analize relations between Canada and the U.S. during the Trudeau period of government (1968-1984). It examines the evolution of the government’s policy toward the U.S. in the light of the policies of previous administrations, as well as the prime minister’s own personal views on nationalism and relationships with the Americans. It focusses on the government’s attempts to alter Canada’s relationship with the U.S., particularly in the areas of economics and trade. It concludes with an assessment of the degree of success achieved by the Trudeau government in this regard, as well as its general impact on relations between the two countries.

THE TRANSITIONAL PERIOD UNDER DIEFENBAKER AND PEARSON

At the time John G. Diefenbaker assumed power as Prime Minister in June 1957, he was already deeply critical of what he perceived of as too strong a link between the Liberals and American investment, which amounted to approximately seventy six percent of all foreign investment in Canada. Like his predecessor as Popular Council of Canada (PCC) leader George Drew, Diefenbaker attempted to strengthen Canadian trade with Great Britain 60 and other Commonwealth countries, as part of an effort to counterbalance U.S. economic domination of the Canadian economy. Diefenbaker felt the U.S. was pushing Great Britain into the Common Market to get rid of British trade preferences for Commonwealth countries; as a result, the latter would be forced to seek closer economic and trade contacts with the U.S. Great Britain’s move toward the Common Market was temporarily halted by the De Gaulle government’s veto in late January 1963 (Robinson, 1989; Newmen, 1963; Nash, 1963). However, long before Diefenbaker assumed power, the U.S. had become Canada’s principal trading partner. Once De Gaulle was gone (1968), Great Britain reapplied to enter the European Economic Community (EEC) and was ultimatedly approved. In the meantime, the proportion of Canada’s trade with Great Britain was steadily declining, while that with the U.S. was continually increasing. During the 1960’s, with the maturing of the postwar generation, Canadian-British ties in general were on the wane (Granatstein and Bothwell, 1990: 159-160, 337-339) Diefenbaker got along fairly well with Eisenhower, who was well into his second term when the Conservatives came into power. The two respected each other and became close friends. Eisenhower was sensitive to GETTING OUT FROM UNDER THE ELEPHANT

Diefenbaker’s outlook and conciliatory in terms of resolving problems and disputes between the two countries. This establishment of a rapport between the two leaders was especially important to Diefenbaker, as he preferred a more personalized form of diplomacy (meeting with national leaders and other dignitaries of high standing) (Robinson, 1989: 118; Nash, 1963:54- 57, 62, 72). Like most Western heads of state of the period, Diefenbaker was anti- Communist. He also shared their concern about the apparent military threat that the and other communist countries posed for Canada. Given the fact that Canada stood astride the shortest air route between the U.S. and the Soviet Union, it lay in a strategically important area for war planners. It was believed necessary that Canada and the U.S. form a bilateral strategic defense organization to protect the U.S.’s vulnerable northern flank. It was due to this consideration that Diefenbaker precipitately signed the NORAD defense pact soon after taking office (Diefenbaker, 1976; Jockel, 1987: 3-4, 104-109). To a certain extent, the problems Diefenbaker had in dealing with the U.S. during this period derived from the advice of some of his key governmental advisors. Upon the sudden death of his for external affairs, Sidney Smith, he had appointed Howard Green, who 61 believed it vital to maintain the traditional ties with Great Britain and did not like the U.S. Green was apprehensive about U.S. military activities in Canada, especially in the north. He also favoured a ‘‘softer’’ approach in dealing with the Soviet bloc. He was also dedicated to promoting global disarmament and believed that ‘‘Canada’s main role in the world is to keep the big boys from rocking the boat’’. Green was seconded in this policy by his deputy minister, . Both men played a critical role in influencing Diefenbaker’s delaying tactics regarding the acquisition of nuclear weapons (Diefenbaker, 1976; Robinson, 1989; Nash,1963). Eisenhower’s successor as president, John F. Kennedy, adopted a much more aggressive stance against the Soviet bloc, which led to some of the most acute crises of the period. Diefenbaker and Kennedy found it difficult from the beginning to establish a personal rapport; in fact, the relationship steadily deteriorated over time. Diefenbaker’s main complaints about Kennedy as far as personal matters went lay in what he perceived to be personal slights and lack of respect on Kennedy’s part. As time went by, Diefenbaker also became bothered by Kennedy’s growing popularity with . The president, who did not have much knowledge of Canada, REVISTA MEXICANA DE ESTUDIOS CANADIENSES

or interest in its affairs, saw Diefenbaker as a stubborn, ‘‘boring’’ old fool and literally loathed him (Diefenbaker, 1976; Nash,1963). Kennedy felt more at ease with opposition leader Lester B. Pearson, whom he liked. Pearson had worked in Chicago as a young man and liked Americans; he had also played semi-professional baseball with the Maple Leafs of Guelph, , and was a devoted fan of the sport. He and Kennedy shared much the same outlook on world affairs. Kennedy would have preferred that Pearson had been prime minister during the initial period of his presidency. Even though Diefenbaker was prime minister, Kennedy met with Pearson in Washington on at least a couple of occasions to talk about foreign affairs issues. Although Pearson initially opposed nuclear arms for Canada, as opposition leader he soon reversed his opinion, which made him even more palatable for the White House as a possible alternative to Diefenbaker. The latter construed this as part of a plot to bring about his downfall.1 There were a number of additional irritants that made relations difficult during this period. Diefenbaker resisted U.S. efforts to have Canada join the Organization of American States (OAS) and the Alliance for Progress (AFP). Canada also carried on trade with communist and . 62 Diefenbaker objected to Canadian wheat being used as a weapon against the Chinese. He also opposed the U.S. tactic of attempting to isolate Cuba from the rest of the Western Hemisphere. ‘‘We are not convinced,’’ he told a joint meeting of Canadian Members of and U.S. congressmen in , ‘‘that isolation is the best method of enabling the Cuban people eventually to free themselves.’’2 Diefenbaker looked upon Kennedy as a brash young man who, with his government’s adoption of a more aggressive Cold War stance, might end up dragging Canada and the other North Treaty Organization (NATO) countries into a global conflict of disastrous proportions. He came to believe, especially after Kennedy’s visit to in May 1961, that the latter’s government meant to push and manipulate Canada as part of its global defense plans. Diefenbaker was further convinced of this after his staff discovered a memo left behind by Kennedy and his aides which was interpreted as having this meaning. There were also some penned scratches on paper which appeared to refer to Diefenbaker as an ‘‘S.O.B.’’.3 The Diefenbaker government cancelled the program for the new Canadian built C-130 Avro Arrow interceptor in the belief that advances in missile technology had rendered the warplane obsolete. Instead, it decided to GETTING OUT FROM UNDER THE ELEPHANT establish two squadrons of the U.S. Bomarc-B missiles at North Bay, Ontario, and La Macaza, . In the end, however, it chose not to take the nuclear warheads for the Bomarcs, requesting only that Canada be granted the option of having them in case of an actual Soviet aerial attack against North America. Diefenbaker believed that to accept the warheads would affect Canada’s sovereignty, since they would continue to be owned by the U.S. and under its control (Diefenbaker, 1976). To a certain extent, Diefenbaker sympathized with those groups in Canada who opposed the presence of nuclear arms on Canadian soil; nevertheless, he did not want to be perceived as not complying with Canada’s responsibilities for North American and NATO defence responsibilities (Robinson,1989; Nash, 1963: 136-137, 155,169). In a letter to his brother Elmer, Diefenbaker commented that ‘‘people not knowing the situation are loud in their opposition to Canada having any nuclear defence. It is an ostrich-like philosophy which while adhered to by many sensible people, is most beneficial to the Communists’’ (Nash, 1963: 138) This attempt to placate both sides only resulted in indecision, which ultimately led to the fall of the Diefenbaker government. The prime minister had not guaged the will of Canadians correctly on the question of nuclear arms. A Public Opinion News Service poll released on December 1, 1961, 63 revealed that roughly two thirds of Canadians were in favor of the acquisition of nuclear weapons. Other surveys conducted by Gallup, Sam Lubell and by the Canadian Peace Research Institute in 1962 confirmed this view (Diefenbaker, 1976; Nash, 1963: 142, 155, 207, 212, 225, 227, 296; Granatstein, 1996:132). From January 1962, Diefenbaker thought he had found a workable solution to the dilemma. His government suggested that the warheads be stored in the U.S. border areas and delivered quickly to Canada to arm the Bomarcs and the Royal Canadian Air Force (RCAF) Voodoo interceptors, which would remain on a standby notice in case of a war emergency. The Pentagon did not like this proposal since it would take time to transport the warheads (at least fifteen hours) and there would have to be a prior agreement with Canada to permit this. The U.S. government believed that the best solution to the dilemma consisted in a ‘‘joint control’’ arrangement, similar to that existing between the U.S. and Great Britain, in which the U.S. would launch the missiles from the North America Aerospace Defense (NORAD) control centre in Colorado Springs, but only after both governments had concurred in the decision (Nash, 1963:152-153). REVISTA MEXICANA DE ESTUDIOS CANADIENSES

Although the of October 1962 did not result in the nuclear holocaust that many feared would occur at the time, for many Canadians the episode had shown that the possession of missiles as a defensive and offensive weapon was essential for the maintenance of peace. Diefenbaker was a member of the minority who only began to become convinced once the crisis was over. It rankled him that Kennedy had not consulted with him personally during the emergency, but, by that time, the two were not on speaking terms. As a result, Diefenbaker did not immediately order Canada’s NORAD forces on a Defcon (Defensive Condition) 3 alert. Moreover, in a public speech to the House of Commons, he proposed on on-site inspection of Cuba by a (U.N.) team of neutrals, a motion which cast doubt on Kennedy’s assertion of what aerial spy plane photos had supposedly revealed. , Minister of Defense, bypassed the Prime Minister’s approval and ordered the alert. The sent units to cooperate with the U.S. navy in patrol operations in the North Atlantic, while the RCAF sent airplanes to bases in the southern U.S (Kennedy, 1969: 52; Robinson, 1989: 284- 295; Nash, 1963: 184, 186-201). Diefenbaker’s delay and personal distrust of Kennedy, however, damaged 64 the capacity and efficiency of NORAD to react properly in an emergency. The overall impression gained by Canadians concerning the affair was that Kennedy had been heroic in defying the Russians, while the posture adopted by their own government had been dilatory and indecisive.4 At the end of January 1963, Diefenbaker wished to dissolve Partiament and call for a general election on a anti-American campaign. He accused the U.S. of an unwanted intrusion in Canadian affairs. He reasserted his position that Canada would honour its joint defense obligations, but would not accept external pressure or interference in the making of decisions. Several cabinet ministers, however, disagreed with this policy and feared that provoking the U.S. could have strong adverse repercussions on Canada’s economy and trade. Diefenbaker’s move precipitated a cabinet crisis and the resignation of Harkness, who had urged on Diefenbaker the convenience of arming Canada with nuclear weapons. From then on, events moved on in rapid succession, leading eventually to the government’s defeat (Diefenbaker, 1976; Fleming, 1985: 589-590, 601-602) After the fall of the Diefenbaker government, Pearson, whom the Kennedy government found more acceptable than Diefenbaker, set about to improve relations between the two countries. In mid-August 1963, the two countries GETTING OUT FROM UNDER THE ELEPHANT signed an agreement whereby Canada accepted nuclear warheads under a joint two-key arrangement for the Bomarcs and Voodoo interceptors, as well as for its NATO forces (an infantry brigade and air division) in Europe. Although Pearson subsequently clashed with successor president Lyndon B. Johnson over the and the Auto Pact, his administration represented in general a return to the traditional Canadian policy of supporting the U.S. on major issues, incrementing NATO defence forces and condemning the Soviets, that had dominated Canadian foreign policy since the end of the Second World War.5 The Pearson years constituted a transitional phase in the evolution of Canadian politics and society. As early as mid-December 1962, Pearson, while still Opposition leader, had warned in Parliament of an imminent crisis which threatened future national unity. Canadians were realizing, he asserted, that Quebecers were ‘‘determined to become directors of their economic and cultural destiny’’ and demanded ‘‘equal and full opportunity to participate in all federal government services, in which their own language will be fully understood’’ (Granatstein, 1986: 248; Conrad,1986: 276-277; Pickersgill, 1986, 177-178). In April 1963, once he had assumed office, Pearson established the Royal Commission on Bilingualism and Biculturalism under the direction 65 of André Laurendeau, editor of the Montreal daily , and Davidson Dunton, a former public servant and president of Carleton University. This policy would eventually lead to the passage of the Official Languages Act in early July 1969 as one of the initial achievements of the Trudeau government and of the latter’s implementation of the policy of bilingualism.6 The Pearson government also set itself to winning support from Quebec, which it viewed as essential for uniting the country. Several of the Quebec Liberal supporters initially selected, such as , , , and René Tremblay, were ruined by scandal. In 1965, however, the so-called ‘‘Three Wise Men’’ (journalist Gérard Pelletier, labour leader and Pierre Elliott Trudeau, professor at the Université de Montreal), were elected to Parliament under the federal Liberal Party auspices. Two years later, the last of the three won the Liberal Party leadership upon Pearson’s retirement. The Pearson administration thus acted as an interin or bridge to a new more dynamic Liberal leadership under Trudeau. Although it contributed to cementing Canadian unity with the Bilingualism and Biculturalism (B & B) commission and presenting Canada with a new flag, its real contribution in that respect was in providing the conditions for permitting Trudeau to enter into the REVISTA MEXICANA DE ESTUDIOS CANADIENSES

leadership campaign and national election of 1968 (Newman, 1969: 370- 373; Gwyn,1980: 62-71;Trudeau, 1993: 75-77).

THE TRUDEAU ERA

As the Liberal Party heir to Pearson, Trudeau was to a certain extent obligated, as he pointed out in The Canadian Way, his memoir of Canadian foreign policy during his government’s period in power, to carry on with the general guidelines established by his predecessor in office. He noted that it had been Pearson who had coined the expression ‘‘middle power’’ to categorize Canada’s relative position in the world. Trudeau added that it would be his government’s intention that Canada should henceforth function as an ‘‘effective power’’ in international politics. Nevertheless, following Trudeau’s election, the government shifted its attention primarily towards the consideration of Canadian needs and outlook in the elaboration of foreign policy. This change in policy provoked puzzlement and often protests on the part of the U.S. Be that as it may, the two countries maintained generally cordial relations with each other throughout the Trudeau period (Westell, 1972: 213-218). 66 Neither in public nor privately was Trudeau as vociferous as Diefenbaker in expressing his personal feelings as a Canadian. He abhorred nationalism and the use of emotionalism to hold countries and peoples together, since history revealed that these often led to conflict, tyranny and oppression (Trudeau, 1968: 151-161). ‘‘A truly democratic government cannot be ‘nationalist’, because it must pursue the good of all its citizens, without prejudice to ethnic origin. The democratic government, then, stands for and encourages good citizenship, never nationalism’’(Ibid: 169). ‘‘More than language or culture, more than history and geography, even more than force and power,’’ he went on to declare, the foundation of the nation is will (Ibid: 187). A cohesive country or nation could only be held together by reason or the people’s consciousness that their interests can best be served within their own country (Ibid: 189, 195-196). Trudeau adopted a much more subtle and less obtuse approach than Diefenbaker in dealing with the U.S. The prime minister preferred to maintain a more realistic view of Canada’s situation with regards to the U.S. in viewing it as a give-and-take relationship of mutual benefit to both countries. ‘‘What we gain by having such a strong big brother...,’’ he commented in an interview with Jay Walz of the New Times, ‘‘we GETTING OUT FROM UNDER THE ELEPHANT lose by the fact that we cannot be a hundred per cent independent.’’7 He therefore attempted to be as cautious as possible in dealing with the U.S. in order to avoid disputes. Trudeau believed that, should the U.S. government feel obstructed or thwarted by Canada on multilateral issues, it might decide to exact bilateral reprisals, especially in the area of trade (Granatstein and Bothwell, 1990: 52). Accompanied by as his personal foreign-policy assistant, Trudeau made his first visit to Washington in March 1969. He found it hard to form any personal rapport or relationship with president , as Henry Kissinger, Nixon’s national security advisor, commented in his memoirs: Trudeau was bound to evoke all of Nixon’s resentments against ‘‘swells’’, who in his view had always looked down on him...he tended to consider him soft on defense and in his general attitude toward the East (Kissinger, 1979: 383)

The president was, nevertheless, very courteous in his meetings with Trudeau and the two found that they could discuss issues despite their personal differences. Beyond the surface level of the talks, however, Trudeau found Nixon somewhat enigmatic and difficult to fathom. After Nixon’s 67 downfall in August 1974, it was found on the Watergate tapes that the president had made a brief reference to ‘‘that asshole Trudeau’’8. Fortunately for Trudeau and Head, Kissinger, whom the former found much more fascinating and congenial to talk with, was present during many of the discussions with the president. Part of the ease in which the talks were conducted was due to Kissinger’s great personal charm. ‘‘As soon as he could divine the object of any petitioner,’’ ex-U.S. ambassador Daniel Moynihan Patrick commented, ‘‘he would proclaim that object to be his very own, and proceed to discover a great and possibly unanticipated commonality of purpose as well as a deeply shared mutual respect’’ (Patrick and Weaver, 1978: 51). Although Canada did not rank high on Kissinger’s list of world concerns, he was remarkably perceptive regarding the problems and issues between the two countries (Kissinger, 1979: 383-384) Unlike many of his contemporaries, Trudeau had not (save for a stint as a student in the Canadian Officers Training Corps) served in the country’s armed forces. Like Diefenbaker, he had been in favour of disarmament and against the proliferation of nuclear arms. Calling Pearson the ‘‘unfrocked prince of peace,’’ he roundly condemned him for his turnaround on the REVISTA MEXICANA DE ESTUDIOS CANADIENSES

nuclear arms issue. He had also accepted the theory that the Kennedy government and Pearson’s about face on the nuclear arms issue were linked to a plot to bring about Diefenbaker’s removal from power. In an article in Cité Libre, Trudeau claimed that Diefenbaker had been defeated by ‘‘les Hipsters’’ close to Kennedy.9 He was also more preoccupied with the steadily increasing disorders in North America (the race riots in several U.S. cities, protests against the Vietnam War, and so forth) rather than external dangers (Thordarson, 1972: 74). Trudeau’s anti-militarist views were reflected in the review of defense policy which the government undertook at the end of March 1969, shortly after the prime minister’s return from Washington. The outcome was a decision in early April to reduce by half Canada’s forces in Europe (Thordarson,1972: 71-75; Westell, 1972: 200-204; Head and Trudeau, 1995: 79-95). Although Nixon was disappointed in the decision, he too was engaged in attempting to reduce U.S. troop commitments in many regions. During the period from 1968 to 1972, Trudeau’s first period of government, many experts believed that the Soviet military threat to the West was not as serious as in the earlier stages of the Cold War (Granatstein and Bothwell, 1990: 26-28, 5, 51). 68 Trudeau made an exception to his anti-nationalist inclinations in the autumn of 1969, when the Humble Oil Company tanker Manhattan sailed westwards through the Northwest Passage to test the feasibleness of shipping oil from Prudhoe Bay on Alaska’s north slope to southern markets. The government reasserted its sovereignty over the Arctic archipelago and its waters by claiming a 100 mile pollution control zone. When the Manhattan made a second voyage, its owners obtained permission beforehand and accepted Canadian regulations on safety and security against oil leaks. The government also increased military aerial surveillance over the area to help maintain its jurisdiction (Honderich, 1987: 4-5, 43; Head, Trudeau, 1995: 27-64). The government’s foreign policy review (Foreign Policy for Canadians), presented to the public on June 25, 1970, steered away from the Pearsonian type of foreign policy in declaring national interest and economic growth to be the new principal focal points, followed by social justice and the quality of life. This implied a reduction in Canada’s participation in global peacekeeping and NATO. Little was mentioned concerning the Commonwealth, the Caribbean, Africa and, most notably, the U.S (Thordarson, 1972: 182-188; Westell, 1972: 204-208). GETTING OUT FROM UNDER THE ELEPHANT

In , Canada established diplomatic relations with Communist China, which resulted in protests from Nixon, whose government had led the opposition to recognition for more than two decades. This did not lead to a prolonged dispute, however, since by that time the U.S. government was moving ahead to bring about its own reconciliation with China. A similar pattern developed after Trudeau’s visit to Russia in , with Nixon following suit one year later (Kissinger, 1979: 735- 736; Granatstein and Bothwell, 1990: 179-189, 192-197; Head and Trudeau, 1995: 11, 12, 173, 221-252). With regard to trade, the Trudeau government had begun to explore options to reduce Canada’s dependence on the U.S. The major motive for this move had been the Nixon government’s economic policy statement of August 15, 1971, which had, among other measures, slapped a ten percent surcharge on dutiable imports. In an essay published in the edition of International Perspectives, External Affairs minister declared that Canada could either maintain its relationship with the U.S., draw towards closer integration with that country, or, as a third alternative, attempt, over a long-term period, to find other ways of reducing that dependency. Over the next few years, the Trudeau government, in choosing the so- 69 called ‘‘Third Option’’, pursued an expansion of trade and investment links with Europe and . These efforts culminated in the signing of contractual or framework agreements with both Japan and the European Economic Community (EEC) in 1976. They did not prosper, however, since both the EEC and Japan were primarily interested in Canada’s primary products rather than manufactured goods. In addition, the U.S. surcharge on imports proved short-lived, having been withdrawn in 1972 largely due to Kissinger’s influence ( Westell, 1972: 208-213; Granatstein and Bothwell, 1990: 160- 175; Head and Trudeau, 1995: 184-190, 265-280). The election of October 30, 1972 gave the Liberals a minority government, with the NDP holding the balance of power. This had a significant impact on the government’s conduct of foreign policy. In early January 1973, the Trudeau government was obliged to sponsor a resolution in Parliament condemning the U.S. bombing raids in Vietnam. This provoked an outcry from the Nixon government, which temporarily led to a de facto rupture of relations. The rupture did not last long, since, as a result of the Vietnam peace agreement signed in Paris a few days later (January 13), the U.S. requested that Canada form a part of the new International Commission REVISTA MEXICANA DE ESTUDIOS CANADIENSES

of Control and Supervision, along with Hungary, Poland and Indonesia, to supervise the truce.10 Under the pressure of the Neo Democratic Party (NDP), the government also made moves towards intervention in the management of the country’s economy. This dovetailed with Trudeau’s own particular tendencies in this direction. In 1973 the government established the Foreign Investment Review Agency (FIRA) to screen foreign investments and ensure that any forms of foreign ownership in Canada would have benefits for the nation. Although in most cases the agency ended up by favouring applicant requests, U.S. and other foreign investors were greatly annoyed by this bureaucratic formality. As a result of the oil crisis produced by the Arab-Israeli war of 1973, the government established a nationally-owned petroleum company (Petro-Canada) to arrange oil imports into Canada, to develop the tar sands, and to carry on further oil and gas exploration. Prior to the Arab- Israeli war, the government had also frozen domestic oil prices at four dollars a barrel and imposed an export tax on oil exported to the U.S. In 1975 also nationalized its potash industry.11 Americans grumbled at the changes. These were offset, however, by the fact that the steady increase in world oil prices forced the government to 70 subsequently remove the export taxes. In addition, Canadian natural gas exports were unaffected, since most of them were locked in by long-term contracts. The Trudeau government also created a special program to ensure oil supplies to the northern U.S. states. These amendments were later capped off in 1976 with an agreement to match the amount of Canadian oil shipped south with an equal quantity of U.S. oil exports heading north (Granatstein and Hillmer, 1991: 255-259; Trudeau, 1993: 284-286). Canada’s attempts to satisfy U.S. energy needs in these ways, together with both countries’ efforts to develop energy self-sufficiency, helped to smooth relations with Nixon’s successor in office, . It also helped that the latter, who came from a district of Michigan close to the Canadian border and was a member of a Canada-U.S. interparliamentary group, had far more knowledge and interest in Canadian affairs than Nixon. Not only was Ford open and friendly with visitors to the White House, but both he and Trudeau shared an interest in skiing (Ford, 1979: 220; Trudeau, 1993: 197, 218-219; Head and Trudeau, 1995: 191-193). The Trudeau government continued its nationalist policies even after it obtained a parliamentary majority in the federal elections of . In early 1976, Parliament approved Bill C-58, an amended version of a law GETTING OUT FROM UNDER THE ELEPHANT originally passed in 1965, which eliminated the tax deductibility of Canadian advertising in U.S. magazines. The measure particularly affected the Canadian editions of Time and Reader’s Digest. The latter compromised by increasing its proportion of Canadian shareholders and by augmenting the amount of (material relating to Canada or by Canadian authors) in order to satisfy the new law’s guidelines. Time, however, refused to compromise and, as a result, the Canadian edition of the magazine ended in March of that year. Under the same act, Canadian advertisers on U.S. television stations were prevented from putting costs as tax deductions.12 Trudeau’s stopover visit to Cuba in January 1976, while returning from a South American tour, raised a specter reminiscent of Diefenbaker’s defiance of the U.S. government in the early sixties. Although Trudeau ended his speech before a great outdoor audience in La Habana’s Plaza de la Revolución with cries of ‘‘Viva Cuba!’’ and ‘‘Viva Castro!’’, he made it clear to the latter that Canada was opposed to Cuba’s military expedition in Angola and that Canadian-U.S. relations remained harmonious. The visit constituted a milestone on the road to Canada becoming Cuba’s chief unofficial ‘‘ally’’ in more recent years (Gwyn, 1980: 197, 295, 303-308; Trudeau, 1993: 210-213; Falcoff, 1998: 43-49). Although all of these matters were resented in Washington, the Ford 71 administration, sensitive to what it believed to be Canadian idiosyncracies, displayed a certain attitude of tolerant understanding. Brent Scowcroft, successor to Kissinger as the president’s security advisor, reacted with the simple refrain, ‘‘Well, there go the Canadians again.’’13 The one incident which particularly irked Ford was Canada’s decision to prohibit the Taiwan team from participating in the in Montreal on the grounds that it insisted on doing so in representation of the ‘‘Republic of China.’’ Ford condemned the Canadian government for its ‘‘narrow political interest’’ and threatened to request that its own team withdraw. In case the games were cancelled, it offered to host them in the U.S. The crisis ended when the Taiwan team, of its own accord, opted to withdraw their participation (Head and Trudeau, 1995: 193-195). Despite this temporary flare-up, Ford and Trudeau continued to be close friends, enjoying skiing holidays together, even during the period when they were no longer in power. In part due to his good relationship with Ford and Kissinger, Trudeau was invited to attend the second Economic Summit of the world’s leading economic and industrial powers held in REVISTA MEXICANA DE ESTUDIOS CANADIENSES

Puerto Rico in 1976 (Granatstein and Bothwell, 1990: 91-93; Trudeau, 1993:219; Head and Trudeau, 1995: 195-198). Trudeau also was able to strike up a warm, personal relationship with Ford’s White House successor, , who assumed office in 1977. Carter’s liberal views on the need for environmental safeguards concerning the Garrison diversion project in North Dakota and for avoiding pollution in the Great Lakes coincided with Canadian concerns. His belief in consultation between the NATO pact allies, human rights and the need for a ‘‘world order’’ to replace the Cold War stand-off, harmonized with Trudeau’s own international outlook. Due to the threat to Canadian unity posed by the 1976 Parti Québécois victory, Trudeau was cautious in dealing with the more contentious bilateral issues between the two countries, such as the problem of sharing the fisheries and hydrocarbon resources in the areas off the Atlantic and Pacific coasts. He was aided by the fact that three of his principal ministers (Secretary of State for External Affairs Don Jamieson, Minister of Finance Jean Chrétien and Minister of Industry, Trade and Commerce ), were friendly to the U.S. An additional advantage was the fact that Walter Mondale, Carter’s vice-president, was a senator from the northern border state of 72 Minnesota. Mondale also possessed considerable experience in the field of energy, the key bilateral issue of this period. The two governments were thus able to cooperate in seeking ways to construct a pipe line to ship Alaskan oil to southern markets. During the latter part of the 70’s, the Trudeau government also made efforts to bolster Canada’s defense capabilities as well as its commitments to NATO.14 Canada-U.S. relations entered a much darker period with the election of to the presidency in November 1980. Dynamic and charismatic, Reagan was also conservative and militantly anti-communist. Although he possessed little knowledge of Canada, he liked Canadians and shared the commonly held notion that they were similar to Americans in terms of culture and institutions. Although Trudeau and Reagan got along reasonably well on a personal basis, in regards to policy and politics in general they were poles apart. Trudeau took into account Reagan’s age and looked upon him as a doddering old man. On occasion, however, he found it difficult to restrain his impatience. During a summit conference at Versailles in 1982, when Reagan faltered in answering a question, Trudeau, who was seated nearby, quipped, ‘‘Ask Al’’ (Secretary of State Alexander Haig) (Granatstein and Bothwell, 1990: 313-314, 323; Reagan, 1990: 350- GETTING OUT FROM UNDER THE ELEPHANT

354; Trudeau, 1993: 220, 301, 329-332; Head and Trudeau, 1995: 211- 212, 214). The principal stumbling block in bilateral relations during this period was the (NEP). The U.S. government protested that the NEP was discriminatory and renewed its complaints about FIRA as well. Americans were also concerned in the early 80’s with the rise of Canadian investments in the U.S. Although the Alberta government and industry leaders added their own protests against the Trudeau government, the NEP proved popular with Canadians, as it underlined their difference in attitudes with Americans with regard to the role of government in the economy and society as a whole. In the end, the depression of the early 80’s, coupled with a decline in oil prices, let the air out of Canadian ambitions towards nationalizing the country’s oil and gas industry and also reduced substantially U.S. criticism of the NEP (Clarson, 1982: 55-113; Granatstein and Bothwell, 1990: 334-335; Granatstein and Hillmer, 1991: 275-277). By 1983, near the end of the Trudeau administration, the two governments were moving in the direction of a free trade agreement. Although Trudeau, together with Mexican president José López Portillo, had initially rejected Reagan’s proposal for a North American Accord in 73 1980, near the end of his term he looked more favourably on the prospect. The government’s Trade Policy for the 1980’s, followed by the documents Canadian Trade Policy for the 1980’s and A Review of Canadian Trade Policy, turned attention away from the ‘‘Third Option’’ to the possibility of free-trade with the U.S.15 to get there, however, many Americans personally felt that Canada would need a new leader. As one U.S. official commented, ‘‘We put up with Trudeau for so long’’ (Granatstein and Bothwell, 1990: 327-335). Under Reagan, the U.S. undertook to greatly expand its military power. Trudeau accepted the NATO ‘‘two-track’’ policy, in which the Western alliance would continue the development of its military forces to match Soviet strength, but would also negotiate with the latter to achieve a reduction of nuclear arms. After much cabinet discussion, the Canadian government agreed to allow the U.S. to test the new cruise missile in the country’s north, given the area’s geographic similarities with Russia’s Siberia (Granatstein and Hillmer, 1991: 282-283; Trudeau,1993: 332-335). At the same time, based on proposals developed by a special task force made up of External Affairs and Defense Department officials, Trudeau REVISTA MEXICANA DE ESTUDIOS CANADIENSES

undertook his own ‘‘third rail’’ plan, a peace initiative to attempt to get the U.S. and Soviets, as well as the heads of the other nuclear powers, to negotiate in favour of arms limitation and disarmament. At a White House meeting in mid-December 1983, the prime minister attempted a direct and personal appeal to Reagan on the issue of peace. Although many U.S. officials did not take Trudeau’s efforts very seriously, Reagan’s military rhetoric tapered off in the weeks that followed (Regan, 1988: 258-260; Trudeau, 1993: 335-341; Head and Trudeau, 1995: 292-309).

CONCLUSIONS

Trudeau’s policies towards the U.S., both with regard to defense and economic issues, were somewhat haphazard and contradictory throughout his period in power. Abhorring nationalism, Trudeau chose to tread cautiously in leading the government in formulating the country’s policy in its relations with the U.S. Unlike the case of Diefenbaker, he was aided by the fact that both he and the presidents he dealt with had capable subordinates who helped in attempting to solve contentious issues between the two countries. Despite 74 the fact that neither Diefenbaker nor Trudeau could significantly change the basic features of Canadian dependency on the U.S. in the areas of defense and trade, they had at least made efforts to address the particular needs of Canada in foreign policy as well as impress upon the U.S. its views on certain issues. By the end of his final term in power (1984), Trudeau had still not found a means for moving the country out from under the U.S. defense umbrella, nor had he found any effective counterweight to the trend toward continental economic hegemony. Be that as it may, he had made significant progress in the way of asserting the nation’s will to self-determination as far as its allies were concerned, as well as chart new directions for Canada in the world. GETTING OUT FROM UNDER THE ELEPHANT

NOTES

1 Lester B. Pearson. 1972-1975. Mike: The Memoirs of Lester B. Pearson, 3 vols (New York: Quadrangle) I:46-54; III:63-64, 80-81, 100-103, 111- 112 and 117; Interviews with John Matheson, Charles Ritchie, Dean Rusk, Richard O’Hagan, and Howard Green, in Peter Stursberg. 1980. Lester Pearson and the American Dilemma (: Doubleday Canada Limited), pp. 181-188; Nash, Kennedy, pp. 126-128, 132, 156-158, 280-281 and 306-309. 2 Diefenbaker became for a time a kind of folk hero in Cuba. A Canadian correspondent travelling to Camaguey was surprised to see a large blown up photograph of Diefenbaker on the wall of his hotel lobby, alongside those of Castro, Marx and Lenin. Diefenbaker, One Canada, I:169-177; Interviews with , and Howard Green, in Peter Stursberg, Diefenbaker. 1975-1976. (Toronto: Press), 2 vols I:134-139; Diefenbaker, One Canada, II:162- 163 and 169-177; Nash, Kennedy, pp. 101-103, 132-135 and 150-151. 3 Interviews with John Fisher, Roy Faibish, and Grattan O’Leary, in Stursberg, Diefenbaker, I:171-173; Robinson, Diefenbaker’s World, pp. 198-209; Nash, Kennedy, pp. 120-123, 136 and 307-308. 4 Nash, Kennedy, pp. 201-208. According to a Canadian Institute of Public Opinion survey, done in late December 1962, 21 per cent of Canadians ranked Kennedy as the person they admired most, while only 3 per cent chose Diefenbaker, who ranked fifth in popularity. Granatstein, Yankee, p. 128. 75 5 During this period, relations between the two governments were eased by joint cabinet committee meetings and a ‘‘hot line’’ between the offices of the president and prime minister. Pearson, Mike, III:100-103 and 111-148; Stursberg, Pearson, pp. 194-224. 6 Pierre Elliott Trudeau. 1968. ‘‘Official Languages Bill’’, http:// www.nelson.com/ nelson/school/discovery/cantext/speech21968; Richard Gwyn. 1980. The Northern Magus: and Canadians (Toronto: McClelland and Stewart), pp. 219- 252; Pierre Elliott Trudeau. 1993. Memoirs (Toronto: McClelland & Stewart), pp. 118-128. 7 Interview conducted by Jay Walz, of the New York Times. 1968. in Pierre Elliott Trudeau, Against the Current: Selected Writings, 1939-1996, ed. Gérard Pelletier. 1996. (Toronto: McClelland & Stewart). (November 22), p. 296. 8 Lawrence Martin, ‘‘Thank you, Mr. Nixon: It Was a Good Time for Canada’s Soul’’; wysiwyg://155/http://www.igsreality.ca/nixon. htm; Head and Trudeau, Canadian Way, p. 177. 9 Both Jean Marchand and Trudeau chose not to run as M.P.s for the federal Liberal Party during this period due to Pearson’s acceptance of nuclear arms for Canada. Trudeau, Memoirs, pp. 329-332. REVISTA MEXICANA DE ESTUDIOS CANADIENSES

10 Canada’s role in the Commission lasted until July 1973. Granatstein and Bothwell, Pirouette, pp. 52-60; Head and Trudeau, Canadian Way, pp. 180-184. 11 Granatstein and Bothwell, Pirouette, p. 72; Alan Blakeney, ‘‘History of Public Enterprise in Saskatchewan’’; http://www.saskndp. com/history.crown.html. 12 Canada, Gray Report. 1972. Foreign Direct Investment in Canada (Ottawa: Information Canada), chapter 12; Isaiah Litvak and Christopher Maule. 1974. Cultural Sovereignty: The Time and Reader’s Digest Case in Canada (New York: Praeger); Donald K. Alper and Robert L. Monahan. 1978. ‘‘Bill C-58 and the American Congress: The Politics of Relaliation’’, Canadian Public Policy, vol. 4, no. 2, pp. 184- 192. 13 Interview with Scowcroft, cited in Granatstein and Bothwell, Pirouette, p. 93. 14 Over time, it was estimated that oil from other sources would be cheaper; also, problems in determining a pipeline route, as well as estimated construction costs, led to the project becoming dormant. Jimmy Carter. 1982. Keeping Faith: Memoirs of a President (Toronto: Bantam Books), pp. 474-478 and 538; Granatstein and Bothwell, Pirouette, pp. 89-91, 96-107, 253-260 and 346-350; Trudeau, Memoirs, pp. 219- 221; Head and Trudeau, Canadian Way, pp. 202-208. 15 Canadian Trade Policy for the 1980s: A Discussion Paper (Ottawa: Minister of Supply and Services, 1983), pp. 40-45.

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