Atlantic Trade Community, Foundation of the Free World

MR. WILSON introduced The Honourable Lester B. Pearson.

MR. PEARSON: When Khrushchov uttered the words, "We will bury you", which have now become famous--or notorious--some thought them to be a warning that all-out aggresive military action was being contemplated by the Soviet against the free democracies of the West.

Neither Mr. Khrushchov nor the system of government which he directs, would hesitate to use force and take military action in the pursuit of policy if such means would suit their purposes. After all, wars to liberate peoples from capitalist slavery are, to a Communist, "just" wars, and, as such, not to be condemned. I do not think, however, that Mr. Khrushchov, or any other sane person-which excludes, we should not forget, the "Hitler type"--would deliberately take action that would inevitably mean all-out nuclear war. Therefore, as long as there is a Western nuclear deterent and the means and the will for swift and decisive retaliation exist, then peace, in the sense of the absence of general war, is likely to be preserved even if it is balanced uneasily on the fear of universal suicide.

There is no need for all countries to participate in this nuclear deterrent. Indeed there are strong reasons why they should not, why they should make their necessary contributions to collective defence in other ways, so that the number of nuclear powers will not increase.

But there is every reason why the nuclear deterrent should be kept strong and effective, until there is general, including nuclear disarmament and we can find a better and more permanent basis for peace than bombs.

In all probability, Khrushchov had something other than a military funeral in mind. It was the extinction of our democratic society and its replacement by Soviet Communism without large scale war-by conflict inside co-existence.

Let us not fool ourselves. When the Communist leaders talk about peaceful co-existence, they do not mean friendly co-operation with our form of society. As James Reston of The New York Times wrote during Mr. Khrushchov's visit to the U.S.A. when the Soviet leader was making friendly noises, "Khrushchov did not take back his threat to 'bury us'; he merely promised not to kill us first. Capitalism would be buried alive, overwhelmed by the 'superiority' of communism, as feudalism was overwhelmed by capitalism."

If there were any doubts about Communist policy on this score-and there should not have been-they must have been removed by the manifesto adopted at the Communist summit conference held at Moscow last November.

That conference, it is true, rejected the Chinese Communist view of dynamic and revolutionary aggression even at the calculated risk of nuclear war. But it did not reject conflict between the two worlds as the central feature of Communist policy. The manifesto read, "Peaceful co-existence among states does not mean ... a rejection of the class war ... on the contrary it implies an intensification of the struggle of the working class and of all communist parties for the triumph of socialist ideas."

It was made clear that peace was not an end in itself. That end was the establishment of the Communist system throughout the world. Peace was merely, because of existing circumstances, a condition that would help to bring about this result.

So we must never forget what we are up against. It is co-existence with conflict, and will remain so until the leaders of the Communist world abandon their determination "to bury us", after our defeat in the class war.

In this conflict-conducted if possible without recourse to direct military aggression-the Communist rulers are counting especially on two things: (1) The moral weakness of the democracies, their inability to accept the disciplines and make the sacrifices that will be necessary to preserve the values of their own society against socialist competition, values which, in any event, they are themselves debasing; and (2) The disunity of the democracies, both politically and economically. The Communists hope to bury us one by one, not collectively.

So far as the first factor is concerned, the Communists have some reason for their optimism. We can prove them wrong, of course, but only if we have the will to do so. Free democracy should represent a far stronger form of political, social, and economic organization than Communist despotism. But its strength is not automatic. It depends on the individual from whom all authority is derived. Therefore, if we, as individuals, in Canada or in any free country, fail in our obligations as citizens; if we prefer ease to effort; if we are concerned with what we can get out of government rather than what we can do to serve our country; if we put selfish interests above the public good, then Mr. Khrushchov and his fellows will not have too much difficulty in burying democracy.

I know well that in the conditions of life and society today, the state has a duty to intervene in the interest of the security of the individual beyond that which was required in earlier days.

But I know also that if the desire of the individual in the democratic state is merely to be supported by such intervention, a free and vigorous democracy will not survive. There will be lots of dictators, big and little, ready to oblige by doing the supporting.

If today the free citizen is willing to become merely a digit in a table of government statistics, that digit will ultimately become zero. It is not hard to erase zero.

Lord Acton once said that "freedom is the deliverance of man from the power of man". It is also the emergence of man from the mass. That emergence will slow down or even be reversed if we try to escape the duties and responsibilities which flow from freedom. There is some evidence that this is happening and that we may lose our freedom in that dependence which comes from selfish and irresponsible demands which we make on those we have chosen to direct and control much of our life. This direction and control may come from a government, from a bureaucracy, or from a trade union boss or a president of a monopolistic corporation. Whatever form it takes, it can destroy our freedom, our democratic society, and make easy its burial--its replacement by totalitarianism. And we, the people, would have willed it so.

In their plans the Communists are counting on this, on the deterioration of free democracy, as much as on the power of their rockets.

They are also relying heavily on our disunity in political and economic matters. About the latter of these--economic matters--I wish to say a few words.

The Communist governments are beginning to make things difficult for capitalistic and competitive traders. "Free enterprisers" is perhaps not the best expression to use in describing them, now that foreign trade necessarily depends so much on government support and assistance even in capitalist societies.

How can such Soviet competition be met by the democracies? By doing something which is required also for other and more positive reasons, namely, by removing trade barriers between free countries, by building up the largest possible trading area with a minimum of restrictions between its members and a maximum of exchange between them. The Atlantic area is the place to begin this process, on a wider than a continental basis. It should also be done in a way which would provide for the association of any other free democracy that wishes to join the group.

This process of economic integration is essential if we are to solve other international problems that face us. Except in periods of immediate and great danger, we cannot have collective defence without political co-operation. We cannot have political co-operation with economic conflict and division. Neither national prosperity nor national security can be guaranteed by national action alone.

The time for imaginative action that would encompass more than a continent is here. Nothing less will do. The time, the opportunity, is now; it may soon pass.

The European Common Market-scoffed at as a Utopian dream ten years ago-is now a "going concern". It is gradually removing all trade barriers between its six European members. So spectacular has been the resulting economic growth, that it is now the world's largest trading area, and the third largest market for Canadian goods.

Furthermore, the seven nations of the European Free Trade Area are moving toward integration with the Common Market. The trend is clear and is not likely to be stopped. Mr. Macmillan made this clear during his recent visit to Ottawa and Washington, just as the United Kingdom Lord Privy Seal made it clear two months ago in Geneva. The United Kingdom is going to move across the channel and seek a basis for membership in the Common Market. It now feels that for this purpose satisfactory solutions can be found for the three important problems standing in the way: Commonwealth preferences, agricultural imports, and political sovereignty. Canada might as well face this fact and face it as an opportunity which can be exploited rather than a menace to be prevented.

The President of the U.S.A., on February 16, welcomed the move when he said, "We shall support and encourage the movement toward European integration." Then he added these important words: "It (European integration) can contribute greatly to meeting the goals of the broader Atlantic Community."

The Vice-President, Lyndon Johnson, expressed the same idea in Paris on April 6th when he said, ". . . a genuine ... economic community must appear increasingly feasible as our long run goal"-which he defined as "a true Atlantic community with common institutions".

Mr. Macmillan while at Boston in his recent visit, confirmed that this is the position of the United Kingdom:

I have no doubt of what our aim should be. We ought to try to work for the largest area of free trade that we can create.

Free trade for a free world. That may still be a vision. It may be a long time before it can take practical shape . . . Yet many new and vital ideas are now being discussed by practical men which a few years ago would have been dismissed as impractical dreams.

He then made it clear that one "new and vital" idea he had in mind was an Atlantic Trading Area and he invited Canada and the Commonwealth to assist and encourage, rather than shy away from and discourage, this development.

The Lord Privy Seal in the British Cabinet was even more specific on one aspect of the problem when he said on February 27, last, "Britain would have no objection to a reduction of the preferences that her exports enjoy in Commonwealth markets if the six wanted to start negotiations with the Commonwealth to that end."

Canada should be in the forefront in fostering, not hindering, such negotiations. We should encourage European economic integration on a basis of expanded, not restricted trade, and then do everything we can to convert this European into an Atlantic Trading area, with which other free countries could be associated.

For us, there are four possible policies. The first is to work for the maximum of economic self-sufficiency; for economic nationalism. This might have some tempting short run attractions, especially in a recession, but in the long run it would be a sterile, backward and self-defeating policy. There is no salvation here.

The second is economic integration with the U.S.A. A distinguished American made proposals along this line in Toronto not long ago. In certain circumstances, such as the Commonwealth disintegrating, or more likely, the European countries coming together in a way that would exclude North America, serious consideration of such a solution might be forced on us. I do not think any Canadian need shudder at the prospect. There could be worse fates, but there could be far better ones. Certainly this is not a policy which should provoke any cheers. How could we keep our separate political identity in such a situation? Surely this is not the way to solve the Canadian flag problem.

The third policy is that of continued reliance on GATT as the international agency for broadening the area of freer trade. Since the war GATT has undoubtedly been the chief instrument for the removal of trade barriers and for general tariff reduction. But can it do much more? The current discussions at Geneva will soon give us an answer to that question. In any event, is a new impetus not now required and cannot this best come from the Atlantic countries?

This brings me to the fourth alternative, which is the careful, steady, stage by stage, building of an Atlantic Economic Community to include Canada and the U.S.A.

I know the difficulties in the way. I know the dangers. I know it will-and should-take time, just as the building of the European Economic Community is taking time, in order that the industries and businesses affected by changes will be given time and assistance in adapting themselves to those changes.

The important thing now, before it is too late, is to get started. To begin the process. To find the will to move. It is not, indeed, so much a question of economic policy as one of political will.

Yet nothing less than this broader vision will be sufficient to meet the challenges ahead.

When he was in Toronto in February, Mr. Neil McElroy, speaking from his impressive business and governmental experience, had this to say:

Retreat (to economic nationalism) is not the answer; but rather a sound advance toward partnership in economic planning, freer trade, a fuller flow of investment capital, an easier interchange of goods.

In this direction lie the best Solutions to the problems of capital needs and high costs....

A North American Common Market could be accomplished in a period of a relatively few years.

Any doubt as to the time factor can be dispelled by a look at the history of the European Common Market. Few of us would have anticipated ten years ago that it could possibly be at the stage at which we find it today. But it is an accomplished fact.

Any mere continental solution, however, is not adequate. The partnership should be not only across the border, but across the Atlantic. For Canada this is essential.

This process of Atlantic economic integration must take place for political as well as for commercial reasons. It is necessary for the prosperity and growth of the Atlantic democracies. But it may soon be necessary also for their survival.

Lip service is increasingly paid to the need for action. But action itself lags, far behind words. And time passes. Europe is moving. Soviet Russia is moving. Canada and the U.S.A. are hesitant when they should be giving leadership through imaginative and forward-looking policies. Our economies are not expanding, and we are tempted to seek an answer to our problems through short run nationalistic expedients. These would merely set back the clock.

The times call for more because the times reflect changes in world political and economic organization more far-reaching than anything that has happened, politically, since the break-up of the Roman Empire and, economically, since the industrial revolution.

As usual, however, we have a hard time adjusting ourselves to these changes. We cling to the old familiar concepts long after they have lost their relevance to the situations we face.

So what to do?

A former French Minister, Maurice Faure, gave the answer recently when he said, "Bold and imaginative thinking like that which launched the Marshall Plan and the Schuman Plan is needed again. We must have some new ideas ... If you wait too long it will be too late."

In 1933, at the depths of the depression, the President of the U.S.A. called a world economic conference to find a way out of our difficulties. He then ensured its failure by falling back on purely national recovery policies.

I believe that now, as we face problems very different from, but more complicated and difficult than those of the thirties, an Atlantic Economic Conference should be called, on the highest governmental level, to lay the foundation for an Atlantic Economic Community.

For, I repeat, nothing less than this will do.

THANKS OF THE MEETING were expressed by Mr. R. Bredin Stapells.