The Lost Massey Lectures (45 page)

National sovereignty and international authority cannot exist together. The danger of Williamsburg is that Canada accepts informally—for reasons of economic retaliation, political pressures, or balance-of-power tactics—what cannot be put into place legally. There can only be one legal order in Canada that may be flouted by a dominant and brutalizing neighbour. But there cannot be two legal bodies occupying the same space.

Let us be clear on this. Canada is sovereign, but we can be craven because we fear the economic sanctions and the loss of affluence that we now enjoy. This fear may have a foundation in reality. On the other hand, it is at least possible that what we fear is merely fear itself.

In any event, Canada has no choice. It cannot maintain the role of purveyor of raw materials for the simple reason that too many less-developed nations are taking over our markets with lower costs. We simply have to enlarge and diversify our industrial strength. There can be no question that the multinational corporation must adapt to the priorities and policies of the nation in which it operates as developer of resources, processor of goods, and supplier to markets. National policies do not conform to the motivations and objectives of the corporations that the state has
admitted to the economy; it is the other way around. And this applies to domestic as well as multinational companies.

In a world in which the pressure on resources is growing from the two directions of, on the one hand, increasing demand with growing populations and rising standards of living and, on the other hand, the significant exhaustion of resources, it becomes evident that the private sector, motivated by its own growth, cannot be the final arbiter and allocator of resources between the corners of the earth, between consumption for today or investment for tomorrow, between the poor and the rich nations.

Limited sovereignty is not sovereignty at all. Hence, no nation can permit the corporation, domestic or multinational, to operate beyond the legal reach of its law. The sovereignty of the state demands that it maintain and secure the control of its own economy, the life-support system of its citizens. Canada has surrendered the value of too large a percentage of its lands, resources, and markets to corporations that have demanded the rights and privileges of absolute ownership as a condition of investment.

As the United States becomes increasingly protectionist, Canada will become increasingly isolated. In fact, it will become not only isolated but vulnerable, as Canadians realize that imported technology and ideas do not create new comparative advantages and that tariff protection does not foster an improved standard of living or allow infant industries time to grow.

Similarly, the emphasis on the export of natural resources before the competition of new nations financed by flows of foreign, including Canadian, capital. It is time that we left the field to the new arrivals of the third world.

New economic policies intend a change in direction, the switch from former ways into new paths. The costs become immediately apparent as change forces adaptation, offends the pride of policy makers, and disrupts ancient investment patterns. The benefits are
in the future, but the costs are here and now—individually, corporately, and politically.

The new policies must come down hard on the old failures. Foreign capital never claimed to be a panacea for all our weaknesses. It was we who thought so. We forgot that foreign capital could not make up for the sale and export of our wealth and the emigration of our youth. We did not have enough control of ourselves or our economy to realize that, first and above all else, capital must be made and must be retained at home. By giving away the value of our resources, we never could accumulate the surpluses that would have enabled us to finance and invest in the balanced growth of the Canadian economy.

What can politics do? first, it must accept the responsibility of sovereignty and the supremacy of politics in deciding the allocation of resources and the directions of future development. Let the economists decide the application and costs of the directions chosen. Secondly, Canada can grow and be of value to the world and to itself only by being an independent, sovereign state, and it can do this only by the control of its own economy and politics.

The ultimate norms directing Canadian policies cannot be the interests of other nations, no matter how powerful, or the fear of their reprisals. Our aims will be truly Canadian when they arise out of the hearts and minds of our people, not when they are dictated at summit conferences or by ambassadorial pressures.

Our political leaders have much to work with. Not only the lands and people which we have always had, but the same burning desire that led so many Canadians to look for challenge elsewhere exists in today's generation. We have all the means to create a viable and gainful economy if we can find the leadership to put it all together.

A nation has an inner structure and vitality that imposes a pattern on its environment. Understanding and having confidence
in the spirit and capacity of a people is an essential quality of sound political leadership.

Rene Dubos, in his book
A God Within: A Positive Philosophy for a More Complete Fulfillment of the Human Potential
, quotes Michelangelo expressing his feelings on looking at a block of marble:

The best of artists has that thought alone,
Which is contained within the marble shell.
The sculptor's hand can only break the spell,
To free the figures slumbering in the stone.

The potential and the capacity of Canadians to do great things in and for the world is there. It needs the political leadership and a belief in ourselves to break the spell.

The challenge facing our political leaders is to establish a clear and distinct Canadian identity as an independent state, a worthy ally, but an unwilling satellite.

An identity is clear when our policies, whether in the fields of trade and commerce, external affairs and defence, work in the same direction; an identity is independent when we have control of our own economy, money and credit; it is distinct when Canadian national interests and objectives, with full regard for the interests and choices of others, alone determine our attitudes.

Joint Communique

Williamsburg, Virginia—May 29, 1983

1. As leaders of our seven countries, it is our first duty to defend the freedom and justice on which our democracies are based. To this end, we shall maintain sufficient military strength to deter any attack, to counter any threat, and to ensure the peace. Our arms will never be used except in response to aggression.

2. We wish to achieve lower levels of arms through serious arms control negotiations. With this statement, we reaffirm our dedication to the search for peace and meaningful arms reductions. We are ready to work with the Soviet Union to this purpose and call upon the Soviet Union to work with us.

3. Effective arms control agreements must be based on the principle of equality and must be verifiable. Proposals have been put forward from the Western side to achieve positive results in various international negotiations: on strategic weapons (S.T.A.R.T.), on intermediate-range nuclear missiles (
INF
), on chemical weapons, on reduction of forces in Central Europe (
MBFR
), and a conference on disarmament in Europe (
CDE
).

4. We believe that we must continue to pursue these negotiations with impetus and urgency. In the area of
INF
, in particular, we call upon the Soviet Union to contribute constructively to the success of the negotiations. Attempts to divide the West by proposing inclusion of the deterrent forces of third countries, such as those of France and the United Kingdom, will fail. Consideration of these systems has no place in the
INF
negotiations.

5. Our nations express the strong wish that a balanced
INF
agreement be reached shortly. It is well known that should this not occur, the countries concerned will proceed with the planned deployment of the U.S. systems in Europe at the end of 1983.

6. Our nations are united in efforts for arms reductions and will continue to carry out thorough and intensive consultations. The security of our countries is indivisible and must be approached on a global basis. Attempts to avoid serious negotiation by seeking to influence public opinion in our countries will fail.

7. We commit ourselves to devote our full political resources to reducing the threat of war. We have a vision of a world in which the shadow of war has been lifted from all mankind, and we are determined to pursue that vision.

Joint Communique announced by President Reagan

Williamsburg, Virginia—May 30, 1983

Our nations are united in their dedication to democracy, individual freedom, creativity, moral purpose, human dignity and personal and cultural development.

It is to preserve, sustain and extend these shared values that our prosperity is important.

The recession has put our societies through a severe test, but they have proven resilient. Significant success has been achieved in reducing inflation and interest rates, there have been improvements in productivity and we now clearly can see signs of recovery.

Nevertheless, the industrialized democracies continue to face the challenge of insuring that the recovery materializes and
endures, in order to reverse a decade of cumulative inflation and reduce unemployment, we must all focus on achieving and maintaining low inflation and reducing interest rates from their present too high levels. We renew our commitment to reduce structural budget deficits, in particular by limiting the growth of expenditures.

We recognize that we must act together and that we must pursue a balanced set of policies that take into account and exploit relationships between growth, trade and finance in order that recovery may spread to all countries, developed and developing alike.

In pursuance of these objectives we have agreed as follows:

1. Our governments will pursue appropriate monetary and budgetary policies that will be conducive to low inflation, reduced interest rates, higher productive investment and greater employment opportunities, particularly for the young.

2. The consultation process initiated at Versailles will be enhanced to promote convergence of economic performance in our economies and greater stability of exchange rates on the lines indicated in an annex to this declaration. We agree to pursue closer consultations on policies affecting exchange markets and on market conditions. While retaining our freedom to operate independently, we are willing to undertake coordinated intervention in exchange markets in instances where it is agreed where such intervention would be helpful.

3. We commit ourselves to halt protectionism and, as recovery proceeds, to reverse it by dismantling trade barriers. We intend to consult in appropriate existing fora on ways to implement and monitor this commitment. We shall give impetus to resolving current trade problems. We will actively pursue the current work programs in the General Agreement on Tariffs and Trade
(
GATT
) and Organization for Economic Cooperation and Development, including trade in services and high technology products. We should work to achieve further trade liberalization negotiations in the
GATT
with particular emphasis in expanding trade with, and among, developing countries. We have agreed to continue consultations on proposals for a new negotiating round in the
GATT
.

4. We view with concern the international financial situation and especially the debt burdens of many developing nations. We agree to a strategy based on effective adjustment and development policies by debtor nations, adequate private and official financing, more open markets and world wide economic recovery. We will seek ratification of the increases in resources for the International Monetary Fund and the general agreements to borrow. We encourage closer cooperation and timely sharing of information among countries and the international institutions in particular, between the International Monetary Fund (
IMF
), the International Bank for Reconstruction and Development (
IBRD
), and the
GATT
.

5. We have invited ministers of finance in consultation with the managing director of the
IMF
to define the conditions for improving the international monetary system and to consider the part which might, in due course, be played in this process by a high level, international, monetary conference.

6. The weight of the recession has fallen very heavily on developing countries and we are deeply concerned about their recovery. Restoring sound economic growth while keeping our markets open is crucial. Special attention will be given to the flow of resources, in particular, official development assistance to poorer countries, and for food and energy production, both bilaterally and through appropriate international institutions. We reaffirm our commitments to provide agreed funding levels
for the International Development Agency. We welcome the openness to dialogue which the developing countries evinced at the recent conferences of the non-aligned movement in New Delhi and the Group of 77 in Buenos Aires and we share their commitment to engage with understanding and cooperation in the forthcoming meeting of the United Nations conference on trade and development in Belgrade.

7. We are agreed upon the need to encourage both the development of advanced technology and the public acceptance of its role in promoting growth, employment and trade. We have noted with approval the report of the Working Group on Technology, Growth and Employment, which was set up at Versailles last year and commend the progress made in the eighteen cooperative projects discussed in that report. We will follow the implementation and coordination of work on these projects and look forward to receiving a further report at our next meeting.