TOIfARD JAPAR: AH IRVBS'rIGA'l'IOR 01 POSSIBLE BXPLARAIfiORS POR...

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AR ARALYSIS OP ftB DBVBLOPIIBR'l' OP CARADIAR FOREIGN POLIcr

TOIfARD JAPAR: AH IRVBS'rIGA'l'IOR 01" POSSIBLE BXPLARAIfiORS POR ITS-

LIMITBD NATURE ..

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~Keiki' Kimura

~ .' Department of"Political Science

-October, 1984

McGi 11 Uni vers! ty , li

Montreal, Canada

A thesis submitted ta the Paculty of Graduate Studies and Researob in partial fulfillment of tbe requirements for the degree of Master of ArtS'

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ABS'l'RACT

This study investigate6, wi thin thé, context of Canadian , .

foreign policy towa~ds Japan, the c~uaea, and nature of· the <

past ~nd current limited ~cope of Canada-Japan r~l~tl~ns; It , s.eks to. i-dentify the salient factor,s that have restricted

, . Canada ' s bilateral r~lationship with Japan to commercial matters. This rn~nifest l.ack, of non-eco.no~ic interaction is

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inconsistent with Caoada's self-e~poused foreig~ policy,orien-tation known as the 'third option'.

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In order to analyze this situation l pres,ent three pOssi-

ble explanations. Canada-Japan relations are resbricted

beèause of 1) factors related to u.s.~JaP!Th and Canada-U,.S. relationsr 2) each country's perception of the other 1 3) the

effects of federal-provincial relations.

Each of these explanations has' a certain validi ty and

each of the- .prob~éJIls associated wi th the explanations affect· diffe!,=ent aspects of Canada-:Japan relations. Togéther these problems function ~o limit Canada-J'apan relations to economic

interaction and adver~ely affect Canada's commercial relations' vith Japan.

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RESUME . ,

Cette étude met en êvi dence, dans le ca'(jre dQ 1 a poli ti que ~

extérieure canadienne vis-~-vis à le Japon, les causes et nature de la

envergure lim'it~e, pass~e et act'Uelle., des rapports entre leI Ca,nada

et le Japon. Cette étude vise à identifier les 'facteurs saillants qui

ont limite les rapports bilat~raui canadiens avec le Japon t la

dimension commerciale. éette situation de sous-d~veloppement de la

interacti.on no'n-economique est en contradiction avec l'orientation de J

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la politique extérieure canadienne appel~e "la troisièmE!" o1>tion." .

PQur analyser cette sttuation, trois exblanations possibles.sont

present~es. Les ra~ports sont limit~s ~ cause de

,n rapports entre les ftats-Unis et~,J.~ Canada, et entre les , ,

• Etats-Unis et le Japon., \ ,\

ii) la" perception par le Canada et la J~on l'un de l'autre. &

iii) les effets des relations f~d~rales-p ovinciales. , , ,

Il re~~it' de not~e analyse que chaque hyp thèse a une ,certaine

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v~lidit~ et.que les probJèmes examin~s en t avec chaque exp1anation , .

affectent di ff~rents aspects d~s .. , rapports e~tre 'IJ e Canada et 1 ~ Japon.

Conjointemept ~es problèmes limit~nt les r~pports essenti~llement - f.',

aùx relatives commercial'es, et influent même de façon negative sûr , .

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" . TABLE 0," ,COltT)SiI"t$

TRODUCTION'

~ A. - statement of Statement of E.'ramewqrk of

, , 1 Purpose t •• l' ••••••••••• ' ••••••••••• 'f

B. C.

the prob1em •••••••••••••••• '. • • •• U 2 Analysis ........................ ': 5

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THE DOMBSTIC DETERMINANTS OF CANADIAN FOREIGN fO~ICY TOWARDS JAPAN

J A. THE GOVERNMENTAL COMPONENT ... " • • • • • • • • • • • • • • • • • ••

1. Federal Government ••.••••••••••• ~ • • • • • • . .. • • .. !

2. provincial Governments •••••••••••••••••••••••

B. SOCIETAL COMPONENT: Business Cfrc;;les •.•••••••••

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II. ' THE EXTERNAL DETERMINANTS OF CANADIAN FOREIGN POLICY TOWARDS JAPAN,

A. THE GLOBAL COMPONENT •••• ~ •••••••••••••••••••••••• 32 '1.' The Rise. Qf the Pacific Basin •••••••••••••••• 32 2. The Pacific an~ Canadian<> Foreign Policy

in the Trud'eau Era •••••• ; ••••••••••••• '. • • • • • • 35 -~ ,

B •• THE INTERSTATE éOMPONENT: CANADA-JAPAN REiÂ'TIONS 42 1. communicatlons Flows ~........................ 42 2. Academie Relations '........................... 47 3. Tourism and ImmigratioJ'l ••••••••••••••••••• _'.. 58:

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'-4. Commerci~l Relations ....................... '.. • 63., ~

III. EXPLANATIONS OF THE CONSTRàINTS ON THE CANADIAN-JAPAN RELATIONS

A.

B. C.

The Iml?act of of each other The Impact of The Impact of

Canadian 'and Japanese Perceptions , ................................... U • 51. Impediaents •••• ' •••••• " ••••• ~ Federal-Provincial Relations •••••

IV. THE AUTOMOBlt.E NEGOTIATION

75 75 79

A. BACKGROUND TO THE CONPLICT •••••••••••• '. • • • • • .. • • 80 1. ~he Canada-U.S. Auto Pact •••••••••••••••••••• 80 2,. The Restriction"of Japapese Car Import;s ._..... 1 83

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B. TH! THREE'EXPL1CATIONS APPLI,D TO THE AUTO~ASE' 1. Canadian-Japanese Perceptions •.••••.••..•.••• 2 .... -U • S. Impedimenta •••••••••••••••••••• ~ ••••.••• 3. Federal-Provincial Relations •••••••.•••••••••

cONCLt\s l ON ~ •••••••••••••••••• v ..... ~ •• ~ .• ,. ~ •••••••••••••••• .r. '

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ENDNOTES ................................ tI •••••••••••• ., ••• / --- . "-.

LIST OF 'INTERVIEWS .................. -- .... ., ............. .

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87 87

'94 96

100

107

115

BIBLIOGRAPHY 1 ••••••••••••• c ••••••••••••••••••••••••••••••• -118

1. Gener al 'Wor ka •••••••••• ~ ••••••• " •••••••••••••••• 2. Canada ... Japan ,Relat ion"s ......... " •••••••••••••••• 3~.paReae gaRadiaft Relations and the

\ ~utomotive. Negotiation • "_" •••• "". ~ ••• " •• ,. , ••••••

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LIST OP TABLES

- 'l'able 1: Canada-Japa~Offlcial Bilateral Fora - 15

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j'l'able 2: Canadian Studont and'Employmen~ . . Authorizations to Japanese Citiz~s ••••••••• 48, ,

- ~ Table 3: Student Documentatio.Ïl by Province of

Destination .. . --: ............................. ' . . 49 .. ~_ w .. ,

Table 4:

Table 5:

Table 6:

Table 7:

Table 9~

Table 10,:

..... Japanese, Canàaiàn and B,itish Studeryts in the u. s. . ... _ .................. .

,) Admission to Canada ~ Students by Country of L~st Permanent Residence and. by Level of Study , ••• " ••••••••••••••••••

-Japanese University Students in Canadà by Destination ................................ . ,.

. Japanese Tour lsts in Canada ","_ •••••••.••.••.••

Japanese, American __ d Briti-sh Tourists to Capada •••••••••••• : •••.••••••••••••••••••

~apanese, British, American and B.K. Immigration to Canada ••••••••••••••••• ; •••••

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Destination of Japanese Immigrants ,

Broken down by Province ••••••••• , •••••••••••

Table Il,- Japanese Temporary Businessmen i,n the U .s. .. . .

Table 12: Employment ~uthorization issued by , Province of .Destination •••••••••••••••.•••••

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This study investigates, wi th!n the context of Canadian 1

foreign policy tdwards· Japan, the causes and nature of the

past . and current limited scope of Canada-Japan relations.

More specifically, l-At! seeks ~ salient ~actors tha~

have, 1 would argue, resti: icted Canada 'ls bilateral relation-. .,/ l '

ship with Japan to· commercial matterS-: This manifest lack of

non~ec6no~ic interaction is inconsistent wi th Canada' s' self-

espoused foreign policy orientation known _~s the ',third

QPtil'n' •

In order to analyze this situation 1 present three possi-

ble" 1 explanations for the' 'restricted nature of Japanese-

ian relations. They are: first, Canada-Japan relation~

are restricted because of fac:tors related to"U.S.-Japan and ,

relations. Secondly, Canada-Japan relations jire

r icted because of each_ country' s perception of th~ other.

li.y", Canada-Japan relations are restricted because of the

effects of federal-provincial relations.

I show that each of these expfanations has a -certain

va idi ty and that each of the pr.oblems associated wi th the

ex lanations affect different aspect.s of Cat;tada-Jaaan rela

tions. Together these problems function to l~mit Canada-Japan

rela~ions to economic interaction and also, as I set out in my

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case study of the auto pact, adversely affect Canada's commer-

• cial relations with Japan.

To test the validity of these, exp1anations, Canadian

foreign po1icy towards Japan will be examined utilizing an

analytical framework. The • IBA 1 model, developed by Jonathan

Wilkenfeld and his associa tes, will be used to provide a •

framework in which the relevant evidence concerning the Japan-

Canada relationship can be coherent1y ana13zed for comparatiye

study. (1) . FUJ;thermo're, l provide a case stu'dy of the Canada\'

Japan auto import control negotiations of 1981-82. This will 1

allow for a ~oncrete illumination of the nature of the Japan

.Canada relationship.

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B. State.ent of the Probl_

~a~an-canada' interaçtion can be traced back over

century, and diplom~tic relations have existed sinee 1929.

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spite of the potentially complementary nature of the relation-, ,

ship, however, the two nations have remained largely unfami" .

'liar and uncommul)icating neighbours aeross the Pacifie.

Exeept for the marginal aetiviti~s of Canadia~ missionaries in t

Japan and ~ small flow 'of Japanese immigrants to Canada',

commercial exchanges, although relatively modest in volume~

until re~ently, have dominated the. relationship. \

It was not

until the foreign poliey reviéw undertaken with the advent of ~

the Trudeau governnient, that the potential benef i ts of the

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. relationship were recognized seriously and consideration was

• g~ven to closer ties.

As part of the foreign policy review, a booklet entitled, ."

"Pacific: Foreign pOlioy for Canadians", was released by the . ---. ,

Department of External Affairs. (2) It 'did not contain, how-•

ever, any concrete proPosaIs for the expansion of the Japan- li

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Canada relationship. R.ather, the booklet contained 'a gene'ral

statement of the need for greater Canada-Pacifie rim interac-

tion ,and Japan was not singled out for a,ny special considera-

tion. .. .. ,4 l'O' _ 1 . - i'-

The first ~jor impetus for greater' Japan-Canada interac-

tion came in i972 wi th the announcement of, th~ third -<>ption . ~ ~

policy by Mitchell Sharp, ~ho/was then Secretary 'of State for .. , ~

Ëxternal Affairs. (3) In . response to cri ticisms that. Canada .. .. was too dependent on the U .5., he proposed t'hat, as an alter-

,nativ~ to·either the status quo or deliberate integra~ion with \

the U .5. (options one and two), Canada sho~ld pursue a third

option. The, third option_ entailea a diversification of

Canada's economic and political links, in order to create • •

count_rvailing fqrces to offset CanadLin vu).nerability vis-a-~ "

vis the U .S.: .. ,.

"The basic aim -of the third ~ option wo1:ald be, ov.er time, to lessen the vulnerability of the Canadian eCQnomy ta external fac-.

- tors, including, in particular, th~ .impact of, tlle Uni ted States and, in thé process, to strengthen our capacity to ,dvance basic Canadian goals and develop, a l'llO" confident sense of national ldentity." (4) ,

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The Europeal1- Economie Communi ty and-- Japàn .. • were natural . -.

candidates "fou the cole of couri'}erweights to thè U. s. The

Canadian government gave first priority to· Europe and suc-,

ceeded, in July 1976, in establishing a 'cbntraetual link' -v

wi th the European Co~uni ty. Wi th regard to Japan, tne/

'Framework for Economie Cooperation' and a cultural agreement

were signed in October, 1976. These steps were taken, ... ('

togetber wi th per iodical ministerial consultations, to enhance

mutual understanding through the increase of poli tical, com

mercial and cultur'al exehanges. These initiatives were partly

in reeogni tion of the fact that by the mid-19tfOs, Japan had

become Canada's second lar~est trading partner, surpassing the

Uni ted Kingdom.

In spi te of the intent~ons of federal government plan

ners, c.canada's tra~e with Japan has levelled off at around 6%

of ita total, which, although great in real terma, ia rela-o •

tively small when compared to the'70% of our trade which i8 on <

. 90ing wi th the Uni ted States. Current figures for fqrei9n

inveatment in Canada are even more strik..fng 1 Japan' s share is

less than 1% while that of the- u. S. reaches 80%. ln non-

commercial sectora, the Canada-Japan relationship is espe-

cially tenuoua. In contrast, other countries sueh as

Australi'a~ Brazil', and China, whieh have not advanced a Qelib-/ l"'

erate policy such as the third option, have develo~ed broader

and eloser relations wi th Japan. The question arises as to

why this should be thte case? Why have not. Canada' s relations

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wi th Japan grown and di versif ied to the' same extent aS.1 have

other countr ies' relatione wi th Japan?

c. Fraaework of Analysis

') Tpeories of foreign policy t;>el'1avior, have not yet ,advan~ed

to/th'e ~poirn~ where predictions of futur, events are 'possible. o _ .. '

~ , What fremains are analy.tical fr~eworks which aid the under-

standing of foreign policy behavior. Analytical frameworks

are useful in this regard because they can be used to organize

data in such a wày that a clearer understanding of the object

.of study can be achieved. As a result of their utility, 'the ~

development f)f fr amewOr ks (Le., model building) has become -

very popular and numerous Arameworltf are currently, used in

foreign policy analysis. l will, howev~r, orly refer to two

especially weIl known examples. The first is' Rosehau's 'pre-

theory' which is one of the earliest attempts to create an ,

• analyt ical framewor k' • (5) Rosenau identifies five crucial

explanato~y variabies of foreign pOlicy: 1) idiosyncratic1 2)

role1 3) governmental; 4) societal; and 5) systemic. The

firet four variables cover internaI sources and thé 1ast one

covers external sources. The major diff iculties wi th this (

framework .tare: firet, the boundaries among ,the variable , . clusters are not clearly demarcated and seçondly, the external

sources are not speoifiaally classified because no distinction

is made between interstate and globa'l factors.

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Another popùlar framework is the 'Comparative Research on

the Evètlts of NatIon' (CREON) model, C.. F. , Hermann and his associates, which attempts to develop mu.lt-i-

ca4Pal explanations of foreign policy behavio .Six vari-

able clusters are hypothesized to function togethe~ to explain

foreign policy behavior. These are: 1) personal characteris-

\ tics of ~litical leaders: 2) bureaucratie aspects of govern

ment decision making; 3) political features of regimes; 4)

national attributes of societies; 5) transi,tory quali ties of

the situation: and 6) properties of the international system.

The major difficulty wi th th~s model is that i t inc'ludes a \

policy process ~dimension of. analysis a10ng wi th the source

analysis; therefore, it is difficult to establish the intended

cause-effect relation~ Moreover, this framework does. not

clearly specify what constit~tes an external source.

In order to' examine. explanations for Canada' s réJ.ative .,

lack of success in app1ying the third option to Canada-Japan

relations, l utili .le a third model, 'The Intersta~e Behavior

Analysis Model' (IBA), which is an analytical framework devel-..

oped by J. Wilkenfeld . and his associates. (7) The framework o

contains three ft integrated sets of variables" which are the

independent " . dependent and intervening var iables. a 1

The' indel'

pendent variâbles are the source variables, or determinants'of

foreign policy behavior. They are grouped into 'variable

areas' or • components 1. (8) These are: 1) ~sycho109ical; 2)

• POlit~cal:\ 3) Societa11 4) Global and 5) Interstate.

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, -The_ intervening variables are a 'classificatory scheme of

states' and have three subdivisions; 1) economic1 2} govern-

mental; and 3) capability. The dependent variables are , t.

foreign policy events .or behavior, which are dj,vided into six

'dimensions ,': l} spatial; 2) temporal,: 3) relational; 4)

si tuational; 5) substantial' and 6) behavioral. Wilkenfeld et ,

al. argue that these, dimensions can be best understood if they

are put in the form of a .question:

wh en and in what immediafe context?

who does what, ta whom,

For the purpose of wr--iting my thesis, the entire model

need not be utili zed . This ia because the 'Wilkenfeld model -• was constructed to meet certain criteria, one of which is that

i t must be operationali zable' 'for use in empir ical research.

As a result, the model has a classification of states and a

detailed classif ication of events. Because l am providing a

traditiona'l-historical analysis of ca~~da ... Japan rel'ations',

which relies on interviews, secondary li terature and :;elected , '

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empirical data to support my àrguments, t>nly the sour-ce com-

ponents of Wilkenfeld's model are needed.

First;, 1 examine the domestic determinânts of Canada' s

relations with Japan. These include the. pol~ tical, societal

a~d psychol~g i cal component. The pr imar y focus ber e i s th~ Po

question of 'who' initfates ànd responds to the development' of'

Canadian relations with.Japan. In this study, three levels of

actora are identtfied: the'fe~eral governm~nt, the provincial /~ . 1

governments, and businésB çi~cles. With respect to the

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provincial governments, B.C., Alberta, Ontar io, and Quebec are . . ' ,

all specifica~ly analyzed. The psychologlcal component, .. although very import~t, is integrated into

domestic components (PJlitical and Societal).

the other two

TQj.s is because '.

the psychological component is difficult to' distinguish from

the interests and perceptions of the actors which are examined

in the Poli tical and Societal' sections. An anal ys i s of the

, political component will give us an oppottuni ty to assess the

impact of governments, parliament and the government bureau-, (!

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cracy on')Canada's relations with Japan. Next, l examine the

social· component, which, given the dominance of commercial

relations with Japan, will focus on the relevant business

actors involved in the relationship.

Of the external determin~ts of Canada-Japan relations, l

the· global coltlponent will be e.xàmirred first in or der te pro-

vtde an' analysis of the envi ronmental setting. The regional

economic expansion of the Pacifie region and Japan's role as a~

key nation 'in def inin9 i ts development. will be dilgcussed. , , Canada' ~ approaeh to the region will, also be examined' on a'

comparative basis from the perspective of Canada' s foreign

·policy l(ith various otner countries and eeonomie organiza

tions, including the U.S~ and the EEC.

The last of .

t:he fi ve compon~nts, the interstate compo-

nent, will be analyzed to make an overall assessment of

Canada-Japan relatio.(1s. Various ec:onomic, academic and qul-

tural facts will be presented to allow for a comparative

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analysis of _ Japan's place in ~nada's foreign relations.

Furthermore, I o'seek to assess the effects of' the va:u·ious

ini tiatives, and responses of the domestic actors involved in

trying to improve Canada-Japan-relations. "- .

Following a presentation "Of the f indings of my research,

l examine the utility of the three explanations in giving us

an understanding of ~the causes of the limited nature of . , .

Canad,a-Japan relations. The first explanation, that the U. s.

has been a major factor in limiting Canada-Japan relations,

st:resses the gravit y o'f the U.S"'s economic, political, and .

social control ovér Can'ada. The second explanation is that f

thera exists an uFlconstructive Jap~nese and Canadian. percep-

tion of each other which h;; created·tenuous channels of com, \-

munication and an imbalâhoe' between economic and non-economic

association. The final explanation is that federal-provincial ... ...1/

conflict, which is attributed to differing levels of regional~

industrial development, is partly responsible' for ,the tenuous

nature of/Canada's relations with Japan. •

In the fourth s~ction', all the explanations are tested

once more using a case study of the Eecent automobile negotia

tions in which the federal government sought to reduce

Japanese exports of cars to Cânadian markets. To conclude, I

argue that if relations with Japan are to improve, efforts

must be ma4e to address the problents which ar,e as'sociated wi th

the explanations "I)for the limited nature of -the bilateral ..l ..

relationship.,

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, 1. THE DOIIBS'r:IC ~:n1ŒMlRAII'1'S OF CARADIAR l'OREIGR POLICY

~S JAPAR --

The f irst Canadian domestic actor to be examined ls the

fed'eral gover nment. " 1 examine i ts ini tiati ves ~o improve

relation$ with Japan by v~rious transgovernmental meetings and

federally funded academic and cul~ural exchanges. Next, !

examine the, interests' of the provincial governments. At this ,

juncture "we must be careful to identify the !si tuations in

which federal polictes towards Japan are independent" comple-,~

,mentary or parallel with those of t.he provincial governments • •

<li This can be achieved by an examination of their respective

initiatives and responses to the development of each bilateral.,

interaction with Japan. " "

In this task special attention' must

be given to each government' s perception of the Canada-Japan'

relationship.

Following an examination of this 'governm.ental' campo':',

nent, 1 examine the 'societal', comP9tne;l'lt. Gi ven the manifest.o

importance of economic relations with :Japan, especially for

Br i t.ish Columbia and the other western provinces (9), and the , 1 \ op .IJ&I '

lack of tran,snatio,\al 0 ci ti"zen interaction (this theme is

developed in .Section II,B, 3), this study of the societal com-, -

po~nt focuses on-the actora and interests of Canada' s bûsi-))

ness cOllUlluni ty • It· is noted that to a great extent these . ' . interests are a ~?rt~er reflection of Can~da's regional

" cleavages •

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1. . Federal Government Q

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The offiblals in the Department of External ~f~irs that

responsible for Canada-Japan relations point .out that >,

Canada has maintained one of .its lOrlgest existing diplomatie 1

4· . ties wi th Japan. In faet, diplomatie relations were estab-

t.rl •

lished in 1929, pteceded on1y by the opening of ~iplomatie

off iees in Washington, tondon and Par is. (10) 'rhis does not

mean, however, that the bilateral rel~tionship has developed .

to the extent it has with the O.S., O.K. and France. The

immigration issue and Wor1d War II eertainly '.brought ,about a

eooling of the bilatéral' relationship in the èarly to. middle

part of this ce~tury. But the San Francisco peac~ Treaty with - 1>;.'

Japan in 1952 re-opened diploma~ic relations arid sinee then , /

Japanese ministerial level visiFs to Canada have become frequ-

entA ~t the pace of around one per" year,. For example, in 1960

Japan' s existing Prime Minister, :Shinsuke Kishi visi teo

Canada, and a year '1ater Japan's ne'wly elected P.M., Hayato , Ikeda, visi ted Canada and arranged wi th the Canadiéiln govern-

ment to hold regular .Canada-Japan ministerial meetin-gs. The

. first meeting wa~ held in Tokyo in Jalluary 1963 and involved . ,

the, then Minister of Finance, Donald .Fl~\ng as the Canadian

representative. ..

... ... r.

~--__ r_.r~~~_~~.~ __ ' __ ~.' __ , __ .~,--~--~----------~j'----~----

\

\ .)

1

, .\ , .

, '\

12.

-It is "m>t only at the ministerial level t.hat contacts

have been established, parliamentary leve,l exchanges have also

been initiated. For' example, Bouse of Commons Speaker Mme.

Sauve led a .par1 iamentary exchange delegation to Japan which

stayed from August 28 to Sep~ember 3, 1982. But these rela

tions nftlst be viewed as somewhat tenuous. This is noted by ~

Senator Van Roggen (B.C.), who points to budgetary and human

constraints . as 1imiting factors on the establishment of

regu1ar Canada-Japan parliamentary exchanges.

At the- moment (1982), direct and regular inter-parliamentary meetinq~ are held wi th 1) the 8.S. Senate, 2) NATO, ang 3-) the E.C. Par1iament. Compared ta the rJleet-ings with the U.S. Senate which are held eve* year and are very business or ien- . tate owing to the fact that the U.S. Sen te hafJ great power, the meetings with Japan are on ~n irr~gular basis, and often run out of people with sufficient knowl-" edge and' time to devote to them. Furthermore, parliamentar ians are faced wi th language differences that prevent a' smooth excbange of views.(ll)

1 At the lêveI of the government bureaucraçy, one ca~not

underesti.ate the i~portance of the trade commissioners in the

1 Depar tment

relations.

of . Industry, o (

Trade and Commerce on Canada-J'apan

In Japan, selling Canadian goods has had a high

priority and several ambassadors to Japan have, been salesm~n

in their previous careers. The Ja~n desk at the Department

of Induetry, Trade and' Commerce, which is, curre~tly in the

_ ....... _-----~--....--.~- t _ .. 41

.. '

LI'

process;t of being absorbed into thè Departmen~ of , " Affairs, has long been the agent encouraging salés of

goods to Japan •.

External

canadi~

Besides encouraging trade, federal initiatives ta enhance

b\tSiness eommunication between the two nations haV'e not been

rare. Jean Chretien, as Minister for 'Industry, Trade and

Commerce, arranged with Canadian business leaders to establ~sh

the Canada-Japan Businessmen' s Conference, which is now run

with the assistance of government and business

secretariats. (12) The Asia-Pacific Foundation was al'so initi-

ated and supported by the federal government.(13)

In the process of pursuing its o?jectives the federal

government has attracted Many people of talent, who manage to

speak, Japanese and other Asian languages. Peter Campbell and

Margaret Buber are examples of the type of young staff officer

whoâe exper'ience in the Canadian embassy in Tokyo and follow-1

Ing that, assignment in Qttawa, allowed them to properly

understand Japanese perceptions of Canada. At the senior

leveIs, however, there are fewofficials who have remained in

Canada-Jap~n relations after their stat-ioning in Tokyo because

of the government's policy of diplomatie rotation. This works

" ...... against the possib!lity of expanding under'standing and con-

tacts between the two countries. (14)

In spite of the continuation of direct government commu- u

ni-cations there );jas not been much in the way of federal \

government programs~~ ~evelop academic and cultural contacts.

. ,- -----------------"!"----' --------.

'-

14.

wqen Prime Ministers Trudeau and Tanaka met in Ottawa in ,

Septembe~ 1974, they agreed to enhance such aspects of the . bi1ateral re1ationship. One indicator that an effort was

, indeed made in this area ls the Canadlan government' s expen-

diture for cultural and academic exchanges. In 1974 the ...

Department of Externa1 Affairs spent about C$100,OOO for ,

academic and cultural exchanges wi th Japan. The expenditure

for 1981-82 was C$295,OOO, which in terms of exchange funding , is ranked third after exchanges with the U.S. and France.

Although the U.K. is ranked fourth, it shou1d be noted that ,

there are' Many more se1f-financed opportunities for U.K.-

Canada cultural and academic exchanges.

In the area of expenditure for exchanges with Japan, 11-

12% goes for academic exchanges and the rest for cultural

purposes.(lS) The trend is towards' higher expenditure for the

academic sector. In the areà ~f direct g~vernmènt meet~ .- as Table 1 ShO:S, t;hert are now mor~_~an 13 bi1ateral. consul

tation meetings ra~9ing from atomic 'energy to joint economic

'and foreign ministeria1 consultation meetings.

with this growing number of ,communication channels,

federal officiaIs tend to argue that Japan is the second most

important country for cana, r'~~~er. ~ha~ to say, as l have

argued, that the bl1atera1 re1a~ions~~p la limited. For

example, John Slone, of the oepartDÎent, o'f:ltI Externa1 Affai rs,

regards 1974 as a benchm4rk year for the bilatera1 re1ation-

ship, e~pecially wi th regard to academie exchanges. In 1974,

__ ...... _'-,., ...... " ... _____ ._ .. ~.-. _____________ 4 ____ ...... ""-_ ......... .......- . - ' "~~-"~ -------- ..

. : J S-Canada-Japan O,fficia1 Bilateral Fora ( Table 1:

1.

2.

3.

Name of' the forum·

Canada-Japan Foreign Mini'aters Consultations

Canada-Japan Foreign Po1icy Consu~t~tiona (senior-of f icer 's ,level)

Canada-Japan Aid Po1iey Consultations

4. Canada-Japan Cultural ,Consultations

5. Canada-~apan Joint Economie Committee (JEC)

6. Canada-Japan Science and Teehnology Consultations

7. Canada-Japan Governmental Fishery Consultations

8. Canada-Japan U.N. development Consultations

9. Canada-Japan Nuclear Enerqy Consultations

10. Canada-Japan Resource Proeessinq Working Group (sub-committee of JEC)

Il. Canada-Japan Canora Consultations

12. Canada-Japan Bouaing Consultations

13. Canada-Japan Businessmen's GQÎlferenee

1

Starting year

1980

1983

1979

1977

1972

1978

197,4

1981

1981

1977

1974

1978

Number of Consul tation

he1d

4

8

1 (Par is in June ''83)

2

4

5

5

9

2

3

6

5

6

15 •

--........ -."",.----------------------... ~-~-- ....... - - .... ---:r:-- -------~

16.

Prime Minister Tanaka donated one million dollars to a fund . . ..

for Japanese stq.dies in Canadian Unt"versi ties. In turn, the "

canadian" gov~rnment established 7-10 student scho1arships for

Japanese students to study in post-graduate programs in . Canada.. This trend towards academic exchanges corttinaed, and Î •

fo11owing Tcudeau's visit to ~pan in 1976, a one-year assign-

ment of a Canadian professor to a Japanese university was

r egular i zed • Former ambassador' ta Japan Bruce Rankin shares

the view'of many federal officia1s. According to Rankin:

It ls true that the post-war bilateral relationship was predOlllinantly commercial but this was' not to the exclusion of a rapid growth in non-cOtDl1lercial relations.' l thin'k it is in the non-cOlDJllercial fields that we have really seen a rapid gro~th in the pest .seven or eight years. (16)

r'

..

(

tr_ '*' • id 5 . :

. . ,

- ~ 17. "

2 •. Prov~cial Governments'

)

One of the Most important 'and central re!!li tiEfs of Japan-

'Canada relations ia the link between' in~easment, bal~nce ot ~

trade and compos·i tion of traçe. The compbsl tion of trade con-

cerna the acce~tuation by the Japanese of ~veatment and 'trade

in the natur~l ~esource sector as compared to their decisively \

,malI investment in the Canadian manufacturing sec~or and

their lack of inter est in Canada' s manufactured exports. In .

other words, Japan has accentuated or exacerbated an existing

interprovincial cleavage, in whic~ natural resource-orientated

western Canada and industrialized central Canada have differ&'

ent interests in relations with Japan.

The proposition that the. eastern prov~nces are in an

adversary relationship, and the western· provinces in a compl'i-

mentary relationship, wi th Japan, can be analyzed through an

examination of their respective provincial policies towards lt • < . ~,..

Japan. Thus, l examine the policies of Ontario, Quebec, B.C.

and Alberta which are the important provinces in relationi -

with Japan and w~ich have decidèdly differing provincial

interests in their relations with Japan.

a) Ontario: \

- To begin with, Ontario is. act'j;ve internationally in the';, ~ - -

, pursuit of its interesta. Ontario· maintains ah extensive

4Y;'t," \

f ------------~-·"_.--------------_~4_"~'~I_i ________________ ------------______ __

, ,1

,

18.

network of provincial 'trad~ office) around the glotte, It has •

a trade off lce in Tokyo along wi th othe-r trade offices in New .....

York, Chicago, Los Angeles, Dallas, Atlanta, Frankfurt and

Hong Kong. Offices in Brussels and Paris ,have slightly

broader roles, especially in the area of expanding cultur al

relations. They_come under .the auspices of the Intergoyern-~ '.

JIlental Affairs Office. (17) But the London office has the /'

br,oadest mandate of aIl and compar ed é'o 1 t, the Tokyo off ice

has a fairly low pr iOI i ty.

As an organi zatlonal networ k, trade off ices come under

the control of the "Ontar io Ministry of Industry 'and Trade,

which has several functions. First, it encourages Ontario

industr ies to export. Secondly, i t seeks to promote invest-

ment, licensing arrangements and jOint ventures with foreign

businésses. Thirdly, especially with respect to Japan, it

encourages foreign enterpr i ses to establish f plllnts in J

Ontario. (8) Historically, Ontario' s main' interest in rela-. tions with Japan is the first of these objectives, the expan-

sion of manufactured exports. Recently, however, the third

objective ha's gained in priority, especially with respect to

auto production. ...

In expandin9 - Ontario's trade, Japan could play an impor

tant role. Although the U.S. market accounts for 'about 75% of

Ontario' s foreign trade and Japan less than 1%, there are 237

Ontar 10 companies that export to Japan. (19) ,

In 1982 Japan

exported C$242,OOO,OOD worth of goods of Japan. Therefor.e

.. ~ ...... ---.. - -- ---.. --_-________ . ....-....-~"",oA_ ... ___ 4.__----·~-'"-·-·---_._-_._-_ ...... ~----,

\.

(

.

..

/

19.

ontario has a one-sided trade defici t .with Japan which the

provincial' 'government intends to have reèuced through an

increase in manufactured exports to' Japan. Raymond McCaque,

'the ofeicial resPi'nsible for trade wi th Japan in the Ministry

of Indus-try and Trade, notes the importance of Japan for

Ontario industry and argues that the federal government does

no t' share Ontario's concern for increased exports of manufac-

,tured goods: .r (-

.. Manufactured eJÇports have decreased in Canada 1 s shar.e of the worid trade and the fact tbat the federaI govel"nme.nt 'is taiking mainly of naturai resource exports is unacceptable to Ontario. l;tore e)Çports is the answer lto a r-enewal of' Ontar io' s manufacturing sector' .. '· "Because the Canadian Embassy in Tokyo is so busy, Ontario 1 s trade off ice, in: Tokyo has ~o play the trade promotion ro1e for ontario 1 s enterprises, p.articularly srnali and· medi um sized ones ... ( 20)

r "

He also explains why Ontario needs an office in'To,kyo, -while ,~

B.C. does not:

B.C. does not ~ave ~a",f, staaii bus r nesses so la dlfferent tyt>e of government invoive-' ment 1.s requir,ed~ B'.C .• has hU'le projects. For exampl"é, coal field development pro-jects need the- ·B.C. government and the' federai government involvement as a direct contractor .. 0; suppOrter. On the other hand, Ontar!:i8' has te:) aècumulate exports of small ànd medium sized enterprises which

.need ·specJ.fic marketing quaI! ty and licensing information. 1 Since Most of these companies dG not have off ices in

...

- 1 ---- ----,- - ------.~' ......... -.-----------~-----~ _ .......... --...l _______ ____

\

'l'okyo, the provincial government must' provide the opportuni ty to do husi.ness wi th the Japanese. In fact, the Ontar io. trade office in Tokyo employs t'wo Ja-panese specialists, one in the automotive sector and the other in electronics. (21)

o

20.

McCaque also suggests that, as far as trade promotion is

concerned, Ontar io ha~ the strongest provincial off ice in ~

Japan. For example, the 1982 Ontario~Houseware Show was a big

success and had the largest buyèr turnout. of any trade ,show at

the Canada Trade Center in Tokyo that year.

ô) Quebec:

Quebec maintains a Déi~atio'; Glnérale du -ouebec in Tokyo

called the Maison du Quebec. Compared to the other provincial

offices in Tokyo, the Quebec office acts most ind~pendently of

the Canadian Embassy; which perhaps reflects the ideology of

the current piov~ncial 90~ernment and Qu~bec 1 s histor ical ten

dency to purslle an independent ,path.

"-Commercial relations were not a major, part of the Quebec-

Japan l; relationship until recently. F..rench-Canadian missiona-• . . ries have lived in Japan for a long' time and have established

a number of noted educational institutions. (22) More recently,

-0 Canada aljld Japan took turns hosting the world 1 s fai r, f ir st in

Montreal in 1967 and then ln Osaka in 1970. Consultations on

logistical problems involved, in the undettaking of t'Wo such

'.

21.

major projects provided an oppor,tunity for contacts between

Quebec and Japan. Th~s gave a needed • impetus for further

interactio'h, particularly .in the ~ommercia1 field ~ (23J

The establishment of the Maison du Queoec in Tokyo in

1974, which. was beaded by Normand Bernier, former deputy com-• 1 •

missioner-general of Quebec's pavilion at Osaka (24)" has pro-

vided the institutional context to explore the potential for

increased commercial re1ations.- Quebec exports' to Japan

tota11ed C$42,372,OOO in 1982, which amounted to 2.7% of

o-uebec' s total exports abroad .. and 9% of the total of Canadian

expo'rtsC

to Japan. (25) With an exception in 1980, Quebec ha~

had a trade deficit with Japan although it is not as large as

Ontario's. japan ranks fifth in trade volume among Quebec's i' trading partners after the U. S., West Germany, the U.K. and

France.

Pierre Fortier, Director of Asia and Pacific "Affairs in

the Department of Intergovernntental Affairs expects an upward

t:rend in trade vo1um@ with 'Japan to continue, and Japan to

increase in importance for Quebec' s ext'ernal trade. He argues

tha't this will not' come e~sily because "Quebec politicians' and ,

bureaucrats still look 'ta the U.S. as a key nation with whlch

Ouebec must enl~rge its l!conomic relations. Only a few think

Japan w~ll become more important for due bec • s trade ,:ela-

tiens. n (26)

Fortier a1so criti-cizes Quebeckers for their inad~quate

unde~standin9 of Japan. 'On the other hand, he notes that a

- -----,-------- - - ----~. "_.~---~ .... .....-.---.. .. ----- ..... _-- ~_ .. -......... __ ....... - ~ - ~----~ .. -

~

.l - .. --'

22.

growing nurnber of Japanese businessmen and consular officiaIs

in Montreal are communicating in French to facilitate their

economic relations with Qûebec. He argu-és that the French

language is becoming indispensable for Japanese businessmen ,

when they come into contact wi th local OQ.ebec compani es. He

asserts that to the extent that the Japanese learn about the

French milieu, Quebeckers should also learn about the

Japanese.

Concerning the question why Qu~beckers have a better

understanding and knowledge of China than of Japan, Fortier,

refers to a book entitled: Missionair~s Canadiens-Francais, ,pA'

wr i tten by Lionel Groulx, ta support his view th'at the return

t Q b f .. i' f o ue ec 0 numerous ml SSlonar es a ter the Chinese revolu-

tion in 1949 ensured that Chinese studies wauld be a central

preoccupation in Quebec's academic circles.

portier t""

According to

A su~stantialo nurnber of Quebec missionar i"es went to China and spent Many years t~re before they were forced to return to ~nada following the revolution of 1949. Goming back to Quebec, they engaged in academic research and encouraged people to learn about China. ~t the sam~ -time, there were relatively few Quebec missionar ies that went to Japan. Those that remained there have not returned to Quebec, thus giving little impetus for Japanese studies in Quebec. (27) ,

r

} "

\

...

1 -

23.

c) British Columbia:

Given the substantial tlow of trade across the pacific

between B.C. and Japan, it appears_ strange that B.C. does not

maintain a trade office in Tokyo. Japan regularly purchases

20% to 25% of B.C.' s total exports, which in turn could

account for a's much as 50% of CanaçUan exports t<? Japan. (28)

John McKeown, àn assist"ant deputy minister . of industry in

B.C., points out two possible reasons for this.' The f irst is

that the Canadian Embassy in Tokyo provides suff icient ser-

vices for B.C.' s interests in Japan. B.C.-Japan relations

have developed t~ the point where one provincial office with a

few statf stationed in Tokyo could hardly handle the growing

number of commercial and p?litical deals being worked out

between the two countries,. In other words, even if B.C.

opened an off ice in Tokyo, i t would not add muc,h to the ser

vice already provided through the Canadian Embassy. 'The

result would be a waste of the. taxpayer' s money. A second

factor is the geographical proximity of B.C. to Japan. There

are direct flights between'Vancouver and Tokyo every day. In

fact" B.C. officials visit Tokyo so·frequently that a laç'k of

communica~ioq ls simply not a concerne (29)

Perhaps this style of communication works 50 weIl beca~se

B.C.-Japan trade ls often characterized by huge resource . ..

deve~opment projects whlch require extensive and direct trans-

governmental relations. If B.C. had as Many gen~rally small,

10

/ /

24.

export oriented enterprises as does Ontario, then a trade o ,

office might be ûseful. /'

For the future, B.C. do es not view the bilaterai rela-

tionship as .limited. On the contrary, Japan is viewed by B.C.

as a' crucial economic partner whose importance for B .C. 's

economy is likely to grow. A recent provincial study states:

Japan" is now in ,the process of transforlDing i ts economy to adj ust to higher energy COfJts and increased competi tion.- Therefore,. B.e. 1s now aiming to bui1d a resource-processing base for Japan while at the same time guar anteeing B.C.' s r ight of access to' low cost energy and a diversified resource, base. (30)

,d). Alberta:

-. -Aiberta has maintained a trade office in Tokyo since

1970. The necessi ty for such an off ice is explained by the

fact that Japan is Alberta '8 second largest foreign trade

partner 1 after the U .S. (31) In 1981, Alberta export:ed approx

imately C$732, 2~0 ,.000 worth of goods to Japan, 60% made up of

agricultura1 gooâs and.25% of coal. 'As with B.C., one of the

underlying factors for these exports ia the geographical pro~

ximity of Albèrta to Japan (in comparison to Europe). It

costs less to ship Alberta wheat to Japan 'th~n ~o Euro~e. In

fact ,) one-thlrd ,of t'he western part of Saskatchewan and 'a11 of

AJ.berta hard1y export any wheat to Europe, sending - i t instead

to. Pacifie Rim countries inclucUn'g Japan and. the USSR.

___ ~ __ ........ _____ M- __

~...,.....-------" ... --.--..,--....Ç-~-.-.---------"'''-- --_._-~.---- -

,"

25 •

. A unique feature of the Alberta-Japan rel~tio~ship can be

seen in the 1972 Proclamation of. Friendship and Affiliation "

between the province of Alberta and the island of Hokkaido.

This developed' out 'of the realization that both Alberta and

Hokkaido are located in a northern region a,nd share a similar

sta.ge of economic development. (32) A tangible result of tilis ..

agreement i~ that Most of ,the Japanese students studying in

Alberta are 'from Hokkaido through a gÇ>vernment scholarship

program.

Japan' s greatest interest in i ts relations wi th Alberta

ls in the area of resource exploitation. Over the years

Al.berta has attemp\.ed to move to a posi tion where i t can con

trol 1 ts resources and ,alsO gain the maximum advantage from

Japanese investment in Alberta' s petrochemical. industry, ail

recovery projects and/.oil sands (fevelopment. This does not 1

upset the Japanese ~cause they tend to prefer ta be minority 1 ~

shareholders in f reign corporations. Thus, compared to

Amer ican investm t, Japanese investment g1 ves , Alberta 'more .

automony over i s natural -resources. (33) In this sit:~ation,

Alberta can b viewed as in

gr'eater JapaJse investment.

tion carl a~iect the federal

competition with B.C. to attract "

"The fall-:-out from this competi-

government. For example, a case

could arise in wJ;lich an. officer of the Fore,ign Investment

Review Agency (FlRA) faced ~ di~pute between two provinces,

for instance if a Japanese corporation wanted to invest more . money and create greate~ employment in. one province to the

detriment of another.(34) , '

/

.~----.- . "--~""""''''-----''''''.'''''''''' . .,

, ,

26.

Overall, the trade promotion role is carried out by bath

the federal government and all the provincial governments. A }

si tuation could develop, however, in which the indu~trial and •

trade pollcies of the two levels of government overlap and

this sometimes leads to conflict. (35) In terms of communica-

tion channels available to provincial governments witn the

federal bureaucracy, Ontario appears to have the easiest 1

access\to Ottawa but this does not insure Ontario's victory in

cases c)f interprovincial conflict. Furthermore ~ as will· be

shown below (IV,B,l), there are structural problems. in

Ontar io' s eco,nomy which weaken i ts bargaining potential wi th

Japan and othèr provinces. Its' majpr political strength is

that i ts interests are - often the same as the Liberal federal

gover.nment' s because they both must retain the support of

sQuthern Ontario vot~rs to remain in office.

B. SOCIAL COIIPOlŒlIT: Business êil'é!leB

From the mid 1970s, business circles have cpme to pro'vide

an organic network of communications between Canada and Japan.

Partly this is a result of t:he creation of the Canada-Japan

Businessmen' s conference in 1976 which has provided ",,-an oppor

tuni ty for business people fram both countr ies t-o associate

and develop business, contacts. The initiating body of the , . \

Conference, the Canada-Japan Business Cooper~tion Commp,tee,

,

" .----....-___ .~_" ........ " . ...,..--rJ-'---------~·-'-:-..........--... --.-~-----.~~ ·

Q"

27. c

was established in 1977 " to organize a series of conferences.

This initiative" has gained great credibility and similar com

mittees have been established in Canada to develop relations

with other countries including Korea (1981) and France (1982)

(there ia also a committee in the process of being establisbed

wi th India). (36) In the f irst meeting of the Canada-Japan

business Cooperation Commi ttee held· in 1978, the Chairmim on

the Canadian side was David Cul ver , the President of Alcan:

'his Japanese counterpart was Hisao Makita, Chairman of Nippon

Kokan. If i ts continued existence is any measur e of success

then apparently the conferences have' met with sorne success.

Thus far they have been held six times, the Most recent of

wh1ch was in Kobe (May, 1984).

The or igin of the conferences can be traced back to the

·1976 Japanese industr ial and banking mission to Canada, which

was headed by Makita. (37) In response to the delegation's

f indings and reeommendations, Jean Chretien, federal minister

of Industry, Trade and Commerce, urged the Canadian business

community to play a greater role in the pursuit of trade réla

tions with Japan. One might ask why business leaders wai ted

until Chretien urged them to form an organi zing body. Er ie

Trigg, an executive of Alean responsible for Japan-Canada

Relations, argues that, gi ven the manife,st importance of trade

with Japan this might be attributed to the geographic reali-

ties of Canada and Canadian business 1 tradi tional dependençe ~

on government intervention to- support their,' interests •

. -_ .. - .. - ._~--_. -_ .• -._., . ," .. -----_.~ ~ ._- "_' -_.~ -~-----.., --_.. ... --. --- -

. '

Business commun~ies are widely spread across Canada ana it is a difficult task to guide sever al geographically separated communities in one d~rection. Furthermore, because of our history, the federal initiative to establish the conference was easily accepted by the business community. (38)

28 •

Since the inauguration of the annual conferences the Japanese

side has maintained a secretariat at the Federation of

Economie Organizations in Tokyo, while the Canadian s.ide has

maintained three branches of a Canadian secretariat at the . Canadian Export Association (Ottawa), Alcan (Montreal), and

the Department of Industry; Trade and Commerce (Ottawa).

For the first couple of conferences, B.C. and Alberta

sent a fairly substantial proportion of the representatives

which perhaps reflectéd their econornic interest in Japan. But •

at the latest conference in Montreal, only 18. 4%. were from ~

B.C. and 17.7% were from Alberta. On the other hand, 45.4% of

the Canadian r'epresentation were sent by Ontario and 12.8%

fram Quebec. (39) Thus, the Canada-Japan Businessmen 1 s

Conference has not only grown to ,be' one of the major forums

"" for communication between the two nations but; also i t has

become a means for expressing the diversity of regional

interests.

Two other fora for Canada-Japan communication are the

Pacific Basin Economic Councills Canadian Committee (PBEC) and ,

the canadian Charnber of Commerce in Japan (CCCJ). The former

is the Canadian wing of the international Pac1fic Basin

)

,

29.

ECOh~~ic Council which holds an annual conference to discuss a

variety of, issues that commonly affect countries in the

Pacific Rim. As the number of participating countries to this

conference increased, which reflected the potential benefit of

community membership, Canada's participation also increased

with greater representation from the~ eastern provinces. The

Canadian Committee maintains its office in the headquarters of

the Canadian Chamber of Commerce in Ottawa. According to

Lornè Sei tz, who has long been the Director General of the

Canadian Cornmittee, Japan is Canada's main competitor in the

f ield of exporting manufactured goods and selling éommunica-

tion, transportation and exploration ski Ils . In Australia,

Canadian expertise in the development of natura1 resources

s.uch as coal, iron and other mineraIs is employed, but it

faces stiff Japanese competition. (40)

The Canadian Chamber of Commerce in Japan was organized

in 1981 and has about 100 member companies in Japan. (41), The -Canadian Chamber of Commerce has similar affiliated organiza-,

tions in London, Paris and Mexico City, but the CCCJ in Tokyo

has been especia11y active. _Recently, it ·held a symposium on

Canadian business law with a focus on FIRA's application pro-

cess (Tokyo, April 1983). The symposium was held amidst

cri ticism that FIRA had àn allegedly excessively complicated

investment screening procedure. It was reported, in the

Toronto Star, that the direct explanation given by FlRA' S \

director general, L.F. Drahotsky, to the sympos i um ,.

- ---- .-----~._---- -_. - ---~-_ ............. _--- ,--~- .. "------,-----

30.

significantly reduced _Japanese doubts about the FlRA pro-

cess. (42) If so, this ls a case which shows that a direct

presentation and discussion of potentially divisive 1

issues

within a body such as the CCCJ can reduce Canadian-Japanese

misund~rstandings.

Another forum that could create opportuni ties for busi-"

ness communication between Canada and Japan is the propo~ed

Canadian Asia-Pacific Foundation. The founding commi ttee is ~

chaired by John Bruk, who si ts on the board along wi th three

other members: they are Huge Stevens (Canada wire and Cable

of Toronto), Eric Trigg (Alcan of Montreal) and Robert Rogers

(Canada Harbor Place of Vancouver). (43) The foundation is

expected to be project-oriented in. the fields of economics,

trade, education and culture. This differs in orientation

from the PBEC and t~e CCC", whic1) are- policy or service

or iented and specifically directed towards serving the needs •

of business.

Canadians are only now recognizing the importance of

Japan for Canada, according to Bruk. By the time they woke up

to it,~ importance, other countries, such as ~ustralia, had

already establlshed a comparable foundation for Japan. Canada

was a little late in this regard due to the faet that it has

many other opportuni ties for ""close international relations. ,,-'" .

For example,<> Canada could seek Close( relations with Europe, -

the Oo?" and other pacifie eountries. Austr~lia does not have

as many opportunities and, with its geographical location, has

-~._'''~. ----------------,..., .. --- --, . - _ .. __ . .- ---~---1

31.

concentrated its energies on deve10ping its relations with the

Asia-Pacific region. (44)

The major difficulty in organtzing and operating such a

foundation in Canada, according to Bruk, arises o

from 'the

diversity of interests that each region of the country brings

to its association with the Asia-Pacifie region. t

To do my jOb l have to visit ten provincial offices and each, business community in the major cities. Only then can l negotiate wi th the federal government. To gain unanimous support from a1l these actors is a difficult task compared to that of my Japal)ese counterpart who h-as Most of the central poli tical, business and cultural leaders wi thin easy reacQ in Tokyo. (45)

The problem of policy coordination ls not endemic to

Canada, however. It can be said that although the Japanese

are geographically united, communication between different

segments ,of society, such as between business circles, the

legal and academic profes@ions, is weak.· This could prevent

the overal1 coordination of Japan' s relations wi th Canada and

therefore work to Canada's advantage.

)

---------- ~--j

. - ---

/

32 •

• II. '1'IIE BXTBRRAL DETERMINANTS OF CARADIAR FOREIGN POLICY

TOWARDS JAPAN

A. '1'IIE GLOBAL COMPORENT

1. The Rise of the Pacifie Basin

Canada faces four fronts: the AlÛantic,

Pacific. J .B. Brebner argued in 1945 that living with, the

U.S. while retaining an European tie, ma!n1y with they.K.,

has been the traditionëÙ Canadian approach to foreign re1a-

ti Otfs . (4 6 ) In spite of Canada' s important and histor ica1

links with Europe, the Atlantic front has been shr inking in 1

importance over the years. 'leteanwhilè, the U.S. has signifi-\...,.

cantly increased i ts prominénce in Canéda' s import and export

statistics. A major factor in the dec1ining importance of the

European link was Britian's" entry into' the EEC. But Canada's

perennia1 interes t in creat i ng· counterweights to the U. S. d id fl.,

not die, and, as we have seen, ef forts were made in the mid-

seventies \ . ,

to r È!Vl ve the European tie and to seek other

counter~e1ghts .. It was dur 1ng these years ~hat the Pacif ic

front was going - through a' per iod o.f profound change character-

ized by signif icant economic advancement".. Unfortunately,

Canada was 1ate to recognize th'e deve10pment of the region and

to seek association in order te f il1 the gap left behind by

the decline in trade with the Atlantic front. , t

---- ----- - -- --~~-- ~ _# ---- ,-------~---_.- ....

-.

33.

1 Since the early si xties, the Japanese economy has grown

~apidly and has recorded the highest growth rate among

-industrialized nations. It has also become the 'engine' of

economic development for the whole Pacific region. It is no

accident that the upsurge of the so..!'called Newly Industrial

ized Countries ,(NICs) is almo.st totally a phenomenon of the

western Pacific region (Brazil is an exception) • South Korea,

Taiwan and Hong Kong aIl can be seen

Japanese patt'ern of industrialization.

ta have ~

followed \.

th

At the sarne time the

resource r ich ASEAN countr i es have -;' taken advantage of the

increased prosper i ty of the region and have expanded trade

" among the member countr ies and wi th other Asian countr i es,

especially Japan. China, which has long been neglected in

trade terms by ~eighbouring countries, has shifted its

economic policies and is now pursuing a course of industr ial

and scientific modernization. This is partly being achieved

by strengthening its economic ties with Japan and, to a lesser

extent, with other Asian countries.

Austral ia and New Zealand, Canada' s trad i tional fr iends

in the area and with which it has common colonial and cultural

her i tage, have moved to participate in this burgeoning

economic zone. As~ the Australian and New Zealand cases show,

the 'western response' to the rise of the Asia-Pacific region

has not been 'homogeneous. For e1xample, Austral ian exports ta

the region accounted for 52.7% of its total exports in .

1979. (47) Moreover, Japan ia now Australia's largest trading

--.. .---_-~~-------_-......_--------- - ~

. ,

34.

pârtner. A relatively wider acceptance of Asian languages,

especially Japanese, can, now be'seen in Australia, thÎs being

but one manifestation of th~ closer association with Japan and

the, region as a whole.

In recQgni tion of the economic importance of the two

countries for each other, Australia and Japan concluded a

Basic Treaty of_ Friendship and Cooperation on July 21, 1977.

This signalled the development of a full-fledged bilateral

relationship. (48) TC achieve this high level of cooperat.ion,

both countr ies made use of academic resources. Prof essor

K. Kojima, the Japanese initiator of the Pacific Community

concept, maintains that with time there could come into exist-

ence a Pacific versior of the EEC. (49) John Crawford and

Peter Drysdale, both ~ the Australian Natiçna.l Uni versi ty,

have also been instrumental in the development of multi

lateralism in the Pacif ic region by ini tiating a number of

feasibilit,y studies of the pacific community concept (in

collaboration with Japanese scholars) . (S~)

In the last three decades the European pr esence in the

Pacific region has b~come less influential as the military,

economic and political fortunes of European countries bave

de~lined in relative terms. Although the U.S. now pla ys many

of the security and political roles which European nations ,

used to play in the region, its specifie commitment t"O the . regional economic commun! ty is suspect beeause of i ts global

eommitments. In a background s'\:udy paper on Canada and i ts

"'~R _____ -":'--____ ' ________ "" '7~ __

"\

35 •

.. relationships to the Pacific Community, Hay and Price suggest

that the American involvement in the Pacifie community concept~ ) •

is 'remote' or in other woràs 'reserved.'

C'

2. The pacific and Canadian Foreign Policy in the Trudeau

era:

Canadian perceptions of the Asia ... Pacific region shifted

greatly wi th the" major international economic and poli tical

changes that took place in the sixties. Ther e arose a

recognition that much of the free world was receptive to

Canada's desire to diversify its relations after Europe could . no longer be considered an adequate counterforce to Canada' s

dependence on the United States. The ini tial step was taken

with the election of Pierre Trudeau as Canada's Prime Minist~r

and the next came in the form o~ foreign

conclusions of, the review were \eleaS~d, inj

six booklets entitled A Fo"reign Policy"":for

policy review. The

1970 in a series of

Canadians. One of

the booklets analyzed Canada's relations with the Pacifie

region. It identified the need for a greater economic, social

and politieal association with nations in the region, but .

failed to provide any concrete measures to advance this objec-

tive. This cri ticism was not direeted solel:y at the Pacifie

region bookle1:1 l

it was voiced with regard to aIl the regional .... , studies. But the booklets did signal an important shift in

foreign poliey orientation. In a recently released analysis

---.-----

36.

of Canadian foreign policy, entitled Canada as a Principal

Power, John Kirton and David DeWitt remark that one of the

major changes observed in the forei91l policy review was that

Canada's foreign policy approach shifted from what the y

describe as a 'liberal internationalist' approach char acter-

istic' of the Pearson era, to one of 'neo-realism.' They

define neo-realism as an approach in which the advancemenç of

the interests of the country is the first consideration in the

development of a govetnment's foreign policy. (51)

One of the major criticisms leveled at the review was the

fact that there was no explicit examination of the Canada-U.S.

relationship. In 1971 the need for a specifie policy to

address Canada-U.S. relations became clear after the so-ca11ed

'Nixon shock', wh en the Nixon administration imposed a 10%

surcharge on aIl imported 900dà irrespective of the country of

origine While the U .5. is far and away Canada' s largest

trading partner and Canada was severely affected by the sur

charge, utilike previous circumstances Canada was unable to

gain a speoial exemgtion. The refusaI in 19.71 brought about a

realization that Canada could no longer depend on the u.s. to

treat Canada as a special case (Le., as having a 'special

relationship') • It was at this point that Secretary af State ""'!

for External Affairs, Mitchell Sharp, aàvanced his 'thi~d

option policy' which was released in a special edition of

International Perspectives (October 1972). \

~----.------------.~.---------------

..

/ 1

Whether the third option policy would succeed or not

depended on how the European Economic Community and th~ United

States reacted to i t. Ross Campbell, fOr'"mer ambassador to

both the European Economie Community and 3apan, remembers how

the third op,tion was put intol i ts specifie wording through an

exchange of views among senior diplomats in the Department of

External Affairs.(52) Initially to be directed at Europe, the

aim was to draw Europe 's, attention to Canada at a time when

countries in western Europe were absorbed in the pOlicles of •

regional Integration. According to Campbell, the European

response to Canada's calI lfor an intensified relationship was . one of reluctance and confusion. (53). John Schlegel made' a

sirnilar observation of the negotiation. process between the

European Economic Cornmùnity and Canada which eventually led to ,

the signing of the Framework Agreement for Commercial and

Economic Cooperation in 1976 (Oftert refered to ·as the 'con-

tractual link') .(54) .<>

, Nevertheless,. it rnight b~ argued that Canadian efforts to

achieve closer tles wi th Europe wer e not fru! tles!;. Sorne have

argued that the contractual link was p. step towards a closer

tie. According ta Allan Gotlieb and Jeremy Klnsman, expanded

trade. with certain ·countries like West Germany has, to sorne

extent, cqmpensate4 for the gap left in the , trade figures

after Canadlan exports to the U.K. declined following its

entry into the EEC. (55) But this ~a~~sis, l w:ould argue,

understates the damage done and overstates the benefits of the

\

_.~

38.

1 •

.. coptractual link .• In fact, the European Economie Communi ty

~as been very reluctant to grant Canada a special status which . .. 'would mean, in practical terms, a lower tar iff than would be

applicable to other non-EEC nations. By this criteria the' (

contractual link is not a substant~e arrangement for a

'special' trade relationship with Canada.

In spite of Canadian's strong feelings about their

historical and cultural ties with Europe, Canadian negotiators " came to face the fact that their count;erparts in Europe did

not hold an equally intensive sense of closeness, or at least

that they were constrained by the eco~omic and political

requi~ements of a common trade policy. (56) 'f

While sorne diplomats were seeking an accord with the EEC,

parallel negotiations were underway with Japan. But in keep-

ing wi th the prior i ty g~ ven tOI Europe, Japan was forced to

wai t until the European negotiations were complete. It took

three months after the signing of the\'contractuad. link ebetween

Europe and Canada for a cultural agreement and a Framework for

Economie Cooperation (often refered to as the 'framework

agreement') to be. worked out and signed between Canada and

Japan. The signing took place in October 1976. Wi th Japan', ;

Canada has had no colonial experience, and the bilateral rela-

tion has been free of this' histor ical impediment. Further-,:pi

more, Japanese investment in Canada has tended to be in the

form of joint ventures with the Japanese acting as minority"

shareholders. 'l'hus Canada could' f ind mer i t in encouraging ..

Japanese investment in contrast to American or European. (57) ..

l

..

39 .

.. But Canada did not appear to take i ts own third option

initiative with Japan seriously. Soon after, signing the

framework agreement, Canada placed an embargo on the sale ,of

ur anium to Japan in order to force i t to, accept a nuclear

safeguard treaty. According to Frank iangdon: tJ

The timing of the embargo was particu1arly inconvenient for Canada i tself, which had just managed to negotiate special agreements with both the EEC and Japan for c10ser economic cooperation. They were the culmination of sever al .years ot effort to reduce dependence on the United States by enhancing ties wi th Canada' s other two principle trading partners. The prime minister had gone to Japan in October of 1976 to 4 sign the Framework for Economie Cooperation only a few months before the uranium embargo was imposed, and ,apparently the incompatibility of the two po1icies did not occur to him. (58)

Essentially Canada had lost credibility in Japan. This

credibility was already weakened by Canada's hast y imposition • of soybean export controls in 1973 (59) and by disputes wi th

Japan over fishipg rights and tr~de in textiles. •

It is generally-conceded ~hat the third option policy has

not been a success. Ross Campbell agrees with this assessment

and suggests that the policy may have fai1ed for two reasons.

First, it was launched at an unfortunate time, just before the

1973 oil crisis and start of a recession. Eventually, the

recession became an excuse for the failure of the policy,

which further reduced hopes for its success. Seeon~Uy, both

--------.-----_ ... _ .. -~~ - ~ , .. ,..--_-..~- .. ~- "'-~-- L

40.

-foreigners and Canadians became cynical about the pQlicy and

the third option was denouneed as a political gesture to

improve ~he fortunes of an unpopular government. According to

Frank Langdon, following the signing of the framework agree

ment' and the uranium embargo, Japanese leaders "Suspected that

they were being subjected to some form of elaborate pub.licity

stunt."(60)

Another explanation of the failure of the third option,

which is not necessar ily consistent wi th Campbell' s, is ~hat \

the expectati(;ms for the policy were too high. The contrac-

tuaI link with Europe, for example, was meant only as a begin

ning of a dialogue and not' a final agreement. The problem was

that Canadians perceived it as a solution to Canada's economic

problems. ~ When these problems grew worse in the late

seventies disillusionment set in.

Related to the problem of rising expectations is the fact

that the third option emphasized relations with Europe, and

prqponents like Campbell became disillusioned when ' Europe "

proved unrecepti ve to Canadian overtures.. Campbell partially

attr ibutes Europe' s reluctance to enter into close relations

with Canad~ to their feelings of superiarity. Accarding to

Campbell, "Europeans look down on Canada and don't take Canada

seriously due to the fact that Eurapeans colonized Canada. As

a result, relations with Eu~opeans tend ta be static.'(61)

Even had the Eurapeans been receptive; Canada may not

have improved i ts economic posi tian substantially given the

, ---

. 41~

recent weakeness of the European economy. It could have been

a matter of Canada backing the wrong horse.

- ( ,

• $ lA -~---

•

\

42.

B. TBB INTBBSTA'n COMPONBR'l': CANADA-JAPAR RELATIONS

Having disC'ussed the interests of Canada' s governments

and business groups in Canada-Japan relations-"and the inter

national factors affecting the development of Canada's foreign

policy, l will now examine, on a comparative basis, the .

bilateral aspects of the relationship. This will include an

analysis of various areas in which there are flows, exchanges

or interdepend~ncies. The area·s examined are: 1) communica-

tion flows; 2) academic relations; 3) tourism and lmmigration;

and 4) commercial relations.

1. Communication Flows

There are several indicators available to measure the

extent and nature of communication flows between countr ies.

Among these are the number of telephone cal1sJ letters and ------: te1evislon 'programs which are exchanged. In order to gain an

insight into the relative position of Japan in these communi

cation flows,' l compare-the figures for the Canada-Japsn dyad

to those of Canad-U.K. and other ,dyads:

First of aIl, in the case of ove.rseas telephone calls,

the nwnber of calls from Canada to Japan (from April 1982 ~o

February 1983) was 255,000 while the number from Canada to the , .. U.K. was 3,557,000. This means that Canadians phone the U.K.

about 14 times more often than they do Japan. (62) According

"

J

43 •

. to ~igures obtained from Teleg10be Canada, the nine, most fre-

quentf"y cal1ed foreign nations are the U.K., France, West

Germany, 1ta1y, Greece, Jamaica, Netherlands, Switzerland, and

Hong Kong. (63) Japan ranks far down on this list of nations.

If we di vide telephone calls into residential and business,

however, we discover that business calls to Japan rank weIl

ahead of those to Hong Kong. This is an important statistic 1

because i t indicates that 90% of the phone cal1s from Canada

to Japan are businèss related, while, for aIl nations, busi

ness calls account for only about 30% of the total. In

at>solute numbers of business calls, Japan ranks 7th, which

indi~ates, along wi th statistlcs on calI destination, that

communication flows between Canada and Japan are predominantly

business or iented. Of cOl:lrse the tact that there i5 such a

small number of Japanese immigrants in Canada also contributes , .

ta the 10w number of' Canada-Japan residential 'telephone calls.

The reason why there are so few people of Japanese extraction

in Canada is exa~ined below (Section II,B,4). ,

In the case of letters, the pattern of low communication

f10w ls once more exhibited by the volume of surface and

alrmai1 measured by weight. (64)

in 1981 are:

From aapan to Canad

From Canada ta Japan

The figures for surface mail

From the United Kingdom f Canada

115,882 kg.

60,437 kg.

1,495,112 kg.

l

..

J

44.

From Canada to the united Kingdom 3'83,994 kg.

These figur~s show that th~ Japanese. s.end twice as much

surface mail to Canada as CanadiilOs send to Japan. But the

total volume is only about one-thirteenth of the flow between

Canada and the U.K. In the case of ai rmail, the sarne basic

relation is shown:

-From Japan to Canada

From Ca,nada ta Japan

From the Uni ted Kingdom to Canada

From Canada to the united Kingdom

t

70,288 kg.

50,943 kg.

516,113 kg.

473,631 kg.

As was ~he case with surface mail, there is a great deal

more airmail moving from Japan to Canada than from Canada to

Japan. There May not be any single reason for this, however,

because as Paul Tetreault expIai ns, Canada is a net-importer

of mail with almost aIl other nations. (65)

Regardless of the balance of let ter f10w between Japan

and Canada, the important fact remains that Japan sends far

less mail to Canada than does the U.K.

In the caee of te1evision programming, the third area of "

communication f1ows, few Japanese programs. appear on Canadian

T. V. This ia part1y attr ibutable to government regulationa

because the eRTC requires that 70% of CBC broadcasting be

Canadian made, and 60% of the broadcasting of the other T.V.

.-.------- ------.,.---.,......-------_ .. ,--_ .... _ ..... _ ... _-,-.f

l

" ,

-

45.

broadcasting corporations. Of the 30' foreig.n made programs Il

on the CBC, the majority are American. (66) For examp1e, in \

1977, Canada purchased C$50 million ~orth of Ame~ ican pro-

grams. In 1978, the sarne figure was C$4l million. (67)

Of course the importation of u.s. ~r09ramming is not the

same in both 1inguistic communities in éanada. A recent study

shows that in 1978 anglophone Canadians spent about 75' of

their T. V viewing time watching foreign programs compared to

48' for francophones. (68) Anglophone children spend about 83%

of their viewing time watching foreign programs compared to . 56% for francophone children. Since the majority of the

foreign programs are Amer ican, i t suggests that American pro-

grams are very attractive, even for francophone children. (69)

One of the prob1ems that arises from the apparent attrac

tiveness of U.s. programming is that Canadian audiences may be

inf1uenced by U.S. news and public affairs.,

points out that:

Margaret Buber

There are so many'Canadians who mlsunderstand trade issues with Japan because th~y be1ieve- that the Americ~n news coverage 'ôl Japan is applicable to Canadian relations with Japan. .~or example, the American trade def ici t wi th Japan and strong demapds.-.. for increased Japanese purchasè-. of American goods is taken as a message for Canadians ta demand the sam'e thing from the Japanese. (10)

"

')

J

46.

k... There has been some movement to cor rect the weakness of

broadcast relations but this has been mostly 1imited to the

techno1ogica1 fi eld!:l. In the technological field of broad-•

castin9, meetings of the Canada-Japan Television Executive

Commi ttee \ have been held annually since 1981. The most

recent, he Id in Vancouver, ·Ca1gary and Banff, foèused discus-. \

sion on satellite development and the new technology in broad-

casting. (71)

In spite of this technolog-ical exchange, which should

stimulate closer r .elations between the two nations, the number

of Canadian programs shown in \ Japan has not increased greatly

and in Canada i t is said that there is not much demand for

Japanese programming. (72) This assertion could be countered

by the argument that the opportuni ties gi ven to both the

Canadian and Japanese publics to see the programs of the other

country are 1imi ted. For example, there are e1even languages

used by the CBC in foreign broadcasting: English, French,

Spani sh, Russian, Ukréilnian, Polish, Portugese, C ~eck, Slovak,

German and Hungar i an. There has been no attempt to duplicate

this performance in the Pacific region and on1y tapes and

cassettes are sent there. The CBC does receive about one -'1

hundred letters per year from ..... its Japanes audience, but this

figure is small compared to the number received from other

nations. (73)

Final1y, Canada' s newspaper coverage of Japan, also

reflects a certain 1ack .of interest in Canada-Japan communica-

j

•

- ,

,- 47.

tioh links. Whi1e the major Canadian newspapers miHntain

correspondents in London, Par is and in many states in the

U .S., there ls not one Canadian correspondent in Tokyo sent

there by a Canadian newspaper company. Ther e was once an

office for journa1ists in Tokyo, but it was moved to Peking.

Current1y, Southam News Service stations one person in Tokyo

to provide news to all the maj or Canadian newspapers.

The Japanese coverage of Canada is equally open to criti-

cism. Although the Japan Economic Journal has an office in

Toronto, i t picks up mainly economic news re1ated to Canada; 1

thus there is not much Japanese coverage of Canada' s social

~ and po1itica1 events.

2. Academic Relations

According to statistics availab1e from "the Department of 1

Industry, Trade and Commerce, the number of Japane,se who have

received student authorizations from Canada in the past ten

years has increased from about 400 to 1,500 (Table 2). This

may indicate an increased interest among Japanese students in

Canada' s academic facili ties: however, the number of Japanese

studènts in 1982 (1,452), is q-uite small _when compared to the

number 0cf students visi ting from other nations. Table 3 sets

out tije figures concerning British, American, Japanese and

other {fOreign students author i zed to study in Canadà' a10ng

wi th the .!'l.~ber of Hong Kong students and Asian sub-tota1s

--'-

48.

Table 2: Canadian Student and Emp10yment authorizations

,to Japanese Citizens

;...

Emp10yment Author i zations St'udent Visi tor (E.A. '8) Author i zat ions Documentation , ,

1982 1,593 1,452 1,38,5 ~

1981 1,731 1,337 1,740

1980 1,884 1,372 1,671

1979 2,126 1,104 1,959

1978 1,935 702 1;891

1977 2,063 441 1,908

1976 2,147 535 3,124

1975 2,057 443 2,179

1974 2,085 354 1,669

1973 1,64·5 355 1,590

e

Source: Emp10yment and Immigration Canada

, . --"'-_~·..,.,o~ __ --r----""- . _-----.---_._~,--_._-.._.--- ~~ _. ~ ..... _ ... _---------._' -

49.

Table 3: Student Documentation' by PJiovi nce of destination

d

1980 Quebec Ontario Alberta B.C. Total

Japanese 147 394 66 729 1,372

British 223 640 310 238 1,693

American 2,126 2,418 1,217 1,213 8, 20~ "-,

Total 13,396 33,912 5,239 7,191 67,761

1981

Japanese 138 441 73 628 1,332

British 204 1,101 376 305 2,320

American 2,628 2,852 1,260 1,370 9,412

Total 15,3.t6 ~6,071 5,669 8,357 84,523 '-./

Iv 1982

Japanese 128 492 77 693 1 f 452

British 172 1,444 372 302 2,623

American 2,449 3,045 1,189 1,418 9,549

Total 15,Olq 52,281 6,108 8,620 92,762

(H. K • ) - 421 16,019 . 1,752 2,164 23,307

(A§lan Total) 2,774 33,297 . 3,130 4,950 50,284

Source: Immi~ration Canada

• .. , ,

___ L

50.

avai1ab1e for the year 1982. It can be seen that the Japanese

figure of 1,452 amounts to onty about 1.5% of the total number

of foreign students in Canada. This is exceptionally low when

compared to the Hong Kong student population (23,307). As the • Asian sub-total indicates, the major i ty of foreign students

come from Asia, but most of them come from Hong Kong, Malaysia

and other developing countr ies of the region. The Japanese

share is only comparable to the British, which may indicate

that both the Japanese and Bri tish do not view a Canadian

education as a priority.

Not unexpect edly, we f ind a much greater presence of \

Japanese st udents in the U. s. (Table 4). Japanese students

account for

in the U.9-.

in Can~da

about 7% of the total number of foreign students

in 1978. Their number i6 about 30 times more than

'<t' for the year 1978, while in the case of Br i tish

students, a1though there is only a sma11 number in both Canada

and the U.S., their numbers are a1most equal. This i8 to say ., that the Briti~o not give much priority to American schools

over Canadian. It shou1d also be ~oted that since 1975 the

number of Japanese students in the U. S. has surpassed the

number of Canadian students in the U.S.

One might be able to explain the reason for the Japanese

preference for American schools by the rather 1ate growth of

the Canadian educationa1 system compared to that of its

American counterpart, particularly at the university and post-

graduate levels. As Table 5 shows the majority of foreign '\"~'i

•

-----, ... ----=---".,.,.. _. --- ----_ .... --..... ~ .....

..

l -

51.

Table 4: Japanese, Canadian and British Students •

in the U .S.

Total Japanese Canadian

1> British Foreign Y.ear students students students students

c

1970 2,593 13,233 2,546 93,179

1971 3,259 9,248 2,619 94,035

1972 3,907 9,739 2,319 96,568

1973 4,617 7,154 1,924 90,693

1974 5,849 6,735 2,742;:_ 109,197

1975 9,024 8,.618 2,694 107,495

1976 11,424 8,816 2,105 121,317

1977 11,140 10,812 2,689 154,674

1978 13,484 9,1Sl 3,974 187,030

Source: U.S. Department of Justice, Immigration Bureau

\

______ <of- __ r ___ ~ ..... -----.,..--_....!-..._--,--_.~----~----------,.---. _ ....... -

( ,

Table 5: Admission to Canada of Students by country of 1ast permanent residence and by leve1 of study

Second- Uni ver- Tech-1972 primary dary sity trade other "

Japanese Il 49 217 35 47

British 16 50 363 22 39

American 186 ' 980 6,116 478 1,877

Total 492 5,551 20,826 4,~6l 2,762

,r 1975

Japanese 5 58 240 91 49

British 32 82 379 73 74

American 273 872 6,062 898 1,911

Total 929 9,408 2<4',004 10,611 6,507

1977

Japanese 12 65 251 58 .55

British 55 95 400 57 79

American 287 733 4,728 496 1,738

Total 1,132 8,460 29,380 7,817 5,791

(8 .R.) 73 3,801 9,397 2,476 530

Source: Immigration Canada

"en. • .,..

., 52.

Total

359

488

9,637

34,192

443

640

10,016

51,459

441

686

8,982

52,580

,~6, 277

53.

students come to Canada for ,a university education. For

example, 251 out of the total number of Japanese students

(441) for the year 1977 were at the university level.

Prof essor Frank Langdon, of the University of British

Columbia, estimates that "in the field of Asian and Pacific

studies, none of the Canadian universities would be ranked

among the top ten schools in North America, or even among the

top twenty in terms of their· budget and number of

professors. n (74) If a few of the Canadian universities were

to keep as high an acaqemic standard as the top ten to twenty ",b '

American universities ~ln each field (other things being

equal), the Japanese students would like1y choose the Canadian

universities more often than is presently the case. Given the

relative si ze of the two countr ies, the' number should be 10% ;

of those who choose the U.S.

Of course, other considerat ions play an important role. 1

J

For ~xample, the Japanese preference for an American educati9n

may be a resul t of a tradi tion establ ished since the end of

World War II. ,

This tradition probably began with the American

Fulbright Scholarship and other forms of support created after "

the ~ These scholarships gave opportunities for the

Japanese ~ study at many of the advanced Amer ican schools,

and this effectively supplanted the pre-war tradition in J~pan , of studying in Europe. Then, as the J~panese economy started

t~ recover, the Japanese began to send their young officers to

the U .S. business and law schools wi thout government

l

..

54 •

• assistance. Even for regional studies such as Latin American,

Afr ican and Middle Èastern studi es, the Japanese expect the

American schools to offer the highest standards and the latest

knowledge.

To allay the concern that the lack of Japanese exposure

to Canadian universities is not consistent wi th a good long

term bilateral relationship, i t might be necessary for Canaqa

to initiate more contacts with Japanese universities, business

corporations and government offices. This need has been

recogni zed in recent years on both sides of the Pacif ie. For

example, in 1983 the Department' of External Affairs invi ted ,

six Japanese university deans to Canada. Furthermore, several

research and training programs are now under consideration

between Canadian and Japanese universities. An example of

such a jOint: effort ls a program offered by the University of

Toronto and the Universities of Tokyo and Keio • Another . ,

initiative would see York University and Tsukuba. university "

establish a joint program •

,Prof essor Gerald Wright, Vice President of the Canadian

Donner Foundation, points out that a number of problems affect

the development of academic exchanges between Canada and

Japan. First of aIl, he notes that the major efforts have

thus far been ini tiated by the federal government. In other /

words, Wright argues that private and non-profit organizations

ahould become much more involved in increasing the sco'e and

number of the exchanges between the two nations. (75) There is

~ .'

. .

\ '

much in what Wright has to say. Both the Canada-Japan

Busi-nes.s Cooperation Conference and the Asia-Pacific Founda-

tion .were ini tiated by the federal government. T.he fact that

the government takes so Many of the ini tiat,i ves May lend' a

certain artificiality to the procedings.

Seco~dly, Wright argues that there are so man y Chinese

researchers in the field of Asian studies that there is always

conflict with scholars of Japanese studies over the number of

courses to be offered and the allocation of budgets. If one

counts the number of Chinese courses in areas such as history,

language, and poli tics, i t becomes clear that they overwhelm

those of Japanese courses. Prof essor Donnelly of the Uni ver-

si'ty of Toronto points out that there is almost no one teach-

~ng Japanese economic policy in Canada and very few teach

Japanese politics. (76) ,It should also be noted that Most of

the Canadian professors who teach Japanese studies are edu

cated in American universities such as Harvard, Berkley and

S'tanford. It is difficult to produce top rank Canadian

scbolars at Canadian universities o~ing to the low profile and

'" limited budgets of their Japanese studies programs.

A final point made by -Wright is rather technical. It

concerns the difficulties Canadians have in learning the

Japanese language. It could easily take two years to "aster

the Japanese language.... and this acts as a disincentive for

Canadian students to go into Japanese studies as opposed to

other fields of study which use European languages. (77)

/

. - - --., ._-------- -_. -.-- .~-_. ----_._~---- - ..

56.

Table 6: Japanese University Students in Canada by de~tination

" Ad.amemic 1 Quebec Ontario Alberta B.C. Total year

1982-83 Under-Gra. 13 38 6 17 82 Graduate 19 76 5 29 137 Total 32 114 11 46 219

1981-82 u. 22 44 1 24- 99 G. 24 66 6 19 121 T. 46 110 7 43 220

1980-81 U. 23 41 6 19 96 G. 19 60 6 23 _.114 T. 42 101 12 42 210

1979-80 U. 18 37 Si 23 &7 G. 15 56 5 27 110 T. 33 93 10 50 197

1978-79 u. 19 34 4 -21 83 G. 12 64 3 20 109 T. 31 98 7 , 41- 192

1977-78 u. 19 27 5 12 71 G. 16 56 7 14 99 T. 35 93 12 26 170

1076-77 U. 13 26 5 12 61 G. 16 49 3 15 91 T. 29 75 8 27 152

1975-76 u. 5 16 9 10 . 44 G. 15 3a- 4 17 85 T. 20 54 13 27 129

1974-75 u. 0 22 3 13 40 G. 4 29 2 16 54 T. 4 51 5 29 94

1973-74 u. t 1 9 4 Il 34 G. 3 15 6 12 41 T. 4 24 10 23 75

Source: Statistics Canada Note: Pig~res are not exclusive owing to the fact in each

year a couple of universities number of Japanese students.

did not report a

lJ

t- ... -... - - ---- --- - - ~---- - -~p

57.

When Japanese students do come to Canada they tend to

study in a limi ted number universi ties and a few provincel:;.

Table 6 shows that around 50% of the Japanese students choose

ontario universities and that four provinces: Ontario~

Quebec, B.C. and Alberta, account for more than 90% of aIl

Japanese students in Canada. The University of British

Columbia and the Universi ty of Toronto are the two major

universities in Canada that attract Japanese students. UBC

has recently opened a Japanese legal studies program co

sponsored by the Law Foundation of B.C. and the t-iax Bell

Foundation of Canada. Malcolm Smi th, a Harvard graduate who . .

now heads this program, points out that the program is solely

for the study of the Japan~se legal system and does not

include courses on the Chinese ~egal system. He notes that

th~ trend towards Japanese studies is advancing but Chinese

studies are still the dominant orien1:ation of Asian studies

programs in Canadian universities. He also notes that", èven

at Harvard and other American universities, in those cases

where the Japanese and Chinése studies programs are integrated

into a Asian studies program the Chinese program has a higher

budget and professor allocation. (78)

The UBC type of program is like~y to grow and generate ,.

other specifically Japanese studies in Canada._ In this

endeavor the goyernments of Ontario and B.C. may have to take

)the lead to enhance Japanese study programs. Both provinces r have a vested interest in improving Canfda~Japan relations

- ---C-o -_-- -

58.

':> because of geographical proximi ty in the case of B.C., and

because of business prospects in the case of Ontario.

3. Tourism and ,Immigration

Tue Japanese tour ist i s known to spend mor e money on

average than' tourists from other countries. Because of this,

Tourism Canada and provincial tourist departments are eager ta

attract Japanese tourists (Table 7 shows the number of

Japanese tourists visiting Canada in the past 10 years). The

number of Japanese ' tour ists visi ting Canada has doubled in the

last 10 years and ranks very high compared to other forei9n

countr ies, although Br i tish tour ists st i11 outnumber Japanese

(Table 8 compares the number of Japanese, American and British

tour ists to visi t Canada by province of entry). Since only

B.C. has direct flights from Japan those Japanese tourists who

enter Ontar io, Quecec and Alberta arEt .. counted only when they

come via, the U. s. In the case of Alber ta, the numerous

Japanese tourists who reach Banff a'hd Jasper via B.C. are not

included. in the figures, therefore, the actual number could be

much greater than the figures suggest.

/:nong the provinces, Ontario attracts the most Japanese

tourists, with B.C. in second place. The reason why Japanese

visit Ontario more than anywhere' else is that they enter North

Ameri,c;"a via New York or Chicago, then move north to see

Niagara Fails which is Çl main attraction. If direct flights

\

, ,- ~ - -_ .. or .-~ __ ~. _

59.

Table 7: Japanese tourists in canada

"\. Year Number

-...4 1973 71,095

1974 77,543 .....,

1975 90,411

1976 106,783

1977 97,532

/~ 1978 127,827 ( 1

1979 'r 158,582 \ ~

~ 1980 162,253

19_81 146, 4~1 c:

1982 139,447

Source: Tourism Canada

"\

',)

L -----=_:-..:.-------:.--.;.,'''''''''..,.;;..-----------------

1 60 •

..

,..."

Table 8 : Japanese, Amer ican and British Tourists to Canada

<l

1981

Province Japanese American Br i tish

Queb~c " 6,190 3,044,923 50,023 ~

1

Ontario 72,704 28,247,789 330,864

Alberta 3,804 485,671 42,782

B.C. 62,820 3,52'3,697 92,966

Canada Total 146,46.1.1 39,808,716 540,588 -

1982

Quebec 6,172 2,747,831 42,278 . "\

Ontar,io 65,774 22,307,,866 290,606 \

.

Alberta 2,880 464,222 , 37,032 " ,

B.C. 63,907 3,221,551 85 :',97 5

Total 139,447 32,431,840 474,097

Source: Tourism Canada

\.

r ,~--_ .. --J~~"-' --~...-,...,-----------

61.

were available from Japan to Alberta, Ontario, and Quebec, it

would be likely that there would be more Japanese tourists who ~ ..

see Canada before 901n9 down to the u.s.

In contrast to tourism, Japanese immigation to Canada is

of negligible importance. Table 9 shows that in the past la

years the Japanese share of total inunigration has been 0.5%,

while Britain accounts fQr 15%, the U.S. for 12.4% and Hong

Kong for 5.8%. #

l would argue that one of the major reasons

for the small scale of post World War II Japanese immigration

to Canada is the treatment of Japanese-Canadians and Japanese <,

immigrants by the Canadian government during the Second World

War. At that time much if not all of their property was con

f iscated and they were forced to move to internment camps iln

the interior of B.C. and in Alberta. This was the case

l'egardless of whether they were Canadian ci ti zens. (79) The

same tragedy occurred in the U .5. but the ordeal ended soon

and, after thé war, the U. S. government made an official

apology and provided compensat ion to Japanese-Amer icans who

had suffered. In Canada, ho~ever, there was no constitutional

provision to protect the Japanese as there was in the u.s. and

the actions are sti~l being justified on the grounds of ~'

national security (i.e., it was a legitimate use of the powers

invested in the government ~y the War Measures Act). Of late

the leason for inaction g.iven by othe Liberal govertunent is

that the events are buried in the distant pa&~ and can not be

resurrected wi thout dealing wi th other histor~" injustices.

'.

Table 9: Japanese, British, American and H.K. immigrants to Canada

Japanese Br i tish American H.K.

883 15,451 24,366 5,009

1972 718 18,197 22,618 6,297

1973 1,105 26,973 25,242 14,662

1974 859 38,456 26,541 12,704

1975 635 34,978 20,155 Il,132

1976 498 21,548 17,315 10,725

1977 412 17,997 12,888 6,371

1978 359 d Il,801 9,945 4,740

1979 666 12,853 9,617 5,966

1980 737 18,245 9,926 6,'309

Total 6,872 216,499 178,614 83,915

(0.5%) (15.0%) (12.4%) (5.8%)


- -

62.

Total immigrants

121,900

122,000

184,200

218,465

q.,a7,8 81

149,429

114,914

86,313

112,096

143,117

1,440,321

(100.0%)

J

'.

) 63.

Any objective examination of the events makes such' rationali-

zations appear self serving and inadequate if not completely

outrageous. It has been reported recently that the League of

Japanese Canadians will go to court to demand an off icial

apology and co~e~ation. With respect to the destination of the few Japanese immi-

grants who have come to Canada, four provinces: Ontario,

Quebec, B.C., and Alterta, account for about 95% of the total

(Table 10). It should be noted that Ontario is now the home q

of slightly more Japanese th~ln B.C. T,his can be explained by

the fact that a substantial number of Japanese-Canadians moved

to Ontar io after the war to forget their wartime exper iences

in B.C. (80) Thus, the largest Japanese community is now

located in Ontario ana specifically in the To~onto area.

4. Commercial Relations

The Canada-Japan business relationship is said to be in

the developrftent stage (Table 2; includes figures concerning the

number of Japanese businessmen authorized to work in Canada).

But a look at the facts indicates that the number of Japanese

busi,nessmen in Canada has not increased in the p~st' ten years.

They numbered only 1,593 in 1982. This figure ia quite small

when compared to the number of Japanese businessmen residing

in the U.S. For example, Table 11 shows that there were

101,428 Japanese businessmen residing in the U. S. in 1978.

l

\

Table 1.0: Destination lof Japanese Immigrants ' broken down by Province

Year Quebec Ontario Alberta B.C.

1971 85 359 "- 126 288

1972 77 250 IL _ 114 254

1973 86 401 139 429

1974 94 382 106 260

1975 51 216 95 227

1976 46 177 75 168

1977 35 134 78 151

1978 39 116 55 115 .:;

1979 73 240 90 235

1980 39 246 132 295

Total 625 2,521 1,010 2,422

(9.1%) (36.7%) (14.7%) (35.2%)


"

"

64.

Canada /'Î'ota1

883

718

1 ,105

859

635

498

412

359

666,

737

6,872

(100.0%)

_... _._ _ _____ ._~l

65.

Table 11: Japanese_Temporary Businessmen ~~ the U.S.

1970 59,679 ~.

1971 61,473

1972 62,105

1973 87,498

1974 106,084

1975 98,067

1976 90,374

1977 92,130

1978 - 101,428

Source: U.S. Department of Justice, Immigration Bureau

Table 12: Emp10yment authorizations issued by province of destination

1982 Quebec Ontario Alberta B.C. Total

Japanese 153 661 "171 405 1,593.

British 623 5,152 1,432 1,445 10,151 ,

American 6,397 25,444 9,205 10,727 59,805 -

Total 17,543 59,531 15,193 17,711 124,114 " • Soucce: Immigration Canada

- - _. -... .. - ~- ~-"~~-~ -_--:-..=::..~~:; ... ;:.; ... "'~-----

66.

,Si~~e bhe American figure is cumulative and the Canadian

figure ls on a newly author 1 zed bas is, usua11y for every two

years, one should double the Canadian figure to get the actual

number of resident Japanese businessmen. Even if one esti-

mates the number of Japanese ,. businessmen . , ln Canada to be

around 5,000, owing to the fact that authorization is required

every two years, then th~ figure is still one-twenty-fifth of

the number of 'Japanese busines"Smen residing in the U. s.

One can explain this large gap partly by reference to the

fact that the Japanese can do business, with Canadian firms

whi1e 1 i ving in the U. s. Thi s is because a large number of

Canada' s corporations are Amer ican subsidiaries and therefore

Japanese businessmen can deal directly wi th the parent

çompanies in the U .s. However, the number shou1d still be

considered low in relation t.o the volume of trade between the

two nations. For example, the trade volume between Canada and

Japan is about one-tenth of the volume between the U. s. and

Japan, thus a proportionate figure for the number of Japanese ... \ <t ~

businessmen to be stationed in Canada should be around 10,000

in 1978.<

Concerning the distribution of Japanese businessmen in

canad~bY province of destination, Ontario attracts the most,

or about 40% of the total i~ 1982_ (Table 12). Next COrnes B.C.

with about 30% of the total. Compared to British businessmen

in Cana~a, Japanese businesluÎ\en number on1y about one-sixth.

The numbers are'even more strikingly low wnen compared to the

... -,. .. -_ .... _--~."...

l'

67.

number of American businessmen. Japanese businessmen account

for about one-fortieth of the number of Americans. The

Japanese share of the total is just 1.2%. Thus, even in the

commercial field, Japan-Canada human flows hàve not reached a

significant 1evel.

The sma11 number of Japanese businessmen in Canada might

also be attributed to the low amo~nt of Japanese direct

investrnent (DI) in Canada. Japanese DI has accounted for only

0.9% of Canada's total in recent years. (81) Furthermore, the

fact that Japanese DI is concentrated in the natural resource

sector implies that there may be less need to send people to

Canada. The importation of natural resources, such as coal

and iron ore, does not require much direct Japanese presence

in Canada. On the other hand, if the investment were in the

manufactur ing sector, engineers and sales manager s would be

needed in Canada to organize and manage the operations. Thus,

.because of the nature of Canada-Japan trade the human presence

"'-is not reflective of the total volume of trade. o

In statistics concerning imports and exports of goods,

B.C. appears to dominate. But since aIl of the Japanese car

exports to Canada go through Vancouver and wheat exports to

Japan also go through B.C. ports, B.C.'s share should be dis-

tributed, to a certain extent, among the other provinces

(Table 13 shows the bilateral trade by province of lading for

export and by province of clearance of import). It ls still

correct to say, however, that a major part of Canadian exports

Table 13: Canada-Japan trade by provinces

year

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

(province of lading for export to Japan and province of clearance for import from Japan iri millions of dollars)

Quebec Ontar io-

export import net export import

114 114

123 257 - 134 118 399

125 253 - 128 121 374

158 272 - 114 140 464

168 286 - 118 108 545

291 301 10 1'~8 620

291 314 23 ~93 ';'669

403 314 89 256 759

320 405 85 222 1,070

355 372 18 256 1,000

68.

1 net

- 281

- 253

- 324

- 437

- 482

- 476

- 503

- 848

- 744

(to be continued to the next page)

..

.. --_ ..... _-- .. ~,--- --__ --·~_)~_._H __ '_ .. · __ ,------------

69.

Alberta British Columbia ,

year export import net elÇport impart ,

net

1973 64 1,382

1974 79 15 64 1,744 681 1,063

1975 - 153 17 136 1,551 488 1,063

1976 231 23 208 1,732 715 1,017

1977 233 25 208 1,818 888 930

1978 286 27 259 2,159 1,229 930

1979 241 27 214 3,~O 1,071 2,009

1980 261 30 231 3,2 0 1,617 1,643

1981 302 36 266 3,420 2,440 1,980

1982 355 49 306 3,307 1,996 1,411

'.-Canada Total

Year Export Import Net

1973 1,793 1,010 783

1974 2,220 1,427 793

1975 2,115 1,205 910

1976 2,388 1,526 862

1977 2,506 1~

1,802 704

1978 3,0'51 2,265 786

1979 4,080 2,157 1,923

1980 4,357 2,792 1,565

1981 4,498 4,039 459

1982 4,571 3,527 1,044

Source: Statistics Canada

''1

70.

to Japan originate from the western provinces and that most

Canadian imports from Japan are destined for the eastern pro-

vinees. In other words, the western provinces have a huge

trade surplus wi th Japan while the eastern provinces have a

huge deficit •. The latter is especially the case wi th respect

to Ontario. In total, Canada has enjoyed a trade surplus with

Japan for more than ten years.

Currently the major issue in commercial relations is the

Canadian desire to increase the export of Canadian manufac-

tured goods to Japan and increase Japanese DI in the manufac--

t ur i ng sector in Canada. There have been certain positive

signs suggesting an improvement in these areas. For example,

there has been a marked increase in the expert of Canadian

communication equiprnent and in Japanese investments in the

manufacturing sector. (82) However, there Is still a strong

tendency on the Japanese side to regard Canada as solely a

supplier of natural resources.

This kind of fixed image of Canada is h-ard to change as

long as the individual Japanese businessman continues to have

a narrow view of Canada which focuses solely

interest. (83) A creative view, focusing on

on his sector Off

the potenti~

the two economies to work together for their mutual benefit,

is required. To ad vance this goal a broader set of communica-

tions to stimulate multi-faceted viewpoints on both sides

should be encouraged .. Such initiatives as the Canada-Japan

Busrness Cooperation Conference, where different people from

....

71.

different fie~ds meet in one placè appears to be a movement in

the right direction.

, Canada must a1so shift i ts attentiop towards Japan from

its traditional concentration on the q.i. and Europe. For ,

example, the Canada-Japan Trade Counci1 has held a number of

seminars on Japan in Ontario cities such as at Hamilton,

• Windsor and Brantford. These meetings have been an eye op~ner

to local Canadian businesmen. - Gregor Guthr ie, the pr esident

of the Council, expressed deep concern over the fact that only

a relatively sma1l number of Canadian businessmen are intent

on knowing anything about Japan, while the rest of the people

are complacent because of their natural feelings towards

Europe and the U .S. (84)

-~--- -_ .............. ----_.:_-_. ---- ---- .......,.......-_ ...... --- ------,~~.-_ .. ~.- - .- ---- - --- - - -- --- -

72.

Ill. EXPLARATIOHS OF THE CORSTRAIN'TS ON THE CAMADIAR-JAPAR

RBLATIONSBIP

Certain conclusions can be drawn from an analysis of the

facts provided in the examination of the comparative position

of Japan's relationship with Canada. First of aIl, it has

been noted that the volume of communic~tion flow i8 far below

the level expect{;d qiven Canada's extensive commercial rela-

tions with Japan. In particular, the media is not providing

the two publics wi th Informat ion about the other country' s

affairs. The

facets of the

lack of

Japanese

c~nad?ftn media coverage

economy, politics and

of various

society has

created a situation in which the general public in Canada

depends on the American media for their understanding ~, 1

Japan.

Secondly, in the acedemic field, Japanese study programs

in Canada do not provide an adequate environrnent for Canadian

students and researchers ta study and investiqate Japanese

society. The scarci ty of Japanese courses offered in Canada

is partly due to the fact that Japanese studies are usually

considered a sl,lbfield of Asian studies and therefore must

compete for resources with Chinese studies. The latter often

take the lion' s share in the distr ibution of courses and

budget. It should also be noted that as a result of an

J.~ insuff icient academic environment for the study of Japan,

\ --- - -----"'---

73.

there are few Canadian -universities that can produce scholars

and researchers necessary for the advancement of Japanese

studies. Furthermore, leading scholars of Japanese studi es

are mainly educated in the U.S. Thus, the U. S. media and the

U.S. educational system act as interpreters and intermediaries

between the Canadian populace and Japan. The combined effect

of this pauci ty of dir'ect communication wi th Japan is to cause

indigenous Canadian perceptions of· Japan to be of an indirect

and secondary nature.

Thirdly, in the area of tourism and immigration, there

are more Japanese tourists who enter Canada via the U .s. then

come di rectly to Canada. The lack of direct flights from

Japan to Calgary, Toronto, Montreal or other eastërn cities is

a major reason for the indirect flow of Japanese tourists.

Immigration flow is a separate issue and is limited because of

historical reasons. The latter relate to the Canadian govern-

mentIs actions during World War II and its subsequent refusaI

to take responsibil\ty for i ts actions. In èontrast to the

U. S. government, the lack of posi ti ve treatment of Japanese

Canadians i~ the form of an apology and compensation remains a

psychological barrier to Japanese immigrationli Thus tourist

and immigration flows wihh Canada remain marginal ,in contrast

to the flow to the U .S. which has" a more developed transporta-

tion system and a more receptive government,

Fourthly, in the commercial field, there are few Japanese

businessmen in Canada in proportion to the level of bilateral

/

74.

trade. This is partly due to the fact that the J~anese can

deal directly wi th Amer ican corpèr ations concerning business

r:, ... ~l,ated to their Canadian subsidiaries. Another r eason i s

that trade wi th Japan is not always accompan'lêd by the

expected degree of DI in Canada. This is to say, although the

Japanese impart large amounts of coal, iron orè and other 1

natural resources and export large amo~nts of manufactured

goods to Canada, they do not appear interested in establishing

factories in Canada or in purchasing Canadian manufactured

goods. .

It appears that Canadian' s percept ion of Japan is a

reflection of the fact that they gain information through

tenuous channels of communication and academic act i vi ti es. \

Canada 1 S lack of direct communication and academic channels

.. with Japan contrasts with those with the U.S., U.K., and Hong

Kong. The Japanese perception of,! Canada displays a more or

less similar level of development which i5 reflected in the

level of hwnan flows (i.e., in the areas of tourism, immigra-

tion and assignment of businessmen). Ovetal,l, a rel iance on

the U. S. media and insti tutions as intermediar ies can be said

to char acter i ze the Canadian and .Japanese perceptions of each

other.

, ,

-, -

75.

A. The Impact of Canadian and J'apanese Perceptions of each

other

The question arises: what is the effect of the undevel-

oped state of Canadian and Japanese perceptions of each" other

on the bilateral rela tionsh i p? To begin with, it was the

introduction of the Canadian third option policy that ini ti-

ated the development of increased relations with Europe and

Japan in order to reduce Canadian vulnerabili ty (vi-a:ra-vis the 1 1

U.S. Canada opened negotiations first wJth Euro~e, which had 1

already been, to a great extent, m~lded into a common mar ket,

while the Pacif ic ver s ion of the European N'1"'~.nm· C Communi ty

was in its developmental stage. It that

Canadians would choose Europe ' nctiottf "the reliable

countetforce to their southery{/neighboUr b cause of Canada' s

historie familiarity and ease of communicatio with uropeans.

unfortunately, it was not in Europe's interest to give

Canada a special status because this would involve changes to

the Communi ty' s common tar iff and tr ade pol ici es. The compro-

mise solut ion was the 1976 Fr amewor k Agr eement which was more

a gesture of closeness than a substantive agreement. It has

been observed that a parallel negotiation was in progress with

the Japanese, but· it was not pressed until the European

negot iations wer e ~ompleted. It seems that bath Canadian and

Japanese negotiators were reluctant to ini tiate a major scheme

prior to a similar agreement being worked out with ~urope.

76.

On the, Japanese aide, the focua of diplomatie efforts was

alwaya on relations wi th the U. S. and Japan' s relations wi th ~:

Canada were eonsidered li ttle more than an extensGn of

Japanese pelieies towards the U .S. Although the Japanese have

had a fairly constant trade deficit with Canada, their ,!,oliey

towards Canada was to regard i t as bas ieally a stable and

important source of natural resources. Canada was also viewed

as a supplemental expert market for manufactured goods in

)North America, a market which adds about 10% to exports to the

U. S. Overall, in the mid-sevel)ties Japan appeared pr imarily

interested in maintaining the status quo in relations wi th

Canada.

On the Canadian side, the government urged the Japanese

.. to increase their levei of DI in the manufaeturing sector

regardless of the trade surplus in favor of Canada. The

Canadian government also demanded that more action be taken to

facilitate" Canadian exports of )

manufactured goods to Japan.

Concrete schemes to accommodate the Japanese in Canada' s

industr ial development were not provided, howe'ver, and the .,

position of Japan in Canada' s foreign relations remained

unspeci f ied. Obviously, the Canadian--and Japanes~ perceptions

of eaeh other art! not developed enough to allow for closer

ties.

-- -- -- ... - -- .... - ... .-~ ~"J- ... -~ ~--

77.

B. 'l'be Impact of o.s. Impediaents

I t has been seen tha t J apan places the utmos t impor tance

upon its relations with the U.S. whi1e, at the same time,

Canada i s tryi ng to r educe her dependence upon the U. S. The

common denominator is that their perception of the U. s. is

ref1.ected in the Canadian and Japanese perception of each

other. As we have noted, it is in one sense a situation which

creates a certain perception and in another sense causes a

limi tation of the re1ationship. Thus, the implementation of

measures to improve direct communication, which could include

the direct gathering of information from each other, wou1d be

a means to enhance the perceptions of each other. But, it is

the overwhelming importance of Amer ican decisions, both on the

foreign and domestic scene, that is the critical factor 1imit-

1ng Canadian and Japanese relations. It is, as Andrei

~lzenko asserts, Canada's 'sovereign risk':

When the U.S. accounts for 90% of the North Amer ican market, and Canada 10%, if the U.S. were to close its market what would be the consequence for Canadians and for foreign investors in Canada? In 1971, Nixon announced import restrictions and Canada was hurt by them. This is a typical case of ~he soverêign risk that Canada hase In order to attract investment, Canada must provide a higher rate of return on investment. This means tha-t at times the government must intervene to grant subsidies to. investors. (85)

l

78.

If we apply this notion of sovereign risk to Canada-Japan

relations, we notice that Japan's overriding concern with the

u. S. ls a correct response to the terms of avoiding Canadian

'sovereign risk'. In fact, an analysis of Japan's position in

all the areas of communications: academi"a, tourism, immigra-

tion and commerce, .indicates a strong preference for relations

with the U.S. to the detriment of Canada.

The only possible way to increase Japanese involvement in

Canada appears to be, as Sulzenko indicates, through

government intervention. In other weTds, unless the Canadian (

government guarantees higher returns on the type of investment

that Canada desires (i.e., in the manufacturing sector), the

Japanese are unI i kely to choose Canada over the U. S. as an

- area for future investment. The Canadian government is

willing, it appears, to go this route if it becomes necessary.

The underlying factor that supports this type of initiative is

th~ ~ide acceptance ~mong Canadians of government in~olvement

'in stimulating privat activities. Carl Beigie, a

noted economist, who from the U. S., observes

that:

In Canada, people don't trust the market, wé trust governments. Read Pierre Berton' s Wh~ We Act Like Canadians. The market is w ere external forées dominate. Thus, if we leave it up to the market ,Canadians will lose everything because the market ls dominated by foreigners.(86)

-----~-~- - -~-----

79.

c. The I.pact of Federal-Provincial Relations

In my analysis of the initiatives and responses of the

federal government, the four provincial governments, and the

business community, it was noted that a number of business

fora were initiated by the federal government and a1so that

natural resource-related projects were negotiated by the pro

vincial governments in consultation with the federal govern-

ment and business interests. Even in academic and cultural . areas, federal and Provincial governments have taken the sub-

stantial initiatives while private organizations have (d0ne,

little to oppose government invo1vement and have not them-

• selves contributed to the improvement of the bilatera1 rela-

tionship. In this respect, federal and provihcial governments

can be seen to have shaped Canada's relationship with Japan.

This means that the policy orientation of each -actor has a

signif icant impact upon relations wi th Japan such that when

provinces are' in a competitive position in relations with

Japan, or wh en federal and provinci~l governments are not

unanimous on crucial matters, conflicts and uncertainties will , "

arise inv6lv)ng the Japanese actors.

~.

80.

IV. THE AUTOMOBILE REGOTIATlON

A. BACKGROUND TO TSE-CONFLICT

1. The Canada-u.S. Auto Pact

The Auto pact of 1965 consists of seven clauses and two

Annexes. The seven clauses establish a duty-free trade zone •

for automobile products, while the Annexes, of which there are

two (A and B), include a number of conditions restricting

complete free trade. The auto pact covers only new vehicles

and original automobile parts (e\cluding tires, unless they

are mounted).f\ J

Annex A includes safeguard ~easures which were introduced

at Canada's insistence. 1 They include measures that stipulate

" that: i. for each class of vehicle (i.e., cars, t:rucks and

buses) the ratio of Canadian vehicle production to sales in , Canada must be at least 75%; ii. the absolute dollar value of

Canadian content must not fall below the 1964 level.

~Annex B, contains provisions which allow the U .S. to pre

vent third-country producers from using Canada as a channel

for circumventing u.s. auto tarlffs. One provision requires

that imports from Canada must have a minimum 50% North

American content. (87)

In addition to these conditions within the ~greement, two

addi tional commi tments to guard Canada' s interests were

o

.... 81.

incorporated in what were called the 'letters of undertaking',

or 'side agr eements ' • Under these agreements, in or der to

improve Canada' s balance of payments and employment figures,

the major auto manufactur ers (General Motors, Ford, Chryslet

and American Motors) were obliged ta:

1. increase the value added in Canada '(CVA) in each

model year by an amount equal to 60% of the gro.wth in the

value of car sales in Canada, and 50% in the case of commer-

cial vehicles; r ."-..

2. make a supplementary increase in Canadian value added

of C$260 million by the end of the 1968 model year. (88)

With the passage of time, several of the~e provisions c;>f

the auto-pact have become inconsequenti@l. But of lasting

importance is Annex B(l) and the first side agreement.

Because of the 75% production-to-sales ratio and the 60% or

50% CVA/va~ue of the car sales ratio provisions, the four

Amer ican manufacture-r sare obliged, as car sales increase, to

augment production and investment in Canada. As Canadian

content in Canadian-made vehicles has diminished as a result

of inflation, among other factor~, the Amer ican manufacturers

have come to concentrate on assembly operations to fulfill the

above two requirements. The consequence was that Canada

beoame a net exportl!r of finished cars and an even bigger net

importer of parts. 1 The Çanadian auto industry has gone through Many struc

tural changes since 1965 which have created the f01lowing

conditions distinctive to Canada:

- i :f·.-------l'~--~ ··_R _____ , ______ .........

/

82.

a) Since sales of comestic automobiles influence the

number of cars produced and the level of CVA the big

four must achieve,' the Canadian government links

declining sales in Canada with a serious threat to

the development of the auto industry. Thus, if sales

of imported cars increase and at the same time

domest:ic car sales decline, th.e governfhent must

d~velop measures to reduce the sales of imported

cars.

b) The assernbly plants already estab1ished in Canada

manufacture car models that are popular in North

Amer Ica a~ the moment (i.e., large cars, and mini-

vans) • ~f Canadian car sales were to decline, this -

might nq't immediately affect production and employ-'

ment in ICanada.

c) In spi~e of the fact that a reduction of Canada' s

automofive trade deficits was one of the initial

'movi tâtions for Canada' s entry into the auto pact,

ther1 has been a constant trade deficit in automobile

proQucts between Canada and the U.S. since the q

si9ning of the pact (except i'P 1971 and 1982).' Thi:s •

is due mainly to limited exports of Canadian parts to 1

the U.S. (89)

l

.,

83.

2. The Restriction of Japanese Car Imports

,

When the U. 5. and Japan ."

announced a voluntary form of

import restriction on May 1, 1981, Canada's pe-rception of this

agreement as a threat could not be characterized as Mere

Canada was afraid of being isolated by 'overhead '

agreements among major car-produ.cing countr ies. (90) This was

because the C~nadian government correctly assumed that the

Japanese would attempt to shift their exports from the

restricted U.5. market to the unprotected Canadian market. (91)

Herb Gray, a Canadian M.P. representing the riding of Windsor, 1

'immediately called for Canadlan import restr ictions based on

the U. 5. model. ~rime Minister Trudeau took up the matter

with the then Pr~me Minister of Japan, 5uzuki who happened to

be on a visit to Ottawa that May. To follow up on thè discus-

sions, the Canadian government quickly sent a four-man task

force to Tokyo to negotiate with the Japanese government. (92)

Tanaka, then Minister of International Trade and Industry,

responded that the government would continue t~o urge modera

tion in i ts discussions" wi th the Japanese auto makers and

)would also try to convince them not to flood the ,Canadian .. market with automobiles. (93) On June 4, 1981, the Department

of Industry, Trade and Commerce, made the following announce-

ment: "

J

....

-The Japanese are instituting a marketing program for passenger venl~les exports to the Canadian market under whl,ch the y have forecast that exports to Can.,da for the period April l, 1981 to Marc~ 31, 1982 will not exceed 174;213 units. ~

-the need for a level of further restraint is to be reviewed by Japan in consultation with Canada before the end of the first year. (94)

84.

This agreement was to last for one-year wi th the provi

sions of the following year to be agreed to by further consul-

tation. This waé a different arrangement from the three-year

agreement wor ked out by the U. S. wi th Japan. The fact that

rThe restricti~ns were to last only one year created a serious

conflict between Canada and J.apan over the number of cars to

be restricted in the second year. For a number of reaso!)s

Canada demanded a drastic reduction in the number of Japanese \

cars enter 1ng Canada. First, the Canadian government argued ,

that because of the depres.sed atate of the Canadian market,

increased Japanese imports would lead to a further drop in

domestic auto production _<Jith serious ramifications beca.use

of the auto pact agreement). Secondly 1 they argued that fur-

ther imports would increase the existing one-sided deficit in

aûto trade with Japan. Finally, the Canadian government

objected to the extremely low level of Canadian content in--.

Japanese vehicles.

1 -_ .... '" __ w ~

~5.

From the Japanese point of view, import reductions, as

opposed to restrictions, wou1d be difficu1t to accept because

Canada had long enjoyed an overa1l trade surplus ~ith Japan so

that a decrease in automobile sales wou1d on1y inerease

Japan's existing trade deficit with Canada.

In the summer of 1982 the recession was worsening and

relations with Japan had reached an impasse; thus the Minister

of the Department of Industry, Trade and Commerce, Herb Gray,

ordered eus toms officiaIs to de1ay import procedures for

Japanese cars at the port in Vancouver. (95) As a resu1t,

Japanese cars were 1eft to sit on the waterfront. The "

Vancouver pile-up was one factor which 1ed to the announeem~nt

on August Il, 1982 of an agreement to reduce car imports from

Japan. Under that agr eement, Japanese passenger car exports

to Canada were not to exceed 153,000 units, which represented •

a decrease of 23.5% over 1981 exports. Furthermore, an

interim understanding was reached for the fiist six months of

1983 Which would a1low for the export of 79,000 units.(96)

In response to the troub1ed state of the Canadian auto

industry, Edward Lumley, Minister of Industry, Trade and

Commerce, established the Federal Task Force on the Canadian

Motor Vehicle and Automotive Parts Industries (December 1982).

The task force was to analyze current and future deve10pments

in the industry and make concrete policy recommendations for

jltrengthening the Canadian Bector. The task force was co-

chaired by Patrick Lavell, President of the Automotive Parts

•

86.

Manufacturer's Association of Canada (APMAC) and Robert White,

Director for Canada's United Aut~mobile Worker's Union (UAW).

The report, entitled: An Automotive Strategy for Canada,

was submitted to Lumley in May 1983, only six months after the

formation of the task force. The report recommended 'that

Canada set mandatory value added levels for aIl auto makers

which would be related te vehicle sales levels in Canada. An

alternative for overseas auto manufacturers would be te ful-

f ill auto pact commi tments which were cur r ently agreed to by

G.M., Ford, Chrysler and A.M.(97) The report required a 10%

CVA to cost of sales ratio plus an additional 2% CVA to cost

of sales for each l, 000 sales in excess of 3, 000 uni ts up to t~

28,000. Thus if the Japanese auto manufacturers exported

28, 000 uni ts to Canada, they would have to fulfill a 60%

Canadian content requirement. Above 28,000 uni ts, the report

recommended conditienal entry after negotiations with the

government ta establish commitments comparable to the auto

pact cemmitments .. These would include vehicle production to

sales ratios an,d CVA requi.rements. (98)

Following the submission of the task force report,

parli~ent began consideration of legislation on a domestic

content bill. The government also began negotiations with the f

Japanese to bring abouti full-scale Japanese investments in

automobile plants in Canada.

87.

B. THE 'l'RREE EXPLARATIONS APPLIBD 'l'O THE AUTO CASE

1. Canadian-Japanese perceptionsi

The Japanese automobile issue has provoked much heated

debate in Canada not only about the Canadian automobile

industry but also about Canada-Japan relations. On the ques-

tion of the future of Canada's auto industry, economists often

take a cautious and somewhat 'pessim'istic stance. For example,

Ross Perry, a Toronto based economist, did a study to deter-

mine whether the Canadian automobile industry could remain

competitive in the long rune The conclusion he reached in his

book, The Future of Canada's Auto Industry, was that it could

note (99) wendy Dobson, of the C.D. Howe Institute, analyzed

the kind of adjustment which would be necessary to phase out

uncompeti ti ve capaci ty, and promote recovery by encourag ing

efficiency in the automobile industry. (100) Patrick Caragata

of the Canadian ChaIllfber of Commerce has descr i bed the auto-

mobile industry as a 'sunset industry. (This is how the ,

Japanése ,government has treated the auto industry for the past

15 years). By setting aside short-sighted political factors,

he has tried to understand the current automobile trade

dispute as a single point in the historhcal development of

free-trade among ~estern il)dustr,iali zed countr ies.

In spi te of such reasoned analyses by. economists, the

automobile issue has become a highly political issue with both

..

---~

88.

domestic and foreign po1icy implications. The chcÙce of the

members of the task force i tself reflected the nature of the

issue. Most observers saw the results of the report as pre

destined because the Trade Minister, Ed Lumley, exc1uded auto-,

consumer associa~ions and neutral parties from direct part~ci-

pation in the task force. Perhaps this was because Ottawa' s

first attempt in 1977 and 1978 to convene a task force was not

much of a success and t.he government "did not act <lm the recom

mendations. According to Andrei Sulzenko:

Labar movement support i 5 crucial for the succeas of Any government po1icy. Labor support ia particu1arly important because 1abor unions exper ienced great disappointment wi th their participation in the pre- , vioua government task foree. If they (government) don' t take their advice this time, labor is very likely to reject any future task force participatiçm and turn to non-support for the current libera1 party. (101)

Y. Yamada, an executive of Nissan Automobile Company ,

(Canada) Ltd., agrees that understandi~g the position of 1abor

is the key to understanding the recommendations of the task

force.

\ Canadian attitudes - have changed from demands for increased sourcing 1 acti vi ties by the Japanese auto manufacturers to those for increased direct "investment in Canada so that jobs will be created. Job-

v creatiQn is basically the central interest of the Canadian negotlation. 'Job creation

'. ". --------"-", ~~-- ._"- _._..:_- .-- ---. '. .

p

l

!

•

is also closely related to poli tiëal support for the LiberaIs in southern Ontar io. (102)

89.

There are approximately 110, 000 members in the Uni ted

Auto Worker's Union of Canada (UAW). Among them, 80,000 wprk

in automobile and parts manufactur ing, 21,000 in parts manu-.0

fac~uring (usually smaller corporations) and 59,000 work for

the 'big four' auto makers: G.M., Ford, Chrysler and American

Motors. (103) The UAW mostly represents workers who are

employed by the latter group,M although it also represents

workers in the parts industry who happen to wor k for the

larger (usually) American owned parts manufacturing co~panies.

Workers in smaller Canadian parts .companies do not tend to be

) members of the UAW.

The princi'ple industry inter;est group for parts manufac

turers is the Automotive Parts Manufacturers Association of

'" Canada (APMAC), which is compr ised of approxi.mately 350 com-•

panies, 80% of them located in Ontario. A further 10% are

located in Quebec, while the remaining 10% Ior less) are

located in the rest oIcanada. There are, in total, about , .

1,200 'independent' parts companies in Canada, 900 or more in

Ontar io, 100 in Ouebec, 1,00 in western Canada and 30. in the

Maritimes. (l04) Almost 60% ·of the Independent .parts companies

are Canadian owned and over 50,000 Canadians are employed by

them. There are few larget Canadian parts manufactures, but ,

_ 60% of the parts industry is made up of companies wi th less'

... - ~ ~., .. " .. .,.

r -ft _" \ .....

, . __________ --'--._4r-• ..,.. -""dltL-___________ '-----·--..,_--~ -. - ~ ... --.......... --. _..- .... -

' ..

90. ,-than 1,000 employees. Large sized parts companies tend to be . American owned and often take part in UAW negotiations wit\:1

th~ large auto firms. Small and medium sized companies tend

to be Canadlan owned' and take part in APMAC. Together, the

UAW and APMAC r'epresent Most Ontario workers and, to a much

iesser extent, those in Quebec.

To deal wi th the Canadian employment issue is be~oming

IZ;. extremely difficult for the Japanese because it has become • ~ u

highly political and because the Japanese have tended to foc~~'

their attention on the automobile negotiation \.ii th .the U. s.

According to Yamada:

The Japan Automobile Manufacturers Association (JAMA) has its ma1n office in Washington D.C. and has none in Canada. This makes it difficult for the Japanese auto manufacturers to lobby or to communicate effecti vely wi th the Canadian government. This ls why we are now 90in9 to create a new wing which will run the JANA office in Canada. We are also coo}?er ating ~ wi th the Canadian Association of Japaftese Dealers (CAJAD~ to coordinate 'their acti vi Hes. (lo!f)

Two months before, the release of the task' force report.,

six Canadian subsidiaries of Japanese Auto Manufacturers sub

mi tted br iefs to the· Motor Vehicle and Parts Industry Task

Force. They basically stressed the~following points: .

1. Impart ·sales have not caused the Canadian automotive

industl!y' s current difficulties beoause Canada

~._-~----------~ ......... ~------------~_,_ ... __ --,---___ l

,

c 91.

..

/ exports the majority of its production of medium and

large' cars to the U. s. and these t epr esent 77.8% of

t9tal Canadian production.

2. The Canadian automobile industr~ has lost i ts inter

national competitiveness in both price and quality "

beCause of a lack of product development, decllning ,.

productivity, .and poor cooperation between management

and labor.

3. The Canadian automt>biie indust'ty is inef.-f icient . ~

because optimum decisions regarding selection of

models.and production volumes must a1so meet the con-

traints of the U.S.-Canada auto pact. (106)

Another major actor opposing the imposition of quotas is

the Canadian Association of Japanese Automobile Dealers

(CAJAD) • The CAJAD has made PUbliC" a number o~ studies that

provide evidence disputing the utili ty of import quotas. One

of these is es'tit1ed: "The Econo~ic Effects of Trade Restric-..

tians on the Importation of Japanef;le, Cars in Canada. nIt G

spe11s out six factors that account for the dec1ine of 'econo

mie acti vi ty in the Canadian auto industry in the years from

1979 ta 1982. It a1so examined quantitatively the a11eged

benefits of the trade protection scheme proposed by the task

force report. The CAJAD concluded th~t there could be adverse

effects from tbe imposition of import restrictions on Ja~anese cars. (107) The study quotes from, the Japan Economie Journal

ta draw attèntiOn ta the feeling in Japan over Canada's

•

• --~------------------~. __ ._~~,------------------

..

•

l 92.

! negoti~ting $trategy to gain import reductions • It concludes

. that Canada' s strategy of cH~ectly blocking the import of .. Japanese cars could dahlage Canada' s existing relati,~ship wi th

. Japan. Il

~ , We believe that Canada's action (i.e.,

delayed custon'\S clearance of Japanese cars) not only runs the serious risk of violating GATT' s pr inciples but also cr itically damages the relations of mutual trust and confidence between Japan and

,; Canada... 0 What we fear most is not so much the direct adverse effects of Canada's import restrictions but the highly 1ike1y possibility of simi1ar actions being taken by other countries, thereby fanning the fire of protectionism. Canada's action seems particularly i110gi-, cal as the country is currently running a comfortable trade surplus with Japan. (108)

\

YUz,o 0 Satano, Consul General Qf Japan in Toronto, also

turns aside Canadian complaints and criticizes the task

force's members~ip and report.

'~

1. The membershi~p ~omposi tion of the task force was one-sided. There ls no way consumers could express their views' nor could neutral people get invo1ved.

2. The task force sU9gests that the local content. requirement will create 130,000 jobs, but this is ,an èxaggeration. It \ presupposes that. aIl of the' six Japanese----' àuto manufacturers will ptod~ce 150,000 cars at a

O

tim~ when present Jâpanese sales in Canada are only 146,000. Furthermor'e, the introduction of robots and otber high- '

. technology labor saving devices would

__ .~~ __ -r"I"" .. _"", _______ "' ______ ~_<O __ '.~~ -

(

1

'C

probably lower the ·number of jobs that. ~ould be created by Japanese ~roduetion in Canada .-

3. Lieensing, ibint venture or sourcing activi ties are complex undertakings. The Canadian .parts industry does not appear ready to work with the Japanese auto makers. When Canada went on a mission to japan it came only to see if someone would

. offer a joint venturè. They should have come prepared wi th ,coner ete proposaIs for Japanese investment in Canada. {109) 0'

l '

93.

Jun Sasaki, an executi ve wi th the Toronto off ice of the

Japan External Trade Organization (JETRO), is also criticai of

Canadian demands. He argues that, first, the Canadian govern-' --' .

ment and auto corporations cannot determine by themselves what

is going to be the output of Canada 1 s automobile industry. 1

The Canadian auto industry is a braneh plant of the Amer ican

automobile industry., Secondly, only a portion of Canada 1 s

parts industry is Canadian. owned, and this part is generally

not internationally competitive. ThirdIy, Canada's policy

tends to be eratic • Canada' s official position differs over .

tïme and eurrentIy t;he government i9 placing the unemploymen-t , issue ahead of all'other aut~otive sectoc qonsiderations. /

Those Japanese who are familiar with the automobile issue

in Canada can understand the unique problems of Canada' saut;o

industry. However, other Japanese in the ».S. or in Japan who

are concerned with the' automobile iss\le in North America' as a

whole do not share their understanding. As Sasaki points out:

"In general', the Jap~nese equate ~orth America with the u.s.

and do not regard Cànada aepara~ely from the U.S."(llO)

~ ~._-"------ ._-- ------~"'"------~------------

•

" (

94 •

. Th~ problem .from the perspective of the Japanese is that

they bave not' yet found ways of participating 1.n' 'the" Canaàian

automobile Industry while taking 1nto account the exis~in9

Canada-U • fi. auto pact and Canada' s oth~r economic and commer-j .

cial links ~ltb the U.S. ,Y. Yamada suggests that Japan:

"Still bas.to reco9nize that Canada ls not a smsl1, market although i t looks smal1 because it is next to the U.S. market •

. For' Nissan, Bonda or Toyota, Canada is a big market where they can sell as many as 50,000 cars in a year." (111) ~ ~

The question is whether Canada and Japan can cooperate to

estab1ish an internat~onally competitive and efficient automo-

bile industry in Canada. To Y~ada, the answer for the mbment

appears to be . 'no' becausé of a" 1ack of' understanding and

cooperat\on between the two countries.

'\" 2. U.S. Impediments

When the J U .8. demanded t;hat the' Japanese restrict their

automobile . expor~s, . Canada followed suit. Canada a1so ,

followed the U. s. in demanding a local content requirement. ,

The problem .is thrnada is acJversely affect:d by U.S.

content requirement~ 'because they reduce the lik.e1ihood 9f

" Japanese sourcing or' production of vehicles in Canada.

Accor~.in9 to Yatnadâ:

\

, ..... l , Of " •• J

, . "

)

l, '.i. , , "

• )

The Canadian market iûself is not large enough to be sepa1!ated :fram. the U .S. and the ,Jàpanese auto manufacturers must,' aim

j lat the whole NortJl Ameri'can market. However, th~ American loe~ cpntent bill does not give Any ipecial treatment to Canadian content, thez::efore Japanese sourcin .. gj or

-production of partS' in Canada bas ~\ be sêparate from the U.S. market. (112)" ~,

'II \',

95.

The local content bill in, othe U .S., the Ottinger Bill,

excludes . Can~dian production from Ame'ric;:an content r,equire

ments s? that Japan cannot -source in Canada ta fulfill

AmeriCàn requirements. Furtherrnore, application of the U.S.-1

Canada' auto pact is limited to companies Iwhich are listed in

the pact. Therefore, even if the Japanese companies fulfill

Canadian content requirernents i t does not mean automatic free

entry' to the U.S. ",market. 'Furthermore, the U.S. is' in no

, pos~ tion to encourage' the Japanese to invest in Canada. It ,

would not herp ,the Amer iCë\ln ernployment situation, and would

mean dangerous c:ompetitien and, increased domestic politi'cal

pre~àures for action~; even against Canada.

The onlf sol~tion, accolding tb s~ Gindin of the UAW, ls

to seek direct and unilateral government législative action.

Licenihg, joint ventures or further sourc- )p

Ing by. the Japanese, makes sense only in 'the framework of local content fulfillment. Poli tical pressure provides some of the leverage necessary to get the Japanese to spend money on licencing, joint ven-

" tures or sourcing. But legislation is the first step. ,If we want the Japanese to .anufaeture in Canada, we need leg~sl,~-

, .- ----~-----.- _ .. #_- _ ...... _..__------.,---u ___ . __ , ___ ....... ~ Lo_~ .... ____ ._

"

J 96.-

\

tion. It has to be legislation, not just political pressure, otherwise we cannot beat ,the j Q.S. ~nd bring the Japanese investmen} here. (113) .

It is 'unlikely, however, that Jap~n wil~ invest in Canada

in preference to the U. S., owing to t~ muçh greater size of

the American mar ket as well as the greater pol i tlca1 power of

the U.S. The only way to obtain a certain portton of Japanese

investlflént in Canada ig' to ~ake possible the application of a

dut y remission program such "as was put' in place for Volkswagen

(VW). This ÇJu~y ,remission program allo'(ls VW to sell cars dut y

free in. both the'· U. s. and Canada because VW has assembly

plants in the U.S. and a parts plant in Canada. Thus, VW' can , -

.. .

fulfill Canada's 8S"content requirement for the sale of cars -

in Canada. However-, this formula may not 4 be tao attractive to 7 the Japanese because the dut Y in the U,S. is on1y 2.8% and ls

• due to go dbwn to 2.5' in -1987. f ",",

) F~deral-Pr_Qvincia1· Rela,ions .

,

From' a different perspe~tfve, one can see evidence that

one ot the federal government 1~ reasons for cr~ating the task

force was .to give the private) sector an opportunity to invite

, government intervention. According to Sulzenko,

, Canadian history ia a history of governme,nt intervention in the prlvate sector.

.. ,;

___ __ ......... __ ...... ..._-..-______ . ______ e.-_ ... ___ ,.,..._ • ....-___ • ____ ; 1 _____ •

.--- --

1

The small market and transportation costs make production costs very high which means government _ assistance is often required to stimulate capi tal acclDDulation. Railways were the f-irst to .require government assistance, now the automotive indusl'l:y wants it. The auto pact of 1965 was a better sol ut ion than higher, tar Iffs !jut bath are in essence protecti ve me asures. If the or ientat ion of the cur rent task _forée report i9 protective, this i9 not surprising given the origin and nature of the O.S.-Canada auto. pact. (114)

97.

One Pf Canada' s problems ,is that government intervention

cornes not only frOfD the federal government but also from pro-1

vincial governm~nts. The major opponent of. federal interven-,

tion in the auto industry is the Province of British' columbia

t' which depends heavily on trade wi th Japan. According to B.C.

Industry Minister, Don Phillips, the recommendations of the

federal task force are detrimental to bath Canada's and B.C.'s

interests.

\ The federal task force report is a selfserving document produced by those who have 'a vested iliterest in promoting protectionism... It is dangerous, to Canad·ian and Br i tish Columbian interests as international traders and exporters of goods and services to many countries around the world.' Can you imagi'rie how we would fare if we were required to set up production facili ties in e~ery country to which we export?.. And there is no doubt that the bJ;'unt would be born by Brit·ish Columbia, where half our jobs depend on the export. market. The impact could be disastrous on the numerous industries which are the backbone of this prov:Lnce 1 s economy •••

____ ~ ____ ~~_ ...... -_ .... _-----...... ~~ ... _-... -. "'~ _ t

-",

ranging from manufactured goods to lumber, plywood, agriculture, fishing, and processed metals. If ottawa does go along with the task force suggestions it will be another vain attempt to artif icially prop up eastern Canadian jobs at the expense of the people of British Columbia. (115)

..

98.

Obviously, the western provinces are not happy wi th more pro

tectionism which only aids. central Canada's manufacturing

industriesl!l" at . the expense of the west. Wes~ern Canadians

oppose protectionist measures because tl1ey ~ee.1 that they are

a threat to their trade wi th Japan and that t~e dangers are

out of proportion with the' potential benefits of the measures.

Furthermore, Japanese tetaliation in response ta Canadian pro-.

tectionism would be difficult to distinguish from the effects

of the economic slump. But even wi thout protectionist mea-

sures to prompt them to action, Japan may h~ve to cut back on

sorne coal imports owing ta the economic downturn. The

Japanese have màde substantial investments in coal development

therefore it hurts them also.

These economic arguments for government restraints do not

sound strong, but they are poli tically ser 10us ,issues. The

LiberaIs are digging a deeper hole for themselves in the west

if they ignore the voice of western voters once more.

Unlike the eastern provinces, B.C. appears confiaent in

its relations with Japan. Even ·in the automobile sector, in

relations with Japan, B."C. appears to be more effective than

Ontario. For example, Toyota' s aluminum wheel investmènt in

'. \

99.

B •. C. is a signif~cant initiative. B.C. provided two million ..

dollars in assistance to Toyota fo~ this project and it is one

of the very few occasions on which t-he B.C. gévernment has

glven so much industrial development assistance. Such moves

can be understood as farsighted planning on B.C.' spart. (116)

Business circles are not free of the effects of federal-

provincial conflict. It is said that the Ontario de1egates co

t"he Canadian Chamber of Commerce (espeaially representati.ves

of G "M., For·d and Chrysler) have urged "support for the local

content requirements. (117) This has led to a strong denuncia-

tion from the western delegates. In a 1etter to the Minister

of State for International Trade, they note the dangers of

local content requirements f9r Canada-Japan relations.

,The Chamber supports the approach of the Canadian government to negotiate voluntary automobile expert restraints wi th Japan ••. It cap be argued that 'vo1untary restraints' are not significan,t1y different from unilateral quotas. However, we believe that process of arriving at a voluntary restraint agreement resu1ts in 1ess ill-feeling than the- imposition of unilateral quotas. Barriers, inc1uding negotiated voluntary restraint measures, should not be permanent and must not be viewed as such. (118) .

Although Japan coul~ take advantage of the fragmentation

characterizing Canadian federal-provincial relations, it would

be running the risk of causing a major internal split, whi& '. 'II

May make its negotiations with Canada more difficu1t in the

long rune

, .

_ ,l __ ~ ___ .... __________ '-.. ....... ".,"".,."." .. ,:r:" ..... , _,_. _._44 __ ....,...., _ ......... _, .......... ___ -"'" ~-----.-..

100.

CORCLUSIOR , , ,

Iri the post-~ar period, Canada-Japan relations h~ve. been

dominated by.commercial interactions, especially those related ,

to na~ural resource exploitation. This has establishe,. in o •

Japanese minds an image of Canada as a stable, supplier of'

natural resources to Japan. (119) In the minds of Many

Japanese Canada ends wi th the Roeky .Mountains. Eastern pro-

vinees sueh as ontario and Quel;lee are viewed as onl~ an addi-,

tional and marginal market for Japanese exports of manufac-

tured goods tdCthe U.s. .. However, the bilateral relationship in the post war

\

per iod was nq,b eondueted sole1y to the exe1usü:,n of non-• Q

,

\1

commercial interaction • Ministeçia1 consultations have been • ..

. under. way sinee the Diefenbaker era and theré' are now more

than 13 bilateral consultation channe1s' (shown in Table 1).

In academic and' cultural fields" the exchange ,o,f people has

been encouraged, espeeial~y sinee 1974, by governmEmt funding,.

The fact is, 'however, that the ]..evel of qon-commercial rela

tions is almost insignif icant conipared ta tle level of' Can~da-, ( , '

Japan commercial acti vi ty. Furthe~rmore, one eould argue that

even in the commercial field, relations wi th .~apan are basi-

cally limited ta trade in qatural. resburces. The increase oi

such trade would not do much to enhance tl)e qual,i ty of the

bilateral relationship.

,---- -----------------._= ... - ....... -----------------_. 1

/

101.

In the analysis of the position- C?f Japan in CanaCla's"

relat,ions wi th the rest of the world, we hàve noted that

Japan' s share of communication flows in and out of Canada did

not place i t among the top ten countr ies. It ranked far

behind the U.K. and ."even behind Hon9 Kong."'/ Human flows in the

areas of acedemic and cultural exchange, tourism, immigration

and commerce ~also indicate that Canadians and Japanese are not

interacting significant1y in those areas cornpared to the size

of the commercial relationship. {?l!

possible explanations for this situation are, first, that

the 1imi tation in the relationship could be,,~ttr ibuted to the

Canada-Japan perceptio~ of each Gther which is extremely

underdeveloped. Second1y, Canada' s as weIl as Japan' s depend-, ence on the U.S. in terms of economic, political and military

ties, have reduced the opportuni ty for the two nations to

d~J:ectly interact wi th each other. In fact, Canada depenos

heavily on U.S. educational institutions, communications and

o commercial experiences to understand Japan. The same si tua-

tion can be seen to exist on the ot~er side of the Pacific.

Thus, the U.S. functions as -an intermediary between the two • Iiîi .

nations which creates a aituation where the U.S. determines in

large measu~e the shape of Canada-Japan relations.

p'inally, i t is obsetved that federal-provincial relations / ,fr' .

..

have a great effect on Canada-Japan relations. .Because of the ' .

differen.t levels of regional industr ial development in Canada, •

Japan' s assOciation tends to con.gentrate on natural resource

\ .. \ , l

102.

exploitation in the western provinces and to regard ontario

and Quebec as addi tional markets forr exports of omanufactured

goods to the U. S • Thls unequal indùs'tr iâl development, com-

pounded by major differences in distance from Japan, has

induced the Japanese to associate differently with different \

.. regi.ons . Furthermore, the fedeqtl government, which has been

.rc;-Si~~ 'pol.-i tical support in the west for mor'e than a decade, 6 _ ••

has~aligned i tselr \t(.i th the interests of Quebec and southern

Ontario. Because the federal' government tends to represent

the interests of these two provinces, even to the detriment of

the western provinces whlch account for the major part of

~rade wit'h Japan, Japan has been coerced into building g'reater

economic lt inks wi th central Canada. The federal gévernment,.

has pursued this course OBtensibly~to reduce Japal\'s negative

impact on national uni ty because Japan' s c.urrent relationship

has the effect of exacerbating, existing regional differences,

,making thè west more dependent on natural resources and the

east more vulnerable to imports of manufacture? goods.'

The automobile issue provides concrete evidence of how

these three explanations a'ccount fOT the limited development

of the Canada-Japan rela~ionship. As noted above, Japan 1 B

association wi th the manuf~turing sector in G:anada has been

marked 'y a lack of cooperation regardless of i ts potential ~

for mutual 0 benef i ts • This is especially applicable to the

automotive sector, an industry which accounts for the major

part of. Canadian >el(ports of manufactured goods. We have noted

. '

, ..

"

103. ,

that this ~ack of cooperation was partly due to Canada's

slowness in perceiving Japan as a viable partner, and also to 1

the Japanese perception (to the exclusion of other percep-

tj,pns) of Canada as one of only a few stable suppliers of

natural resources.

That Japan does not pay close attention to Canada's auto

~ industry ls also a functlon of the structure of the Canadian

auto industry. The Canadian auto industry ls not an independ

ent unit but Is integrated Into a North Ame~ican market by the

"

•

auto pact of 1965. The pact has linked Canadlan auto producIl

tion with sales in Canada, but more importantly it has

rendered the Canadian auto industry Inseparable from the

mar ket situation and technolog ical development of the auto

industry in the u.s. Since the U .S. component of the North

American market dwarfs Canada's, .it is little wonder that when

the Japanese encountered pressures for import restri.ctions, t

both in .. the U. s. and in Canada, they had to coordinate- their

efforts first with the Americans.

The problem of differing regional development in Canada

has also effectedo relations wi th Japan' in the auto sector.

The Canad~n auto industry has ~ geographical concentration in

southern Ontario perhaps due to its proximity to Detroit, the

centre of the- U.S. auto industry. J'

This has meant that

Canada's largest manufacturing tndustry is, in effect, one big

local industry in Ontario although there is a small amount of

producti\n in Quebec • This has created a situation in which

" . . "

-'----_._----...... -. -----------~_. __ . - ------ ------ --1 -

104 •

.. prob1ems surrounding the Canadian automobile industry are not

necessàr i1y shared throughout the country. On the contrary,

there has been strong opposition, particu1ar1y from the

western provinces, to the federa1 government's ihtervention

into the automobile industry. This is because it is viewed as

aid to central Canada to the detriment of the rest of Canada.

From the Japane~e viewpoint, as an importer of western natura1

resources which const:'i tute the major component of Japanese

commercial relations wi th Canada, such federal-provincial

c1eavages shake Japan's confidence in the security of western . C~da' s natura1 resource supplies. This is the case because

Japan is urged to serve the inter ests of the manufactur Ing

industry in central Canada to the detriment of its own

interes.ts.

In the final section of this thesis, a case study of the J

auto 'industry provides further evidence of t;he prob1ems exist-

ing in Canada-Japan relations. First of a11, due to their

underdeve10ped percèption of each other, Canada and Japan do

not appear ready to enjoy the potentia1 concrete benef~ts

which. can ar ise trom cooperation to develop a manufactur ing

base in Canada. The Japanese perception of Canada has con-

tinued to be a view of Canada as a stab1~ supp1-ier of natura1 l'

resources. The Canadi~lJl perception of Japan has a1so not

'de*e1oped because of Canada' s histor ic familiar i ty and links

wi th Amer ic~ns and Europeans. That new ~inks with Jappn have -,

not been created is 1arge1y a iresu1t of the relative 1ack of

, '

--- --..--.;, ~-.-

105 .

. . direct communication channels, cult'ural ties and transporta

tion' links. ~ ,

Secondly, the aut0\pact of 1965 has rendered the Canadian

auto industry dependent An the strategies of the'b~ four auto ,-

manufactures in the U .5. This is because the Canadian auto-

mobile industry is fully inte9rated into the u.s. market which

leaves little rOOm for the Japanese to act independently to

belp in the restructur ing of Canada' s biggest manufactur ing

industry. c

Thirdly, the existence- of federal~provincial disputes

over industrial policy caused a dilemma for the Japanese

concerning how they should associate with the different

r~gions of Canada. Overt support for one side could not only

exacerbate a federal-provinc~al dispute but could also put at

risk the .entire bilateral relationship.

In conclusion, we can argue that the underdeveloped state

of Canadian and Japanese perceptions of each other has

narrowed the opportuni ties for greater oooperation and con-•

structive actions in both countries. With this as the under-. lying factor, u.s. impediments, which fünction to draw Canada

and Japan''S attention fir"st to the U.S., ha.v_e furht·er under-

mined the chances for Canada-Jap~n cooperation. In addition

" to u.s. impediments, we can see tha~ federal-provincial rela-

tions, especially' disputes over industrial policYt have

created conf?sion in J~pan's relations with Canada.

,

J .. ----_._------~------"--

107.

BRDRO'l'BS

1. 1

Interstate Behavior Mode1~

2. Government of Canada, Paçific:' 'Foreipn Po1icy for Canadians. (Ottawa, Depart-ment of Externa AffaIrs, 1970) .

3. Mitchell Sharp, "Canada-US Relations: Options for the Future", International Perspectives. (Autumn, 1972).

4. Ibid. P .17

5.

6.

7.

8.

9.

"Pre-theories and Theories of FÇreign

Po1itics. ty Press,

C.F. Hermann, M.A. East, M.G. Hermann, B.G. Sa1more ~nd S ~A. Salmore, CREON: A Foreign Ëvents Data Set. (Sage Publications, 1973). '

Wi1kenfie1d, et al., p. 6.

Ibidr. p. 80.

"Canada in Asia: Time to become a more active Pacific nation, n Far Eastern Economic Review. (J'une 26, 1981), pp. 36-i::8.

10. Interview with John Sloan (Ottawa: May 26, 1983).

Il. Interview with Senator van Roggen (Ottawa: 1983) •

May 26,

• 12 Interview with Margare~ Huber (Ottawa: June 17, 1983) • ...,.

13.

14. "Gregor Guthrie emphasizes this argument _ (Inter~iew: May 12t 19821.

___ .... ~ .. _ .......... ..--.. --________ -~ ..... ~·Y"' __ "A ,..., ___ ---..... u· ..... ,..· _._, -----. -~-.. ~---- HO.

108.

15. Figures p~ovided by John Sloan (Interview: May 26, 1983-) •

16. 'Interview wi th Bruce Rankin (Toronto: May 19, 1983).

17. Interview with Jane Worto~ (Toronto: June 7, 1983). ,

18. Interview with Raymond McCaque (Toronto: June 9, 1983).

'19. Ibid.

20. Ibid.

21. Ibid.

22. For examp1e, La Salle High Hako9ate1 Kansei University Women's Co11ege in Tokyo.

Sehoole in Kagoshima and in Osaka and Toyo-Eiwa

23. Interview with Pierre Fortier (Montreal: June ~3, 1983).

24. anese Economie Relations. a Press,

" 25. "Evolution de echanges commerciaux entre le Canada, le Quebec et le Japon, dEt 1973 a 1982," (Ministrere de l'industrie, du Commerce et du Tourisme, juin 198~). .'

26. Interview with Pierre Fort.ier (Montreal: June 23, '1983). ~

27. Ibid.

28. Canada/Japan business Cooperation Commi ttee, "Background briefing notes on British Columbia/Japan Trade and Economie Relations." (Province of B.C., April 1983).

29. Interview with John MeKeown (Vancouver: May 31, 19S3)

38. Canada/Japan Business Cooperation Commi ttee, "Background briefing notes on British C01umbia/Japan Trade and Economie Relations," (Province of British Columbia, April 1983)~ .

31. Interview with Or. Morris Maduro (Edmonton: 1983) • _

May 27, ~

3'. Ibid.

33. Ibid.

34. Interview witp T.S. Zahavich (Ottawa: May 13,1983).

-------- ----, ---_.-~--------_.-,-- ,- ,-

"

1 -

, ...

109.

35. Government of Ontario, "Canadian Trade Policy for the 1980s: An Ontario Perspective," (Ontario Ministry of Industry and Trade, September 1982), p. 22.

36. Interview wi th Margaret Huber (Ott'awa: June 17, 1983).,

37. Ibid.

38. In6erview with Eric 'Trig9 (MOR-t..!ea1: June 1., 1983).

39., Taken fram the 1ist of Canadian and Japanese de1egates to the Montreal Conference. .

.. " . 40. Interv~ew with Lorne Seitz (Ottawa: 'June 2, 1983).

41. IbId.

42. "Japan's 'fear of FIRA' 1essened by Conference," The Toronto s~ar (May 3, 1983). ,

43. Interview with Eric Trigg (Montreal: June 13, 1983). 1

44. Interview with John Bruk (Vancouver: May 30, 1983).

45. Ibid.

46.

47.

Brebner, J.B., • North At1ant ic The Inter la the Unl e rea Brl aln.

Countries inc1uded in 'this region are: Japan, Canada, 'New Zealand, Chiha, three NICs (South Korea, H.K. and Taiwqn) and the 'fLve ASEAN countries (Indanesia, Malaysia, Philippines, Singapore and Tqai1and). The equiva1ent figure for Japan ~s 31.6', for Canad~, 9.4%. See: K. Hay and P. Price, "Pacific ~im Trade MatrixExport F.O.B.-1979," in Canada,' Jafan and the Pacific Community. (Canada-Japan Trade Councll, 1981), p. 61.

48. prior to the s1gning of the Basic Treaty in 1974, the Cultural Agreement was signed between Australia and Japan in an attempt to diminish the mutua1 Incomprehension and ignorance tha·t, for aIl the closeness of the bilateral relations, char acter i zed each country. The. Aus~i:a1ianJapan Foundati(l)n was a1so establ'is,hed soon after. See: E. Gough Whit1am A Pacific Community. (Ha~vard University Press, 1981), pp. 79-94.~

49. See: Kojïma, Kiyoshi, "Economic Integration in the AsiaPacifie Region,", Hitotsubashi Economic Journal, 16: 2 (February 1976).

~------- .... _----,._----

•

50. Integration.

51.

52. Interview with Ross Campbell (Ottawa: June l, 1983). if'

53. Ibid. 6

110.

54. John P. Schlegel, "A successful Alternating: the European Communi ty" The Round Table 269 1978) •

Canada and (January l,

55.

56.

Allan Gotlieb and Jeremy Kinsman, Option," International Perspectives 1981

Interview with Ross Campbell (Ottawa:

"Reviving the Third (January/February,

June 1,1983). , 57. From a total of CS1l3 million in 1976, accumulated in

vestment of Japanese licensed investment in 'Canada grew to C$715 million by 1978-79. Mining and forest products which account for 53% of accumulated total i(1 1979 are the two most i~portant targets for investment in Canada, mostly in B.C. and Albert~. However, Canada accounts for O'hly 3% of aIl outstanding Japanese fioreign "investment and its share Is decreasing. Joan GherSOn, Gilles Gratton: and Carl' H. MCMillan, "Foreign Investment in Canada: An Overview by Source," in International Business: A Canadian Perspective. Etemad, et al, (ed.) (Addison-Wesley publIcations, 1991), p. 304.

58. Langdon, Canadian-Japanese ••• , p. 107-108. 24.

59. Ibid. , p. 80.

f 60. Ibid., ~.·108.

Supr a ., nbte

61. Interview with Ross Campbell (Ottawa: June 1,1983).

62. Figures provided by Teleg10be.

63. Ibid.

64. Figures provided by Paul ,Tetreau1t (Post Canada.)

..

1 ·

j

, -1.

--\

\

111.

6sf Ibid. " '( Interview (by phone) with Spencer Moore of CBC.

. 66.

67~ Shigeru Nishitani, "Broadcasting in Canada," NBK (text writen in Japanese) •

(1982) ,

68. Ibid.

69. Ibid.

70. Interview with Margaret Buber (ottawa: June 17, 1983).

71. Delegation included CBC, Radio-Ouebec, TV Ontario, B.C. TV Broaàcasting system, Alberta Education Communication Corp., and the Broadcasting Association of Alberta.

72. In~erview (by phone) with Spencer Moore.

73. Facts obtained from CBC.

74. Interview with Frank Langdon (Vancouver: May 30, 1983).

?s. Interview with Gerald Wright (Toronto: June 9, 1983).

76. Interview with M.W. Donnelly (Toronto: May 20, 1983).

77. Interview with Gerald Wright (Toronto: June 9, 1983).

78. Interview with Malcolm Smith (Vancouver: May 30, 1983).

79. oSee:

80.

81.

82.

83.

84.

85.

86.

Ibid.

Supra. Note 57. *

Such as the announcement by Mitsubishi Electric Co. of, i.ts intention to establish a T.V. manufactur ing plant in Ontario.

Interview with Gregor Guthrie (Ottawa: May 12,1983).

Ibid. ~

Interview with Andre! Su1zenko (çttawa: June 17, 1983).

Interview ~ith Carl seigie (TOronto: May 20,1983).

- --, ~--~-~-------------- .-----------

112.

87. Annex B (3,a), it was pO, unti1 January 1, 1968.

88. Department of Industry, Trade and Commerce, "canada-u.S. Automotive Agreement," p. 2.

, 89. Department o'f Industry, Trade and 'Commerce, "Canada-U.S •

. Automotive Agreement," Trade balance in automotive products were (in billions of C$): 1965, -.6; 1971, +.;2, 1:n4, -1.9; 1976, -1; 1977, -1.1; 1981, -1.7. See also, ITC, "Bilateral Trade in Automobile products," in Canada's Trade Relations with the U.S. Volume II, p. 95. It Is reporteo that automotive trade figures fo·r the first quarter of 1983 show a surplus of C$525 million and for the fi rst half a surpius of C$1.1 billion owing to the popularity in the U.S. of car types manufactured in Canada. '

90. Frank Langdon, "Japan versus the European Community: ~he Automobile Cr isis," Journal of Europe~n Inte9ration 5: 1 (FaLl 1981), p. 90.

91. Hyman Solomon, "T,J.S.-Japan Auto deal may over1ook Canada," Financial Times (March 14; 1981).

92. Department of Industry, Trade and Commerce, News Release. (June 4,1981).

93. Frank Langdon, "Japan versus the European Community: The Automobi~e Crisis." Supra., note 90.

94.

95.

96.

Tbis represents a ro11back of 6' from the 1evel of ship-, \

ments . (185,022 uni ts) of the 12 months Apr iJ. 1980 to March 1981. ~

ITC reasoned that the action of holding up cars on the vancouver dock was necessary because the Japanese market share rose from 28.2% in 1981 from 8.7% in 1979. Canada Kewa Facts. (March 26, 1982).

Department of Externa1 Affairs, communique. (August Il, 1982) • The first year agreement ran from April l, 1981 to March 31, 1982. The second year agreement shifted from this fiscal year to the 'ca1endar ye.r, allowing

.63,000 units to be imported in' the period July l, 198~ to December 31, 1982. 90,000 units wer. imported from January l, 1982 to June 30, 1982. Thua, the total 'las 153,000 uni ts in the ca1endar year. On a ha1f year basis, it meant .a drastic reduction' of 30% in auto imports (from 90,000 to 63,000) "

~~--------~-- - ---~----

113.

97. Report of the federa1 Task Force on (he Vehicle and Autmobi1e parts industries, Strategy for Canada. (May 1983), p. 109.

Canadian Motor An Automoti ve

(;

98. Ibid.

99. Canada's

enge. conoml<:

100. Interview (by phone) with wendy Dobson.

fOl. Interview with Andrei Su1zenko (Ottawa: June 17, 1983).

102. Interview (by phone) with Y. Yamada (ottawa: 1983) .

June 17,

103. Figures provided by Sam Gindin (UAW) in an interview (To(onto: June 10, 1983).

t 104. Figures provided by Dennis Desrosiers (APMAC) in an

interview (Toronto: June 8, 1983).

105. Interview (by phone) with Y. Yamada (June 17, ~982).

106. Honda, Mazda," Nissan, Subaru, Suzuki and Toyota Canada, "Brief to the Motor Vehic1e and Parts Industry Task 0

Force, ft (March 1983). The six factors in the dec1ine of economtc activity in the Canadian auto industry (1979-1982) 'are: i. a combination pf unfavorab1e events in the North Ameriéan economy; ii.' the Canadian household's affordabi1ity problem in purchasing new large cars; iii. higher manufacturing costa in North America relative to Japan have r educed large demand: i v. Canada-U. S. energy policies have stimulated small car sales th.us boosting Japanese marl:tet ahare;. and the perceived higher quality of Japanese dlrs.

107. Report pr.e~ared for CAJAD by Singer Asaociates (August 1982) •

d

108. Ibid. p. 28.

109. Interview with Yuzo Hatano (Toronto: May 20, 1983).

110. Interview with Jun Sasaki (Toronto: May 19, 1983).

Ill. Interview (by phone) with Y. Yamada (June 17, 1983).

112. I,bid.

l

( )

114.

113. Interview with Sam Gindin (TOronto: June 10~ 1983).

114. Intervlew wi th Andrei Su1zenko· (Ottawa: June 17, 1983).

115. Ministry of Industry and Sma11 Business Oeve1opment, Province of Br i tish Columbia, "News Re1ease" on May 27, 1983. ~

116. Interview with John McKeown (Vancouver: May 31, 1983). (

117. Interview with torne·Seitz (Ottawa: June 2, 1983).

118. A 1etter sent to Gerald Regan (Minister of Trade) from Samuel F. Hughes (CCC) (April 13, 1983).

119. This is the same conclusion reached by Klaus H. pringsheim, Neighbors Aeross the Pacifie. (Greenwood Press, 1983); pp. 195-196 •

..

{

.... _______ --t ..... ~ ____ ---_ .. _t_,_-;i"'!t ... ; ... E -"!""""'------..;;.,..--------------.---

.,

1 115.

Beigie, Carl

Bruk, John

Buchanan, Tom

Campbell, Peter

Campbell, Ross

Coleman, Bob

L~st of Interviews

. prof essor of Management, AJniversity Toronto

, . , of

president of Cy~rus Anvil Mining Corporation _ (Marc Macguigan, SSEA, asked him to undertake a study of the feasibility of an Asia- Pacific Foundation.' He reported ~ack on S~ptember 23, 1982)

Canadian As~iation of 'Japanese Autodealers Association (CAjAD)

.!

Project Branch, Mihistry of State for Economic and Regional Development

former ambassador to Japan (1972-75) partner, Canus 'Technical Services Corporation •

Bureau of& Industr ial Economies, Off ie; C?f Producer g6ods. "' U .S. Department of Commerce.

Desrosiers, Dennis Director of Research, the Automotive Parts Manufactures' Association of Canada

,. Donnelly, M.W. Associate Professor of Political Science,

University of Toront~

Dykes, James

Forcier, Pierz:e

Gindin, Sam

Pres~dent of the Motor Vehicle Manuractur'es Assoclation

Direction des Affaires d'Asie. et d 'Oceanie, Ministere des Affaires intergouvernementales, province du Quebec

Research Depàttment, Workers of Canada . .

1 .,.'

the United Auto

Guthrie, N. Greger '?resident of Japan-Canada Trade Council

Hatano, Yuzo

Bolme's, John

Buber, Margaret

the Consulate General of Japan (Tor~nto)

the Canadian Institute of~ I~ternational Affairs (Toronto)

Japan, South ,?aci.fic and ~xporf S"ervices Division, Office' of Trade Development, ~ ~;."'~~

.'

" ,

(

~ . i ____ ---.._.~ ___ ~ ___ ....... _ .. __ ·~,""$Zi""""'---':'-----------_·_~------- ---f

...

,--

116.

of External . . Asia and Pacifie, Affairs.

Department

Iwatake, Toshihiro

Jackson, Kevin

Kidd, Stu

Lalande, Gilles

Langdon, Frank C.

Lavell, Patr ick

Loader, Denni s

Maduro, Morris F.

McCaque, Raymond

McKéown, John

Milot, G .M.

Pringsheim, K.R.

Rankin, Bruce

. .... Director of the Japan Automobile Manufac-turers Ass6ciat ion, Inc. , washington Office.

Economist, Economic Development Branch, Ministry of Treasury and Economies, Province of Ontario .. Grain Mcftketing Officè, Canadian Grain ~ommission, Ministry of Agriculture, ottawa. /

Office of the Çommissioners of Official Languages, Ottawa

Professor of Poli tical scienc;:e, Uni versi ty of Br i tish Columbia

President of the Automobile Parts Manufactures' Association of Canada

Trade and Ministry of Columbia

capital projects Branch, Industry, Province of Br i tish

Director: Asia-Pacific, 19ternational Di vision, Federal and Int'ergovernmental Affairs, Province of ,Alberta \

Internat.ional Mar keting Consul tant: Japan Specialist, Ministry of Industry and Trade, Province of Ontario

Assistant' Deputy Minister, Ministry of Industry, Province of British Columbia

oJapan, Soutn Pacif ic and Export Services Division, Office of Trade Development Asia and· Pacifie, Department of External Affairs .

[Associate Professor of poli tical sciencé McMaster University

former INCO

ambassador J

to Japan, Director of

-......,-, ------------_._-----------_.-_ .. - ---.. -- l

. "

1

, .

• 1

.Sasaki, Jun ,

Seitz, Lorne

Slone, John

Smi th, _ Malcoln

Sugano, Shozo

Sul~enko, Andrei

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Japan:. Political, Science and Technology, North Asia and Pac'lfic Division, Bureau of Asia and Pacific, Exte~nal Affairs

Professor· of law, Director of Japanese Le9al S1:udies 'f- Uni versi ty of British Columbia . ':

\

Gener al manager' of JETRO, Montreal Office

. Economist, Econolyncs International. Ltd., Ottawa

Trigg, Eric Austin Senior Vice-President of Alcan -Aluminum Ltd.

1

Worton, Jane

Wright, Gerald

vanRoggen (Hon.), G.C.

Zahavich, T.S •

..

lit ....

Ministry of Intergovernmental Provi~ce of Ontario

Vice-president of the Donner FQundation

Senator .

. policy Resear.c~ Division, FIRA

\1

Affairs,

Canadian

..

\

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