The United States and Canada have had a more or less parallel economic development throughout their histories and they have emerged from World War II as the two most important creditor nations of the world. It is not surprising, therefore, to find that their foreign economic policies and objectives are similar in character. Our countries are the leading champions of liberal trade policies and of a world system of multilateral payments. They constitute the vanguard in the fight against economic blocs and restrictive exchange and trade practices. Not only is a large portion of the foreign trade of both Canada and the United States dependent upon a system of multilateral payments but trade between Canada and the United States requires settlement by means of a Canadian surplus with third countries.
The differences in our approach to international economic problems stem largely from the difference in the relative importance of foreign trade in the two countries. In 1938 Canada's total foreign trade amounted to nearly 40 per cent of her national income, while total exports and imports of the United States were only 8 per cent of United States national income. On the other hand, United States exports in 1938 were three and a half times the value of Canadian exports and the world supply of United States dollars has been generally recognized as the most important single factor in world trade. (I believe that in the future when we speak of a “dollar shortage” it will not be necessary to differentiate between United States and Canadian dollars.) Canada, therefore, has the greater immediate economic interest in world trade, but the United States has, in a sense, the greater responsibility. Canada must adjust her economy to a given international economic environment while, at the same time, co-operating with other countries in the creation of a more favourable world environment. The primary concern of the United States must be with the environment itself. Needless to say the task of our administration in promoting a worldwide liberal trade programme would be far easier if United States foreign trade were 40 per cent of our national income instead of less than 10 per cent.