The difficult decision-making process of Canada in wheat trade with China

 

             --- Review the lessons of history to avoid detours.

           Frank Oct. 17, 2015, in Waterloo, Ontario, Canada

    This article is excerpt translated from mandarin book of The diplomatic negotiations of new China. 

     Contents

  1..The initiation of Canadian wheat trade to China

  2..The political resistance for trading wheat to China

  3..Canada's Minister became good friend of China's Premier

  4..We need a rational leader to avoid the repeat of the historical mistakes 

1..The initiation of Canadian wheat trade to China 

   In Oct. 1960, Prime Minister John Diefenbaker reorganized the government of Canada, as Minister of the former Ministry of Northern Affairs and National Resources, Hamilton Alvin was transferred as the Minister of Agriculture.

   Hamilton took office, immediately faced to solve a major problem that predecessor encountered: Since the 1950s, Canada's production in a large number of surplus grain, which affecting the economy and the life of Canadians. Hamilton ignore the comprehensive anti-China policy embargo on China, which ordered Western allies by the United States to open up the extremely broad market of China. In the autumn of 1960, the initiative sent envoy to Beijing for the contact.

   In the same year November, the buyers of China also went to Montreal, thus, Canada and China quickly made first food business.

   At that time, China suffered three years of natural disasters, was extremely lack of food. It made China as an large international grain buyer. In early 1961, China and Canada signed a purchase agreement 28 million bushels and 12 million bushels (two total combined 1,000,000 tons) of cereals.

   The first grain trade agreement was pioneering, it paved a significant way for Canada's rapid growth surplus of wheat, but also it opened door to China politically. So that Pierre Trudeau could realize his long-cherished wish to visit China in 1962.

    The success of the first trade was excited and encouraged Hamilton, and he immediately started planning negotiations with China to sign a long-term food trade agreements. To this end, he took a consideration of the "gift promotion" program, which was giving a certain amount of grain to China to promote China long-term buy Canadian grain.

   At that time, China has been greatly limitations in foreign trade, due to that the United States launched anti-China policy of isolation and economic blockade, the foreign exchange reserves was extremely shortage. So that China was difficult to pay Canada by foreign exchange.

   In 1961, in a talk for long-term food trade, China side proposed a solution: in the next two years and a half, to buy about 5 million tons of wheat and 1.28 million tons of barley, but, with the proviso that had to use the loans of Canada. China side stressed that: loans is the main condition, China's solution can eat huge surplus grain of Canada, it is great benefit to Canada.

   After careful consideration, Hamilton smiled and said: "Backed with thousands of years of civilization, Chinese people are lack of dollars but never lack of wisdom." 

2..The political resistance for trading wheat to China 

   However, this scheme met with strong resistance in the Cabinet discussion. Firstly, the Minister of Finance and Minister of Foreign Affairs strongly opposed. Because the bank loan demands government guarantees, which means that Canada actually recognizes the Government of People's Republic of China. Opponents also worry that China may take Canadian food as military reserves. Some opponents also fear reprisals from the United States on defense issues, or to reduce capital investment in Canada. Others worry is that Chinese people might repudiation in paying Canada. Cabinet disputed endlessly.
　In the first wheat trade made with China, the Americans immediately responded with banned exporting vacuum pump for handling grains, also prohibited Mobil to provide fuel for transportation ship. The Prime Minister Diefenbaker and Hamilton are extremely annoyed. Diefenbaker told the US ambassador: you tell President Kennedy, if this shoe sets in you Americans feet, what you feel?"

   When Canada's cabinet repeated debating, that China was started to negotiate with Australia on grain trade. The information reached Ottawa from Hong Kong China, Hamilton sensitive felt that the message indicates that Canada may lose this come opportunity.

   Finally, in order to facilitate this long-term grains trade that was extremely beneficial to Canada, Hamilton determined to guarantee by his political life. In April of that year, on the first cabinet meeting, after the opposition made statements, Hamilton stood up, morally glanced at the venue, seriously said to the Prime Minister Diefenbaker with such remarks:

  "His Excellency Prime Minister, if this extremely beneficial for Canadians of grain trade agreements cannot be passed in the cabinet, then, as Minister of Agriculture, I have to resign. I hereby declare that, after the agreement is signed, if China missed appointments Repudiation, please replace me, however, to announce the real reason of my resignation. Prime Minister, if you does not agree with my resignation, please approve to give Chinese loans"..

  Nearly seventy years old white-haired Prime Minister Diefenbaker heard, showing a little, looked a little surprised, and soon returned to normal.

  The prime minister Diefenbaker who served as a lawyer for 20 years in rich grain western Canada, He knew the vital interests of the majority of farmers. He looked around the participants in silence, in a very quiet voice: "Look, you see this man is really going to resign, and you have heard that he is the real thing, because, he believes that is a program totally in favor of Canadian national, if you do not agree, whether ready to make the same, to resign."

  The venue was very quiet, no one objected.

  Old prime minister nodded slightly and said: "Okay, well, we do not need to discuss it any more. I got what I wanted."

  Later, in April 22, 1961, China and Canada signed the first long-term wheat trade agreement. According to the agreement, China prepaid 25% cash, and the rest using Canadian loans, the duration was 9 months. In the practice, the implementation of the loan amount broken through $ 100 million. By the first long-term food trade agreement, Canada sold a total $ 362 million of grain to China, and, since then the history of Sino-Canadian wheat persistent trade began. 

3..Canada's Minister became good friend of China's Premier 

  Between March and April 1964, after retirement, Hamilton and his wife visited China. China Premier Zhou Enlai gave them a cordial meeting with a banquet. Canadian newspapers had reported that, China host told the guests: "1959-1961, famine almost shattered our passion. When we, the whole country made great efforts to explore the way out, we have no friends, but, only you began to sell our wheat."

  Premier Zhou Enlai told Hamilton: in past, Chinese people have good friends Norman Bethune  and Chester Ronning from Canada, and now, there has been like you. Chinese people have never forgotten the old friend that associated in the tribulation period. Sure enough, after the difficult period of three years, in particular in the late 1960s, though, the agricultural production of China has been restored, food output increased, however, China was only not decrease the grains imports from Canada, but also increased the amount in imports year by year.    

  That one hour and half conversation with Premier Zhou Enlai deeply impressed mr. Hamilton.

  In the later years, Mr. Hamilton lived in Ottawa, he recalled this feeling of the conversation to the visitors from China, Zhou Enlai was so sincere, frank and respected. From 90 minutes of talks, I realized that he was keen to tell me that the one thing he most want to do before the end of his political life was to make America and China, in some way, to restore harmonious relations.

  Hamilton was deep touched by Zhou Enlai, after which, based on his own understanding of Zhou's wishes, he extensively contacted the US lawmakers and politicians, including the President Johnson and the Chairman of the Senate Foreign Relations Committee William Fulbright to convey the desire of the government of China to achieve reconciliation between China and the United States. In the process of mobilization for Americans and Chinese return to normal, he mentioned China's proposal "by trade to achieve peace", it was real attractive for the Americans.

  The article Hamilton, Alvin (1912–2004) reported that in 1960, as Agriculture Minister, Hamilton Alvin was not only to sale massive grain to China and also increased exports to other Communist countries despite the strong opposition of the United States.

  We may say that, in a large extent, it was that Hamilton Alvin saved agriculture of Canada.

  Now, I think of the U.S.'s Alexander Hamilton who was a founding father of the United States, chief staff aide to General George Washington, one of the most influential interpreters and promoters of the U.S. Constitution. As the first Secretary of the Treasury, he successfully solved the huge debt: $54 million including interest and states owed another $25 million from the revolution by Revolving door plan that government assume the entire debt of the federal government and the states, then to retire the old depreciated obligations by borrowing new money at a lower interest rate.

  The men who is called as Hamilton is most rational.

  I wish that Hamilton is the top leader of Canada.

 4..We need a rational leader to avoid the repeat of the historical mistakes 

  The main concern of my cost so much time to mention historical events is intended to avoid the repeat of the historical mistakes.

  I hope that by looking back at the hardship of politicians in rationally dealing with thorny issue - surplus grain of Canada, which will be also the a long term issue of Canada, to raise the awareness for present Canadians, in dealing with Sino-Canadian relations, that takes the economic interest as the first priority is the only right way. A rational leader of Canada must be able to dump the childish argument in political ideology.

  It is inevitable that historical tragedies are being staged repeatedly, due to there always some mindless people are more on ideological less on pragmatically.

  The political vision of New Australian PM Malcolm Turnbull may provide a Rational Enlightenment to treat the sick of those mental defectives.

  Sept. 14, 2015, article New Australian PM Malcolm Turnbull Faces a Tough Economy reported that: "Turnbull, a former investment banker with strong support from much of the country’s business elite, promises a less ideological and more pragmatic approach to government. We can expect less focus on issues of concern for social conservatives and more on getting the national economy rolling again, bucking the trend we see now in Europe and the United States."

  In self-pride of democratic government of Canada, there is always irrational policy maker to oppose any rational resolution in regardless it is in great favor of the people of Canada. So that a rational and decisive top leader who can bold act against all the odds with less concern for own interest, as that of the former Minister of Agriculture Hamilton Alvin and New Australian PM Malcolm Turnbull is essential.

  Today, as a most quick development country China, for Canada, the significance is not only limited in agriculture, but with great broader aspects. For well developing the market of China, we need a man who has such potential to take the power of Canada.

  Then, in current Canada, who is the best one, the one is worth us to support for.