POLI 243 Lecture Notes - Eastern Canada, Free Trade

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4 Apr 2012
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The Reciprocity Election of 1911
Laurier’s failure to liberalize trade 4/3/12 11:00 PM
The election of 1911 was focused on a trade agreement between the US and
Canada. The trade agreement had been a platform for the liberals for quite
some time.
The Liberals Reinterpret the National Policy
Sir Wilfird Laurier leads the Liberals to power in 1896.
The Liberals are unhappy with the National Policy but do not
completely throw it out.
Crow’s Nest Pass Agreement
o Liberals do not agree that the railroad should have a
monopoly on transportation from east to west. They want to
introduce competition.
o Wanted to reduce tariffs on the crow's nest past
o reduced fares so the monopoly would not move forward in the
future
Laurier’s government seeks more immigrants ! Clifford Sifton’s
role
o He improved the type of immigrants that were coming into
the country ! looking for farmers to farm …etc…
o set up offices in other countries to let people know what kinds
of opportunities they have in Canada
o they attracted immigrants who would come and stay
o Under the Tories, any immigrant could come and move to any
plot of land they want
o By the 1940's, Canada was a major exporter of grain
But tariffs unchanged ! U.S. unreceptive
o The republicans won the U.S. election at this time, and they
wanted to raise the tariffs
o the Liberals of Canada had no way to change their tariffs
because there was no one internationally who would listen
Liberals appear to prefer trade liberalization
The Election of 1911
Laurier still leading the Liberals
Western farmers demanding free trade
Quebec divided by economic and Imperial issues
Britain rejects own policy of preferences
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The Campaign in 1911
Secret negotiations with U.S. in 1910
Results announced- stuns the Tories
Swiftly, Ontario businessmen announce opposition
Sifton says he is against it too
o you are not going to get businesses in the West if you reduce
tariffs
Laurier departs for London…
"Unholy Alliance” formed
o a deal between the Tories and the Quebec Nationalists
o Nationalists say that Laurier is too close to London
o Tories say Laurier is too close the the U.S.
o start bashing Laurier’s personal beliefs and character
o The Tories and Nationalists decide who will campaign against
Laurier in Quebec
Interpreting the Results
Stolper-Samuelson predicts: factor based
o The most important issues before the voters was economic
o It is easy to move factors around
o Owners of abundant factors should prefer free trade
" land owners should like this ! the mass of Canadians in
these days were farmers
o Owners of scarce factors should prefer protection
" Tories did really well in the cities
" the Liberals did not sweep the country side
" All the land owners did not stand together
Sector-Specific Approach predicts: sector based
o Look at how producers combine factors of production
o For the urban areas, land is not really important
" capital and labor are the most important
" these sectors want protectionism
o The only ones supporting free trade are those who use a lot
of land in their production
o If tied to abundant factor intensive sectors, then should prefer
trade liberalization
" wheat farmers: just need a lot of land
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