The Development of Postwar Canadian Trade Policy: The Failure of the Anglo-European Option

Gregory A. Johnson is an assistant professor of history at the
University of Alberta.

Bruce Muirhead has produced a superb study of the evolution of Canadian
foreign economic policy from the 1930s to 1957. Utilizing primary
sources from Canada, the United States, and Great Britain, he
demonstrates convincingly that Canadian policy-makers were deeply
committed to the establishment of a multilateral, nondiscriminatory
international trading system. In practical terms, this meant building
wider trade relations with Britain and the European community, rather
than relying on closer bilateral trade ties with the United states.

Canadian officials failed to obtain this objective, Muirhead argues,
because they were constrained by the international postwar context.
Canada ran into a series of problems over which it could exercise little
control: shortages of U.S. dollars, Britain’s desire to maintain a
sterling bloc, nontariff barriers, and European import restrictions. The
result was that Canada had no options to pursue other than the one it
did namely, closer trade relations with the United States.

This book takes direct aim at the assertion that postwar Liberal
governments systematically “sold out” Canada to the United States.
Readers should be aware, however, that this is no simple polemic against
the sell-out thesis. Muirhead is willing to concede that by the late
1950s certain Liberal policies seem to have led Canada into a dependency
relationship with the United States on the domestic level. But this was
far from the case with respect to foreign economic policy, where the
Canadians actively sought to prevent a dependency relationship with the
Americans. This raises an interesting question, not addressed by
Muirhead, about the relationship between foreign economic investment and
foreign trade. Nevertheless, his book is a valuable addition to a small
but growing body of literature intent on demonstrating that older
interpretations of postwar Liberal trade policy need to be revised.