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

B.W. Muirhead traces the development of Canadian trade policy and trade patterns from the Second World War to the election of the Diefenbaker government in 1957. Scholars have emphasized the importance of this period in determining Canadian trade patterns, but have disagreed about the options Canada had and the decisions Canadian governments made. Muirhead demonstrates that Canada's options were so severely constrained by the postwar context that there were in effect no choices to make. He thus makes a strong case against the theory that Canada "sold out" to the United States.

Muirhead agrees that any government must work to maximize national income and independent choice. He shows that Canada actively pursued a policy of multilateralism and non-discrimination as epitomized by the General Agreement on Tariffs and Trade. In addition, the government tried unsuccessfully to resurrect commercial ties with the United Kingdom, its largest pre-war overseas market. Muirhead finds that in both these efforts Canada was thwarted by postwar realities that hindered its exploitation of markets in Britain and Western Europe. The United States remained the only market able and willing to absorb the billions of dollars of Canadian exports on which Canada's prosperity depended.