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28. The annual increases in United States printed exports to Canada in 1964 and in 1965 were more than double the total volume of similar Canadian exports to the United States.

29. On the other hand, the official data of both countries may grossly understate the true disproportion. Individual shipments of less than $100 are not broken down in the trade data of either country. The United States ships to Canada vast quantities of books, periodicals, direct mail advertising, and printing material accompanying other goods. These shipments are not recorded by Customs, and therefore are not included in statistics. There is some movement of such printed matter in the opposite direction, but, in view of the nature of the two economies, the flow of unrecorded printed exports by Canada is relatively insignificant, and imperceptible on the American scene.

30. This basic disproportion in trade in printed matter between Canada and the United States would persist if such trade were completely unfettered. Within countries the publication and printing of books and periodicals tends to be concentrated in the major urban centres and not in those areas where wages are lowest. In English-speaking North America, nearly all the major urban centres are in the United States. Slightly lower wages in Canada would not suffice to draw any substantial production away from its natural locale.

Nevertheless, relief of Canada from impact of the United States manufacturing clause would be of substantial benefit to the Canadian printing and publishing industry.

It would permit Canada to compete for books and other copyrighted printed matter written primarily for the North American English-speaking market, regardless of the nationality or domicile of the author. With the manufacturing clause, if the author is either an American citizen or domiciliary and if there is likely to be a market for more than 1,500 or 2,000 copies in the United States, Canadian publication is inadvisable. The fact that it is normally uneconomic to print two simultaneous editions-one Canadian, one American-for the continental market results in manufacture of the whole edition being forced into United States plants. Unless the publication proves to be very popular in both countries it will be more profitable to publish in the United States only and to supply Canadian requirements from there. Indeed, even if United States requirements are less than 1,500 or 2,000 copies, it may still be more satisfactory to have the entire run printed there in order to avoid the risk of delays of shipments arising out of suspected infringement of the manufacturing clause. This situation means that the Canadian printer is denied a fair share of the North American market.

31. It would be reasonable to expect that Canadian printers would have little evidence of business actually lost by reason of the manufacturing clause, because they were never intended to possess or to enjoy the type of business at issue here. However, instances have occurred which illustrate the damaging consequences specifically. Thus we can draw upon case histories to document this submission. 32. Because of commercial relationships, it has been necessary to obscure the identities of individual companies in several examples; but four cases are cited below and a number of others are given in Appendix A. Some arose because of the difficulty of distinguishing the legal difference between domicile and residence. Fear of an adverse ruling often is the deciding factor.

(1) Longmans Canada Ltd., as this submission is being prepared, is publishing a book, How to Play Hockey, by Bobby Hull, the Canadian star of the Chicago Black Hawks. Technically, we understand, the manufacturing clause would not apply to the author because he is permanently domiciled in Canada. However, since he is a resident in the United States for a longer period of the year than at his permanent home in Canada, doubt and uncertainty beset his Canadian publisher.

For economic reasons, the number of copies required for the Canadian market had to be included in the American printing. The cost of printing a second time for the same first edition would have been prohibitive.

To avoid any possible entanglement with the manufacturing clause, the Canadian publisher felt it necessary to print in the United States rather than in Canada. The initial printing called for 40,000, a sizeable order for any printer. Thus the threat of the manufacturing clause had the effect of depriving the Canadian industry of the entire manufacturing operation.

(2) Longmans Canada Ltd., in 1965, published a book by another Canadian citizen, Professor Peter Regenstreif, currently on the staff of the University of Rochester. Entitled The Diefenbaker Interlude, this book analyzed the motiva

tion behind the voting in Canada in a series of critical elections. It might be described as a scholarly trade book, with application to political science courses in Canada and in some American universities.

The American market in this case was small, and did not justify an American edition, but the Canadian publisher was advised not to print copies in Canada and to export them to the United States because the author, under all the circumstances, might be found by a court of law to be a domiciliary of the United States. (Thousands of Americans teaching and working in similar and other capacities in Canada do not encounter any similar restriction by Canada.)

(3) Universal Printers Ltd., Winnipeg, Manitoba, actually was printing paperback books prior to 1964 for several American publishers. This business amounted to some six titles per month, with runs varying from 10,000 to 20,000 copies, and worth about $150,000 per year at 1967 prices. This natural commercial relation· ship between our two countries was frustrated when United States Customs in voked the manufacturing clause. The nationality of some of the authors of copyrighted material was found to be American. Entry of their works was refused. The result has been that the United States publishers, thus forcibly acquainted with the United States Copyright Law, have withdrawn their business from Universal Printers Ltd.

(4) Within the past two years a Canadian printer was awarded a contract amounting to $1,000,000 annually for the printing of one of the more popular magazines distributed on both sides of the border.

The printer drew the attention of the American publisher to the manufacturing provisions in the United States Copyright Law. Investigation by the publisher resulted in cancellation of the contract. The printing remains in the United States, and the magazine continues to enjoy circulation in Canada.

Canadian Printed Imports from United States

vs. Canadian Printed Exports to United States (Comparison given in millions of Canadian dollars)

Total Imports from United States (1964)

One-Year Increase in Imports from U.S. (1964 to 1965)

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United States printed exports to Canada in one year, 1965, increased by more than double the total of Canadian printed exports to the United States. (Based on official Canadian statistics.)

33. The effect of the manufacturing clause is to deny Canada the opportunity to solicit, or to secure, a fair share of trade in the commodity for which it is the biggest American customer, by obstructing normal transactions which would result in manufacturing being done in Canada. Removing Canada from impact of the clause would not lead to any wholesale transfer of printing business from the United States to Canada. Any transfer would be very small by American standards, and would not injure the United States industry. It would be a positive benefit to the Canadian industry, and would eliminate an important and justified Canadian grievance.

Origin of Imported English-Language Books and Pamphlets (Canada-1965)

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THE EFFECT OF RELIEVING CANADA FROM THE MANUFACRURING CLAUSE

34. Maintenance of trade in printed material with Canada is certainly beneficial to the United States, whose printed exports to Canada through Customs channels alone rose by $14.8 millions from 1963 to 1964, and by $18.3 millions from 1964 to 1965, to reach $135.9 millions. The real total-taking account of statistically unrecorded books, newspapers, periodicals, catalogues and other advertising entering by postal channels, and of printed packages, warranties, instructional materials, etc., enclosing and accompanying other commodities—in our opinion would be well in excess of $300 millions. (See chart, p. 710.)

35. Already a major customer for American manufacturers of printing presses and equipment, the Canadian printing industry would become a still better customer if allowed to grow with the North American market. (See Appendix K with regard to Canadian imports of United States printing machinery and equipment.) (See chart, p. 710.)

36. The employees in major producing centres in Canada and in most of the substantial plants are members of the same international unions as many employees of the American industry. Three metropolitan centres-Montreal, Toronto and Vancouver-account for 64.1% of all Canadian printing production (using 1963 statistics). Wage levels for printing craftsmen in these areas are nearly equal to, and in some instances a little higher than, the wage levels of printing craftsmen in a number of American cities. As in the United States, the 372-hour week is general in the Canadian industry, and the 35-hour week is now effective throughout most of the lithographic trade in Eastern Canada. Fringe benefits are similar.

37. The board of governors of the International Allied Printing Trades Association, meeting in Monterey, Cal., on November 21, 1966, passed a resolution stating in part that IAPTA "is determined that their Canadian union members

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shall not be placed at a disadvantage in relation to their United States brother members" and "is strongly in favour of fair and equitable arrangements for both United States and Canadian members governing the flow of work between the two countries, and to this end will support the efforts of the Canadian members to adjust the inequities and will make representations to the appropriate United States Government Committee to achieve this objective."

IAPTA membership includes the International Typographical Union, Lithographers' & Photoengravers' International Union, International Printing Press

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(The following chart accompanies paragraph 35.)

U.S. Exports of Printing Machinery & Equipment (1965)

Canadian Imports of U.S. Printing Machinery

$23,308,387 (Canadian Dollars)

$77,902,488 (U.S. Dollars)

men & Assistants' Union of North America, International Brotherhood of Bookbinders, and International Stereotypers' & Electrotypers' Union.

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38. The printing industry of the United States-management (specifically including the book manufacturers) and labor-has been urging relief for Canada; and, most certainly, it is not asking to be protected from Canada by means of a manufacturing requirement or other unusual devices.

39. With this great body of supporting opinion and representations, we feel that the United States Senate will be thoroughly justified in acting so as to ensure effective relief from the manufacturing clause, which is uniquely and overwhelmingly discriminatory against Canada. This effect can be quickly grasped by glancing at Appendices C, F, and G, which are reproduced from reports of the United States Department of Commerce.

40. As we have already said, whether or how United States law shall be changed is solely for Americans to decide. We in Canada can only do our best to explain and to emphasize the seriousness of the problems created by the manufacturing clause, and to give examples of economic damage done in particular

cases.

41. In conclusion, we repeat and re-emphasize, the effect of the manufacturing clause is to exclude the product of Canadian labor, resulting in depression of Canadian labor and industry.

If impact of the manufacturing clause on Canada were removed, the United States would continue to enjoy an enormously favorable balance of trade with Canada in printed products, but then, and only then, would we approach reciprocity and equity in principle in the realm of printed matter.

Respectfully submitted.

W. S. CURRY,

Chairman.

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