Trudeau policies could generate frictions with US

The surprise return of Pierre Elliott Trudeau to a fourth term as Prime Minister of Canada could worry the United States. Prime Minister-elect Trudeau's leaning toward economic nationalism, emphasized again in his campaign promises to Canadianize more of this country's many US-owned industries, and his traditional anti-militarism were tolerated by Washington in the 1970s.

But they could cause genuine and long-term US-Canada frictions should today's cold war atmosphere continue through the 1980s.

Pierre Trudeau was Canadian Prime Minister from 1968 to May 1979, when he was defeated by the Conservatives under outgoing Prime Minister Joe Clark. Mr. Trudeau's defeat of Mr. Clark on Feb. 18 brings back into office a tough political warrior, if not a cold war warrior.

In 1969, at the beginning of his long era in power just renewed, Mr. Trudeau sliced in half Canada's NATO forces in Europe and placed financial and equipment restraints on Canada's backward armed forces. Last year he delayed approval of desperately needed new fighter aircraft and warships for the Canadian military.

Now that he has returned ot office, Mr. Trudeau might have to change his tune on a Canadian boycott of the Moscow Olympics. During the election campaign he rejected an outright boycott and said Canada would not go in that direction unless there was a major move by Western and third-world nations to do so.

His economic policies as outlined during the winter election campaign just concluded here, will really concern Washington.

Pierre Trudeau's return to power, which he will hold until 1984, could mean tougher government control over the $38 billion stake of US branch plants in the Canadian economy.

Mr. Trudeau has pledged to reduce foreign ownership in the Canadian oil industry from 75 to 50 percent, making up for an unkept promise from the 1974 federal election to cut foreign control of Canadian resources development to 50 percent.

There were campaign rumblings from him that the "big four" automakers in Canada, General Motors, Ford, American Motors who along with the ailing Chrysler completely dominate the Canadian car industry, will have to beef up their research in Canada or face stiff corporate tax penalties.

Other possibilities, not pinned down by Mr. Trudeau during the election campaign, include an export tax on Canada's very large natural-gas exports to the United States.

Canadian oil imports to the US have included a surcharge since 1972. This measure was imposed by Donald Macdonald, Mr. Trudeau's Minister of Energy at the time, who remains his possible heir-apparent though he is out of politics at present as a Toronto corporate lawyer.

How Mr. Trudeau might interfere in other Canadian industries controlled by outside interests is seen in the growth of Petro-Canada, the state oil corporation which his previous government created in 1974.

Through expansion and outside purchases, Petro-Canada is already Canada's seventh largest oil company. It serves something of a watchdog role in an industry dominated by US multinational oil giants.

It has been diversifying by buying out the Canadian retail operations of two of them. These are Atlantic Richfield Canada Ltd. and Pacific Petroleums Ltd., former Canadian subsidiary of Phillips Petroleum Company of Bartlesville, Okla. The $1.4 billion paid by Petro-Canada for Phillips Canadian gas stations in 1978 remains the largest corporate takeover in Canadian history.

The seven-month-old Conservative government now defeated had promised to return most of Petro-Canada to provide ownership, but to maintain its regulatory role in negotiating Canada's foreign-oil imports.

But Mr. Trudeau's return means Petro-Canada is safe and planning to expand its operations into alternate fuels to gas and oil.

You've read  of  free articles. Subscribe to continue.
QR Code to Trudeau policies could generate frictions with US
Read this article in
QR Code to Subscription page
Start your subscription today