Remarks With Prime Minister Pearson Upon Signing U.S.-Canadian Trade Agreement on Automotive Products.

THE PRESIDENT. The Prime Minister and I, with Secretary Martin and Secretary Rusk, are about to sign a historic agreement, an agreement for free trade on automotive products between Canada and the United States.

Two years ago it appeared that our two countries might have grave differences in this great field of trade. We faced a choice between the road of stroke and counterstroke and the road of understanding and cooperation. We have taken the road of understanding.

This agreement is the result of hard work on both sides all along that road. I am sure that the Prime Minister joins me in expressing our hearty thanks to the negotiators on both sides and to their chiefs, Mr. Rusk and Mr. Martin.

Mr. Prime Minister, would you like to say a word before we sign?

PRIME MINISTER PEARSON. Mr. President, I share completely your satisfaction as we are able today to sign this automotive agreement, and our expression of thanks to those, including the Secretary of State and the Secretary of State for External Affairs, who conducted the negotiations.

This is one of the most important accords ever signed between our two countries in the trade field. As you say, we faced a very difficult situation in this particular area of industry, and through hard work and patient negotiation we have concluded an agreement which is of benefit to both countries. In effect, we have agreed to rationalize the production of our respective industries and to expand our production and trade through a dismantling of tariff and other barriers in the automotive field. This wasn't accomplished easily, and it could not have been accomplished at all if there had not been that mutual understanding, good will, and. confidence which has grown up between our two countries over the years.

A measure of the significance of this agreement is basically this: Canada and the United States trade more with each other than any other two countries. Indeed, about one-fifth of your exports go to Canada, and automobiles and parts constitute the largest single category in that trade.

I am confident that this agreement will result in an even greater flow of two-way trade, and eventually the consumers on both sides of the border will share in its benefits.

Mr. President, I have said to you many times and you have said to me many times, that there are no problems between our two countries which can't be solved if we work at them hard enough and in the right spirit. This is what we have done in this agreement which we are about to sign.

[Following the signing ceremony there was a brief question and answer period.]

THE PRESIDENT. Mr. Prime Minister, would you like to make some observations and answer questions before you leave?

THE PRIME MINISTER. If there are any questions about the agreement or anything related to the agreement that you would like to ask, I would be glad to deal with them.

We are leaving here immediately after the signing, Mr. Martin and I, for Washington, and then later going home.

We have had a wonderful visit to the ranch. It was very considerate on the part of the President to provide the kind of climate this morning we are accustomed to. I notice some of you people seem to be taking it very hard. This has been a short but very, very happy visit. We had some interesting discussions last night in a homey and friendly atmosphere.

I had the pleasure and privilege of being taken around the country by the President immediately on arrival. I wasn't able to take my hat into the house before I was put on a jeep. It was wonderful. I saw a lot of deer. They were very small deer. They were very friendly. Up in Canada they are bigger and wilder.

Q. Mr. Prime Minister, why could not this agreement be used as a basis for other agreements in other industries ?

THE PRIME MINISTER. Well, as far as we are concerned we would like to explore that possibility. This agreement may be important not only in itself but it could be important from that point of view. But the automotive industry, the organization of it on this continent, lends itself to this kind of agreement more easily than other industries. But we will certainly be anxious to have a look at the other situations to see if we can apply this. Anyway, we made a start.

Q. Could you run over briefly the other subjects you discussed ?

THE PRIME MINISTER. Well, we had a chance to look at some of the other problems-bilateral problems--between our two countries that we are working on, economic and financial problems, the problem of air traffic between our two countries. I hope we will reach an agreement before long.

Then we have been looking at the U.N. problem. There is some difficulty there, as you know, facing the U.N. on financing and the proposed withdrawal of Indonesia. And the President has been discussing with me some of the problems of southeast Asia and difficulties there. International problems-we have of course in Canada a great responsibility, as the United States has, which is important for us to know about and see what we can do to help cooperate in it.

Q. Mr. Prime Minister, was the question of trade with Communist China discussed?

THE PRIME MINISTER. No, except in a casual way. We have been selling wheat and grains to China now for some time, and there was no particular discussion about that. Of course, we don't send anything to China on an agreed prohibitive list.

Q. Mr. Prime Minister, were there any other bilateral matters under discussion ?

THE PRIME MINISTER. No. We mentioned the air negotiations as one that is most active at the moment and hope there will be an agreement before long.

Q. What does this involve?

THE PRIME MINISTER. We have had a problem between the two countries and we tried to bring that up to date in the light of new conditions, new developments in air traffic.

Q. [Inaudible]

THE PRIME MINISTER. We have an interest in these matters, but then under our aid agreement to countries in southeast Asia we are trying to be as helpful as we can in that part of the world.

Reporter: Thank you, Mr. President and Mr. Prime Minister.