Foreign Relations of the United States, 1951, National Security Affairs; Foreign Economic Policy, Volume I

411.426/8–2751

Memorandum of Conversation, by Mr. Constant Southworth of the Office of British Commonwealth and Northern European Affairs¹

restricted

Washington, August 27, 1951.

Subject: US restrictions on imports of certain agricultural products

Participants:	Mr. W. D. Matthews, Canadian Minister
	Dr. W. C. Hopper, Agricultural Counselor, Canadian Embassy
	Mr. Linder, E
	Mr.Leddy, EDT2
	Mr. Southworth, BNA

Mr. Matthews delivered the attached note to Mr. Linder formally protesting against the recent establishment of restrictions on imports of fats, oils, and other dairy products into the US.

He said that the immediate effect of establishing such restrictions, particularly the quota on Cheddar cheese, which according to him is only 41 percent of 1950 imports of Cheddar, is hardship for Canadian producers and exporters, but that the Canadian Government’s principal purpose in making this protest is the broad one of drawing attention to the violation of GATT involved and to its serious implications for the future of the liberal commercial policy in the development of which the US and Canada have so actively cooperated. The legislation on which these restrictions are based is, he said, the first US legislation that has been contrary to GATT.

Mr. Linder and Mr. Leddy assured him that we were fully aware of the objections to this legislation, that we had received protests from a number of countries, that we were keenly embarrassed by it, and that we were at least as eager to get rid of it as the Canadians. Its enactment had come so suddenly that the Department had had no real opportunity to head it off. We were devoting much time and thought to ways of repealing it. Among other things we had discussed the question with certain agricultural groups, for instance the Federation of Farm Bureaus, and the prospect of their cooperation seemed good. However, the Canadians were told repeal is not likely at this session of Congress. No agricultural legislation is expected to come up the remainder of this year on which repeal could be pushed as an independent action. Some congressmen who had been steady supporters of the trade-agreements program voted for the amendment apparently without realizing its commercial-policy implications. A thoroughgoing educational campaign is needed before repeal can be expected.

The Canadian Government would like to publish the note. We saw no objection to this. Mr. Matthews agreed to inform us when it is to be published.

At this time, Mr. Matthews said, his government is merely protesting but there is a strong body of opinion in Canada which favors possible further action, for instance, withdrawal of concessions enjoyed by the United States.

[Attachment]

The Canadian Charge (Matthews) to the Secretary of State

No. 496

The Canadian Charge d’Affaires, a.i., presents his compliments to the Secretary of State and has the honour to advise him that the recent announcement of the United States Department of Agriculture with regard to the control of imports into the United States of fats, oils, and other dairy products has created a situation which is of urgent concern to the Canadian Government. The restriction of the imports of dried milk products, and cheese in particular, will cause immediate damage to Canadian trade with the United States.

In the case of cheese, the new import quota will reduce United States imports substantially below the levels which have prevailed in the immediate past. This reduction cannot fail to have a serious prejudicial effect upon the position of the Canadian dairy industry.

While the impact of the new restrictions upon particular producers is of immediate concern, the Canadian Government wishes also to call the particular attention of the Government of the United States to the more far-reaching implications of this action. The new restrictions announced by the United States Department of Agriculture are contrary to the obligations which the two governments have assumed toward one another in the General Agreement on Tariffs and Trade. The latter provides clearly that quantitative import restrictions of this kind shall not be imposed except in certain stated circumstances which cannot be held to exist at present in respect to these commodities. These new import controls, furthermore, will nullify the value of certain of the tariff concessions which were negotiated at Geneva in 1947 and at Torquay, these concessions having been bound by the United States until January 1, 1954.

The Government of Canada has sought at all times to observe the terms of the General Agreement on Tariffs and Trade which govern the commercial relations between our two countries. The Canadian Government earnestly hopes the Government of the United States will review the action it has recently taken to restrict the imports of dairy products, in the light of the provisions of the General Agreement on Tariffs and Trade, in order that the mutually advantageous trade which is of such great importance to the general well-being of both our countries may not be impaired.

Washington , August 27, 1951.

1. The memorandum was initialed by Harold Linder, Deputy Assistant Secretary of State for Economic Affairs.
2. John M. Leddy of the Office of Economic Defense and Trade Policy. Leddy was to become EDT Director in November 1951.