411.42/7–1653: Despatch
No. 973
The Counselor of Embassy in Canada
(Bliss)
to the Department of State
No. 61
- Subject: Wilgress on Economic Policy
Today I accompanied Ambassador Stuart1 when he called on Dana Wilgress, Under Secretary of State for External Affairs, who is at present in charge of Canada’s foreign relations in the absence of Mr. Pearson. What seem to me important points were developed in the conversation between Ambassador Stuart and Mr. Wilgress.
In response to the Ambassador’s leading question regarding points of difference in Canadian-American relationships Wilgress stated in a forthright manner that they appear to lie in the economic field. He observed that at times in the past our defense relationships have caused concern, but at present he regards them as presenting no difficulties. In the field of economic affairs, however, Canada is increasingly concerned over what seems to be the restrictionist policy developing in the United States.
Further questioning brought out his view that American restrictions on dairy products are of no great importance and he dismissed [Page 2096] the recent Canadian protest as one based on principle. The prospective restrictions on oats, however, he felt would really hurt Canada. He also expressed concern over the possibility of adverse action by the United States against imports of frozen fish fillets from Newfoundland, remarking that the dollar amount involved might be considerably less than the $30 million represented by Canada’s oat trade but that it would be of particular importance to the depressed population of Newfoundland and therefore a matter of political concern.
He would not say what action Canada might take in the event of restrictive action on oats and fish fillets, and it is obvious that the Government has fixed on no policy for application in that event. In his view retaliation would be unproductive, damaging to both countries, and in every way undesirable, but he admitted that political pressures in Canada might make it necessary for the Government to introduce retaliatory measures simply to show the country that “Canada will not take it lying down”.
Wilgress further observed that if the United States were to introduce restrictions on oats and on fish fillets an almost inevitable result would be the emergence in Canada of a strong demand for closer trade relationships within the Commonwealth. He recalled the course of events 20 years ago when the Hawley–Smoot Tariff of 1930 led inevitably to the 1932 Commonwealth Conference in Ottawa, to the establishment of Imperial Preference and to a new set of trade relationships designed to exclude the United States. Even the passage of our reciprocal trade agreements legislation in 1934 was not enough to reverse this trend and the consequences are still with us.
In view of Wilgress’ vast experience with international relationships in the economic field his words of warning in this connection must be taken seriously.
- R. Douglas Stuart presented his credentials as Ambassador on July 15, succeeding Stanley Woodward who left the post on Jan. 14, 1953.↩