Foreign Relations of the United States, 1952–1954, Western Europe and Canada, Volume VI, Part 2

411.4231/7–3053

No. 974
Memorandum Prepared in the Bureau of Economic Affairs¹

confidential

[Washington,] July 28, 1953.

Proposal for Establishment of Joint US–Canada Economic Committee

During the Canadian Prime Minister’s meeting with the President in May the Canadians suggested that there might be merit in establishing a Joint Economic Board. It was agreed that each side would consider this idea and the President asked the Secretary of State to take the lead in our examination.

The Canadians have submitted suggested terms of reference² which provide for a United States–Canada Committee on Trade Questions at Cabinet level with about four representatives from each government. The Canadian representatives would be headed by the Secretary of State for External Affairs and include the Ministers of Trade and Commerce, Finance and Agriculture. The Canadians would expect the United States to designate the Secretaries of State, Treasury, Commerce and Agriculture. Other agencies could be brought in when appropriate. The Canadian Government wants this Committee primarily to establish closer contacts with our Cabinet Officers. They feel strongly the difficulty of reaching effectively and discussing with our top policy officers economic matters of vital importance to them. A Committee below Cabinet level would not meet their purpose. They stress that economic problems are an integral, and vitally important, part of our overall international relations. The Canadians have in mind an informal Committee, meeting about twice a year to exchange views on the operation of trade agreements and other trade matters, including appropriate measures to encourage the flow of trade.

Officials of the Department of State believe that we should agree to the Canadian suggestion to establish a Committee at Cabinet level, but think that the terms of reference should be broadened to cover other economic matters as well as trade, and that it would be best to specify once instead of twice a year as the normal frequency of meetings. Canada is in many ways our best friend and ally and our relations are becoming constantly closer and of greater importance to both countries. Trade between the two countries is enormous and increasing. No permanent secretariat is planned. The Committee would not make firm decisions but would make recommendations to governments.

The major benefit to be derived from such a Committee would be the better understanding by top officials of both countries of the problems and thinking of each other which would flow from a frank exchange of views.

The proposal for a United States–Canada Economic Committee has the approval of Secretary Dulles. It is believed that the creation of such a Committee will serve to mitigate to some degree the serious and growing concern among Canadians as to United States trade policies threatening their vital trade with the United States. The Prime Minister has recently written the President³ in a serious vein on this matter and the Canadians have delivered a new strong note⁴ on the subject. Hence, it is felt important that we be in a position to make a proposal of this type to the Canadians promptly. Before making a recommendation to the President, however, Secretary Dulles would welcome the suggestions of Treasury, Commerce, and Agriculture and the concurrence, if the proposal is approved by them, of his colleagues in those Departments.

1. This memorandum was transmitted by Assistant Secretary of State for Economic Affairs Waugh to Assistant Secretary of the Treasury Overby in a letter dated July 30. (411.4231/7–3053) In identical covering letters, Waugh sent the memorandum to Samuel W. Anderson, Assistant Secretary of Commerce for International Affairs, and Romeo E. Short, Director, Foreign Agricultural Service, Department of Agriculture. The Assistant Secretaries of these agencies met on July 3 in Waugh’s office and, with two suggested changes, concurred in the establishment of the joint committee as proposed in this memorandum. Merchant, in reporting this action to Dulles in a memorandum of Oct. 21, wrote that the Canadians agreed to the changes and helped the Embassy in Ottawa in the drafting of an exchange of notes. This draft was cleared in substance with the Canadian Cabinet and was ready for approval by the Secretaries of the Treasury, Agriculture, and Commerce. (411.4241/10–2153)
2. According to a letter from Willoughby to Raynor dated Sept. 14, the first Canadian proposal was handed to Merchant in early summer. (411.4231/9–1453)
3. This letter dated July 17, not found in Department of State files, was referred to by Stuart in telegram 12 from Ottawa, July 21, as evidence of an extraordinary Canadian concern and an unnecessary excessive pressure on the Administration. (742.00/7–2153)
4. Note No. 470, July 18, from Wrong to Dulles concerning the possible restriction of trade with Canada in oats and groundfish fillets; printed in Department of State Bulletin, Aug. 24, 1953, p. 244.