611.4231/910: Telegram

The Minister in Canada ( Robbins ) to the Secretary of State

110. Department’s strictly confidential instruction 547, November 19, 1934.16 I offer the following comments on the Canadian note.17

1.
In my opinion Herridge’s note is written with a view to public [Page 859] consumption in Canada for political purposes and the temptation will be to use it and the existence of any negotiations which may be begun as an affecting ammunition in the Parliament this winter and in election next spring or summer. I believe that if it is used in this way before the conclusion of an agreement the effect will be detrimental to our future economic relations with Canada. I suggest that the reply when drafted should be of such a nature as to induce the Conservative leaders to hesitate to make public the correspondence for political purposes before signature of an agreement.
2.
Short of a major political crisis not at present anticipated I believe it improbable that elections can be called before the end of next April. At that time postponement of elections until summer will depend upon the pressure which the opposition will have been able to exert upon the government. Presumably its inclination will be to postpone to late summer if possible.
3.
In the meantime we must seek to prevent this issue from becoming a football in Canadian politics.
4.
On the face of it and in spite of its vagueness the proposal appears to be generous. However, if the Canadian Government expects to follow the line indicated in Cahan’s18 speech in the Montreal Gazette of November 19th it would appear that agreement will become increasingly difficult as negotiations progress.
5.
I believe that before agreeing to negotiations the two countries should be in harmony upon a basic objective of the agreement, namely, the restoration of normal trade between the two countries and its increase without reference to, or commitment regarding, any Canadian desire to have Canadian exports to the United States exceed their normal relation to American exports to Canada. Herridge’s remarks implying the necessity of such excess for Canada’s future prosperity appear fallacious to me.
6.
I recommend that no commitment be made regarding a joint statement mentioning free trade in natural products as an objective.
7.
Before agreeing to enter into negotiations I recommend that you write Herridge a note requesting the following information:
8.
Will the Canadian Government contemplate including in the agreement assurances that the Canadian system of valuation for duty purposes which experience has shown to be arbitrary, discriminatory and in effect secretive shall not be used to defeat the purposes of tariff reduction?
9.
Does proposal (e) of his note involve reductions below the most favored nation rates which the United States would receive under proposal (b)?
10.
Will the Canadian Government include in the agreement rectification of present discriminatory treatment of shipments coining through non-British ports and present discriminatory excise treatment of American imports both free and dutiable?
11.
I suggest you also ask that the Canadian Government furnish a specific list of those tariff items and parts of tariff items in the Canadian tariff, (a) [on] which Canada is at present precluded from making tariff concessions to the United States and (b) on which Canada could not make concessions without making reductions to other nations including the British Commonwealth lower than the rate extended to the United States. It would also be desirable to know their estimate of the proportion by value of Canadian imports in categories (a) and (b) above, taking as a basis therefor the last Canadian fiscal year ending March 31, 1934.
12.
An analysis of the Canadian note is being mailed to you tomorrow and I suggest that you await its receipt before taking action. Our analysis of the effect of proposal (b) of the Canadian note on American exports is being prepared to be mailed early next week. In my view substantial knowledge of the effect of proposal (b) should be before the Department before negotiations are undertaken.
Robbins
  1. Not printed.
  2. Note No. 157, November 14, p. 849.
  3. C. H. Cahan, Canadian Secretary of State.