394.31/3–1751: Telegram

The Acting Chairman of the United States Delegation to the Torquay Conference ( Corse ) to the Secretary of State

secret
niact

552. USTAC.

1. TAC decided recommend Pres package [for Canada]1 outlined memo below. 6 voted for, 2 reserved, 1 absent.2 4 favorable votes [Page 1276] were cast without authorization by members whose agencies now oppose certain items in the package but who personally recommend each agency consider withdrawal such opposition in view acceptance all agencies of total package and advantages of package as a whole.3 Items in question are: cheese (Agric); plywood (Commerce); aluminum (Defense and Interior); canned salmon (Interior). ECA. Treas reserved basis aluminum.4 Labor absent London but being informed, may cable direct. Members further recommend highest level inter-agency consultation to agree package as whole. Suggested memo Pres follows for use after agencies’ deliberation.

2. Begin memo.

Interdepartmental committee TAC herewith requests additional authority for offers by US to Canada shown annex A (see ourtel 553)5Some of these offers non-controversial but fol 5 heretofore not recommended because of difficulty which grant or concession wld cause to one or more US govt agencies because of programs or interests for which they have responsibility are now recommended for approval as a group: Douglas fir plywood 20 percent, canned salmon 15 percent (both requests for deeper reductions items on which smaller concessions already offered), birch plywood 15 percent, crude aluminum 1½ cents pounds, cheddar cheese 3 cents lb 15 percent min (no concessions previously authorized last 3). (Insert here reference final status any dissents.)

3. Background against which these concessions recommended, including status entire conference and procedure proposed for use requested authority essential to appraisal merit of requests. After extended negots, Canada came to conclusion only alternatives no agreement or limited facesaving one containing no controversial items either side. This stand based our failure try meet their request items here recommended and others including potatoes, ground fish fillets, soybean oil, linseed oilcake and meal, paper. Further stated they unable conclude an agreement with some but not all controversial items [Page 1277] both sides because their need substantial concessions of value all areas Canada.

4. Chairman USDel made appeal head Canadian Del for joint exploration situation. Item by item discussions showed US offers to date plus items for which authority here requested provide reasonable balance in substantial agreement which wld include on Canadian side all offers to rate, release on all preferences Canada accords or enjoys in which we interested and additional offers items named para 6 below.

5. On report foregoing, TAC decided urge Canada all out effort resolve crisis by broadening basis both sides, feeling essence of strategy must be maintain positive effort balance upward instead of downward.

6. Canadian Del agreed make all out effort and now offers fol new concessions (see TAC D–77 annex 5 for other offers)6 assuming entire package consisting our existing offers plus items here recommended obtained from US. Reductions margins of preference as far as beneficiary Commonwealth countries will agree (Canada actively supporting US) on hog casings, raisins, currants, canned peaches; reduction MFN frozen vegetables from 20 to 17½ percent; grapefruit juice from 15 to 10 percent; refrigerators 22½ percent to 20 percent; street or road rollers 25 to 20 percent; rubber hose (entire items) 22½ percent to 20 percent; rubber tires from 25 to 22½ percent; apples ½ cent Aug 1–May 19, free May 20–July 31. Finally support our efforts secure reductions margins preference other Commonwealth countries list items primary interest US. Latter include preferences Canada now enjoys UK on cheddar cheese and canned salmon.

Resulting overall trade coverage by Canada wld be 284 million dols or 14.5 percent Canadian imports from US 1949; by US 131 million dols or 8.5 percent US imports from Canada 1949. Wide range products both sides.

7. TAC therefore recommends as indicated above and wld conclude agreement using full authority if Canada delivers entire package. Recognize uncertainty Canada able persuade other countries meet US on preference questions and wld use full authority only if Canada delivers substantially entire package.

8. TAC took this stand partly recognition intrinsic importance Canadian negots including concessions on preferences we hope obtain from Canada, partly in hope forestall imminent collapse third-country negots in Torquay, partly to secure invaluable Canadian help in difficult negots other Commonwealth countries re preferences now at crucial stage. Reduction Canadian preference in favor Australia on raisins, canned peaches, reduction UK preferences cheese, salmon and others wld be highly significant break preference system.

[Page 1278]

End memo.

9. Regret necessity emphasize vital importance speed but clearance in time to be useful in preference negots other Commonwealth countries essential. Hope for reply by Mar 21.

Sent niact Dept 552; rptd info London 223 for info Goldwasser.

Corse
  1. The United States-Canadian negotiation started on October 6, 1950. The United States Delegation was so dissatisfied with the initial Canadian offers that it promptly broke off negotiations pending improvement thereof. The Canadians expressed willingness to make wide improvements and formal negotiations were resumed on November 17. Complicated negotiating extending into 1951 centered around Douglas fir plywood, birch plywood, cattle, Cheddar cheese, potatoes, apples, groundfish fillets, canned salmon, book paper, paper board, and aluminum.
  2. Betti C. Goldwasser, Department of Labor representative at Torquay, was
  3. This was done by other TAC members in a series of telegrams to Washington, March 17–21 (394.31 file).
  4. The United States Delegation on March 12 rejected Canadian requests on birch plywood, Cheddar cheese, and potatoes. The Delegation earlier had rejected Canadian requests on the same items and additionally on groundfish fillets and apples. On March 14, after the United States rejection of March 12, the Canadian Delegation recommended either breaking off the negotiations or improvising strictly limited schedules of noncontroversial items. Shortly after that, the Canadians accepted a United States proposal for the rapid conclusion of an agreement in which the United States would grant its previously definitively offered concessions plus concessions on aluminum, Douglas fir plywood, birch plywood, Cheddar cheese, and canned salmon. On its part Canada would maintain its offers already made and add some important additional concessions including, if other Commonwealth countries made it possible, reduction of Commonwealth preference on raisins, dried currants, canned peaches, and hog casings in the Canadian tariff, and Cheddar cheese and canned salmon in the United Kingdom tariff.
  5. Not printed.
  6. Not printed.