The Ambassador in Canada (Woodward) to the Secretary of State
78. While definitive govt position not determined Canada probably will urge upon us desirability pressing in IMF case against Belg import restrictions. Commercial policy experts convinced Belg position unjustifiable and failure to obtain removal restrictions will discredit GATT and strengthen position of critics that other countries ignore GATT and nullify concessions to Canada whenever convenient, So-called practical trade experts also favor vigorous action owing importance Belg market.
Canadian GATT del now returned Ottawa believes case against Belg can be won in IMF. They convinced basic reason Belg restrictions dollar imports has been pressure from UK which desires thereby lessen competition. They believe UK cannot strongly support in IMF Belg contention its restrictions are exchange restrictions authorized by Art XIV. They point out UK and Australia have consistently maintained that their own restrictions, similar to those of Belg, are import restrictions, not exchange restrictions; and therefore under GATT, not IMF agreement.
Canadian delegation think vigorous stand by US and Canada probably will lead Belg to rescind restrictions without actually arguing case in IMF. They suggest strong notes by US and Canada in immediate future notifying our intention pushing issue in Fund and requesting reconsideration Belg position. We wld wait long enough for full consultation Belg and UK but make clear we are firm in determination raise issue in Fund without undue delay.
Emb informed that Wolfson, Canadian alternate at IMF, opposes pressing Belg case in Fund but commercial policy experts Ottawa convinced his personal views will not prevail. They intimate his views reflect at least in part discussions with US Treasury experts.
Info in this tel believed reliable. It was, however, obtained chiefly one high ranking expert. Owing preoccupation Canada with other matters and absences from Ottawa by some officials, Emb has not yet been able check other sources.
Sent Dept 78, rptd Brussels unnumbered.