17. Editorial Note
During a meeting between President Eisenhower and Canadian Prime Minister John G. Diefenbaker in Ottawa on July 8, 1958, there was some discussion relating to China. The relevant portions of the memorandum of conversation read as follows:
“The Prime Minister then raised the question of China. He said that, as we knew, Canada did not recognize Communist China and that he contemplated no change although the Government was under very considerable pressure in this matter. The President interjected that if Canada recognized China it would ‘wreck’ us, and he added it would probably also wreck the United Nations. He urged strongly that Canada maintain its policy of non-recognition and its support of the moratorium in the United Nations.
[Page 31]“The Prime Minister then went on to the question of exports to China and raised the matter of the Ford car order which had been blocked. The President indicated both familiarity and sympathy in this matter. He pointed out the difficulties which faced us, among which he mentioned the problem which would be created domestically in the United States if foreign subsidiaries of U.S. companies could trade with China whereas domestic companies with no foreign subsidiaries were barred from such trade. The Prime Minister indicated his understanding of this aspect of the problem which apparently he had not considered before. There ensued some further discussion of the matter with both the Secretary and Sidney Smith entering into discussion. At one point Mr. Smith suggested that a ‘cut-off date be applied to U.S. companies owned by U.S. corporations with respect to the matter of China trade. The apparent thought behind this was to prevent U.S. parent companies from benefiting in future from any relaxation of trade with Communist China via foreign subsidiaries through the formation of subsidiaries after some established date. There was a little desultory discussion on this point but it was not seriously considered.”
The discussion turned to other subjects but returned to China:
“The discussion then swung around again to the problem posed by the Ford case. The President indicated an understanding of Canadian concern and said that he was sure some modus vivendi could be worked out. He suggested that Secretary Dulles and Mr. Smith discuss this in more detail and report back with some proposal. He re-emphasized the importance of avoiding any solution which would have the effect of weakening our own policy with respect to Communist China. The Prime Minister expressed appreciation for the attitude expressed.” (PVC/MC–2; Department of State, FE Files: Lot 60 D 90, MC—Canadians)