86. Memorandum From the Executive Secretary of the Department of State (Tarnoff) to the President’s Assistant for National Security Affairs (Brzezinski)1
SUBJECT
- Current Status of US–Canadian Relations
In June Ambassador Kenneth Curtis cabled from Ottawa his concerns over the apparent downturn in US–Canadian relations.2 He noted that Canadians felt they had responded positively on global matters of vital US concern, but that there had been no positive effect on bilateral relations. Ambassador Curtis underscored Canada’s deep disappointment over the Senate’s failure to approve the fisheries and boundary treaties, and Canada’s concern over the lack of progress on other major bilateral issues.3
The possible sharp downturn in relations which appeared likely in June has not materialized, and over the past three months several positive developments have improved the general atmosphere of US–Canadian relations. The signing in a few weeks of a comprehensive tax treaty should continue that process.4
Still, Canada’s deep-seated disappointment over the fisheries treaty is likely to overhang the relationship. Even a resolution of the impasse, which will inevitably require some retreat by Canada, will leave Canadians with a sense of injury.
Fisheries and Boundary Treaties
On August 26 Secretary Muskie and Lloyd Cutler met with Senators Kennedy, Pell, Mitchell, Tsongas, and Cohen in an effort to soften the “Kennedy Amendments” which shift the balance of benefits so far toward US fishermen that Canada finds them unacceptable. At Mr. Cutler’s behest the Senators agreed to consult with fishing industry representatives on the acceptability of less extreme amendments to the fisheries treaty. When the views of the Senators and the fishing industry have been received, the Department will consider further the presentation of those views to Canada.5
In press and private comments Canadians have expressed concern that if the US fishing industry calls for extensive changes in the treaty, Canada will be placed in the position of either backing down or bearing the onus for the failure of the agreement. Canadians believe this would be unfair, and such a result would surely have repercussions on other aspects of our relations. Whatever the outcome, the involvement of Secretary Muskie and Mr. Cutler should make it clear to the Canadian Government that the US attaches top priority to achieving approval of the treaties.
Alaska Gas Pipeline
A serious bilateral problem6 was resolved in July, when the President and Congress provided Prime Minister Trudeau the assurances sought by Canada that the US intends to complete the Alaska gas pipeline project.7 These assurances enabled Canada to authorize the export of additional gas which will allow the early construction of the southern legs of the pipeline and will improve the prospects for the completion of the remainder of the project.
Air Quality
Progress was made on this politically volatile question through the signing in August by Secretary Muskie of a Memorandum of Intent committing both countries to develop a bilateral agreement on effective domestic control programs. The Memorandum established a mechanism to gather technical data necessary for a formal air pollution agreement. The importance of the Memorandum of Intent should not be overestimated, but it nonetheless makes clear that the US takes Canadian concerns seriously.
Tuna Embargo
Our year-long embargo on Canadian tuna exports to the US has been lifted. Last year Canada seized 19 US tuna boats which were fishing off Canada contrary to Canadian law. The US does not recognize the authority of coastal states over albacore tuna and other highly migratory species, and under the terms of US law an embargo on Canadian tuna and tuna products was imposed. In an agreement reached last month Canada agreed to permit US tuna fishermen to operate off British Columbia, in return for limited access by Canadians to US ports. The same agreement called for negotiations (which have since begun) on a treaty which would permit US tuna fishermen to operate off Canada on a permanent basis, and allow Canadians to land their catch of albacore tuna at specified US West Coast ports. The agreement was reached in time to avoid a renewed confrontation as the tuna moved again this year into Canadian waters.
Auto Pact
Canada has been increasingly concerned over its persistent deficit in automotive trade with the US. With 1979’s deficit coming to $2.5 billion, Canada requested consultations on the agreement early this year. Two rounds of consultations—one at the ministerial level—have been held in an effort to meet Canadian concerns.
Under the economic and political climate which prevails in the US today, it will be difficult to devise measures to reduce Canada’s deficit. We do not plan to initiate proposals to modify the Auto Pact, although Canada may do so. We are keenly interested in restoring strength to the North American auto industry and are prepared to examine any Canadian proposals. Our willingness to discuss these issues has demonstrated US sensitivity to Canada’s problems in this area.
R&D Waiver
In July the US and Canada agreed on an arrangement to waive certain of the research and development costs incurred by the US in the development of the F–18A aircraft.8 Canada is satisfied that the arrangement worked out takes account of the special defense relationship between the two countries. At the same time, the arrangement is defensible from the standpoint of criticism from other Allies.
Border Broadcasting
Canada denies a tax deduction for advertising placed by Canadians on US television and radio stations. In July the President agreed to USTR’s recommendation that in response the US should enact a similar law. This minimal retaliation in kind will not affect other aspects of US–Canadian relations, and should, at least for the time being, remove this issue from the agenda.
Implications for the Future
Despite these positive developments, continued delay over the fisheries treaty tends to confirm in Canadian minds that the US is not responsive to major Canadian concerns. Until that issue is removed from the bilateral agenda, we will encounter difficulties in our bilateral relations with Canada. Additionally, Canada is experiencing a surge of economic nationalism, heightened by the return of the Liberals to power this year. The House of Commons will debate this fall new legislation designed to lessen foreign ownership of the Canadian economy. The result will tend to underscore once more the inequalities in the US–Canadian relationship, a given factor which complicates the resolution of bilateral issues.9
- Source: Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 7, Canada: 10/79–1/81. Confidential.↩
- Reference is to telegram 3117 from Ottawa, June 10, in which Curtis wrote: “I sense that we are on the verge of a downturn in U.S.-Canadian relations, certainly in the atmosphere, probably in the substance, primarily as a result of growing Canadian frustration over the U.S. failure to act on maritime boundary and fisheries treaties.” (Ibid.)↩
- Telegram 3127 from Ottawa, June 10, reported that in the first comprehensive statement of foreign policy under the Trudeau government, MacGuigan “spoke of ‘inexplicable delays’ in presenting the bilateral fisheries/maritime boundary treaty to the U.S. Senate, called proposed amendments ‘wholly unacceptable,’ and warned that Canada would take ‘appropriate steps’ to protect its competitive position if U.S. fishermen continued ‘over-fishing.’” (National Archives, RG 59, Central Foreign Policy File, D800284–0572)↩
- On September 26, Miller and MacEachen signed a U.S.-Canada tax treaty. (Telegram 270163 to Ottawa, October 9; National Archives, RG 59, Central Foreign Policy File, D800483–0468)↩
- In telegram 276127 to Ottawa, October 16, Pickering informed Curtis that “We have been working with Senator Kennedy’s staff over the last few weeks to identify mutually-acceptable amendments to the fisheries treaty which we would have been willing to take to Canada. However, Senator Kennedy (and Senator Pell) have not been able to resolve the issue with their constituents.” (National Archives, RG 59, Central Foreign Policy File, D800494–0153)↩
- The relevant part of Carter’s notes from his June 23 conversation with Trudeau in Venice reads: “JC said US wants pipeline, intends to build Alaska leg—presumption is that line would be good for US & Can.—Cannot get Congressional action re commitment, but key members will reassure Canadians.” (Notes prepared by Carter, undated; Carter Library, Plains File, President’s Personal Foreign Affairs File, Box 4, Summit Meetings, 7/78–6/80)↩
- On July 2, Carter telephoned Trudeau to inform him that his administration was committed to completing the Alaska gas pipeline project and that the House and Senate had passed a concurrent resolution with an “overwhelming majority” expressing support for it. (Memorandum of conversation, July 2; Carter Library, National Security Affairs, Brzezinski Material, Subject File, Box 38, Memcons: President: 7/80) On July 17, Carter sent Trudeau a letter to confirm U.S. support for the pipeline. (Carter Library, National Security Affairs, President’s Correspondence with Foreign Leaders, Box 3, Canada: Prime Minister Pierre Elliot Trudeau, 4–12/80)↩
- In a July 11 letter to Towe, McGiffert informed him that the United States was prepared to reduce recoupment charges on the F–18A aircraft (also known as the CF–18 aircraft) to allow Canada to purchase a minimum of 137 aircraft. McGiffert noted that “We would agree to such a reduction in the event and to the extent that the Canadian Government is prepared, under a dollar-for-dollar matching arrangement appropriate to the special circumstances of this acquisition (such as a waiver of Canadian taxes), to provide an equal amount of funding additional to the defense budget for its CF–18 aircraft program.” (Telegram 189733 to Ottawa, July 19; National Archives, RG 59, Central Foreign Policy File, D800347–0297)↩
- In a September 9 memorandum to Brzezinski and Aaron, Blackwill summarized Tarnoff’s memorandum. Blackwill’s memorandum bears a stamp that reads: “ZB has seen,” next to which an unknown hand added: “9/13/80.” At the top of the memorandum, Brzezinski wrote “D.R.” Below that notation, another unknown hand added: “Copy was given to Sit Room for DR. 9/10/80.” (Carter Library, National Security Affairs, Brzezinski Material, Country File, Box 7, Canada: 10/79–1/81)↩
- Bremer signed the memorandum for Tarnoff.↩