You may recall that, following the French ministerial visit to Ottawa last March, it was agreed to hold another round of trade talks this autumn. The way the matter stands at present is that, after consulting other interested Departments, we agreed to a French proposal. to hold a fourth round of talks in Ottawa, commencing on October 15. In view of the relatively short period of time before the meeting, I thought it might be useful to review briefly the nature and scope of the earlier meetings and to summarize the information we have available concerning the agenda for the meeting next month.

2. The French, as you may remember, have continually taken the initiative with respect to these meetings. Their original proposal early in 1950, which we resisted, was that a Franco-Canadian Continuing Committee should be set up along the lines of the Canada-United Kingdom Continuing Committee on Trade and Economic Affairs. The forthcoming round of talks is the fourth of a series which began in Paris early in 1950, following Franco-Canadian agreement to hold informal economic talks from time to time. French delegations to these meetings have been headed by the Director-General of Economic Affairs in the Ministry of Foreign Affairs and have included officials from other Government departments and from the French Embassy in Ottawa. The Canadian delegations to these meetings have been headed by a senior official from the Department of Trade and Commerce (the Canadian delegation to the last meeting was headed by Mr. Bull of Trade and Commerce) and have included senior officials from Finance, Department of Defence Production, External Affairs and the Tariff Board. In addition, at the last meeting Mr. Rasminsky from the Bank of Canada and Mr. Stein, the Under-Secretary of State, were present for some of the talks. By mutual agreement, the senior French representative acted as chairman during the first two meetings which were held in Paris, while the senior Canadian representative chaired the last round of talks which were held in Ottawa in May, 1951. I assume that all parties will be agreeable to a similar arrangement at the forthcoming meeting.

3. In general, previous talks covered a variety of subjects such as tariff adjustments, French sales in Canada, the release of French assets, etc., and, although from our point of view there have been no important substantive issues, we have felt it wise to respond sympathetically whenever possible to suggestions made by the French in these fields. In addition, we felt there was some merit in having joint meetings from time to time to discuss trends in trade and current difficulties, although we have always been apprehensive lest other countries suggest similar meetings with us.

4. With respect to the agenda of the forthcoming meeting, an extremely meagre supply of information has been received from French sources, but we have been somewhat hesitant to press the French lest we should appear unduly interested in the meetings. However, on the basis of information obtained during and since the French Premier's visit, it appears that the French will wish to discuss the following items:

(1) French trade balance with Canada, It was agreed during M. Mayer's visit that this question should be discussed at future trade talks. I think the French understand that this is essentially a problem for them to attack and that our willingness to discuss the question does not imply any commitment on our part to obtain a better bilateral balance of trade.

(2) Tariffs. At the last meeting in 1951 the French indicated that experts might usefully examine the Canadian tariff structure in order to see whether or not further specific reductions might be advantageous to France. In this connection, M. Cailleteau of the French Embassy recently asked Dr. Isbister of Trade and Commerce whether we would have a list of tariff requests to submit to the French corresponding to the list which they propose to submit to us. We have, of course, no intention to submit such a list and, although we are prepared to discuss any items in our tariff which the French may propose for consideration, it is difficult to see how such discussions could be but a preliminary examination prior to general negotiations in GATT.

(3) An exploration of the Canadian market.

(4) Investment. Canadian investment in the French Union and possible French investment in Canada.

(5) DND Housing in France.

(6) Off-shore procurement -- with Mutual Aid funds and for ordinary defence contracts.

(7) Visits of Canadian Tourists to France.

5. The question of a press release is also important. I suggest that as soon as possible after the arrival of the visitors, a decision should be taken as to the desirability of issuing a press release at the conclusion of the talks. An early decision on this score would permit careful consideration of the text of any communiqué. In this connection, it would be well to remind the French of our desire to avoid publicity which might encourage other countries in turn to ask for bilateral official trade discussions with us at regular intervals.

6. In the light of the above, I suggest that you might usefully discuss with Mr. Bull the following matters:

(a) Canadian representation.

(b) Chairmanship of the Committee.

(c) Scope of the meeting.

(d) Press Release.

(e) Possibility of a preliminary meeting of Canadian representatives to concert a "Canadian line".

With respect to (b), you may wish to suggest to Mr. Bull that in view of his Department's interest in the meeting he might be willing to act as chairman of the discussions.

J.H. WARREN