I attach two memoranda on the separate conversations which the Prime Minister had in Mexico City, on April 22, with President Lopez Mateos and with the Minister of External Relations, Sr. Manuel Tello. These reports were prepared by Mr. Irwin and Mr. Beaulne and were approved by the Prime Minister.

N.A. R[obertson]

[PIÈCE JOINTE 1/ENCLOSURE 1]

Note
Memorandum

CONFIDENTIAL

CONVERSATION BETWEEN THE PRIME MINISTER AND THE MEXICAN FOREIGN MINISTER, IN MEXICO, ON APRIL 22, 1960

The Prime Minister, accompanied by Mr. Irwin and members of the official party, paid a courtesy call on the Foreign Minister, Sr. Manuel Tello, at the Ministry of External Relations. The conversation lasted half an hour and touched on two main subjects, the Law of the Sea and the Organization of American States.

Sr. Tello raised the question of the difference of approach between Canada and Mexico to the conclusion of an international agreement on territorial waters. Although the Mexican Government was in favour of a twelve-mile fishing zone and the phasing-out period suggested in the joint proposal submitted by Canada and the United States, it could not see its way clear to reducing the nine-mile limit for territorial waters which had been established by treaty with the United States and recognized by a number of countries. Under domestic and international law, Mexico found itself in a special position and could not envisage the possibility of supporting the Canadian-United States proposal.

The Prime Minister pointed out that if agreement was not reached at the current session in Geneva, there would be little hope of arriving at a general solution for generations to come. Canada had given up many aspects of her original plan in the hope of facilÉtating such a solution. Through mutual concessions, Canada and the United States had evolved a compromise arrangement which appeared to be acceptable to a majority of the nations involved. He expressed the hope that Mexico could perhaps join with her North American neighbours in this common cause.

Sr. Tello insisted that the need for preserving her historical rights prevented Mexico from making any concession on the nine-mile limit for territorial waters. This was, he said, the gist of his reply to a letter he had recently received from Mr. Herter. However, the Mexican Government was exploring the possibility of some alternative plan, and would submit an amendment to the effect that a state would have the right to extend the width of its territorial waters beyond six miles and up to twelve miles.

Sr. Tello went on to say that the application of Canada for admission to the Latin-American Institute of Geography and History had been warmly received. The seat of this institute is in Mexico City and the Mexicans would be happy to cooperate more closely in this field with Canadian specialists.

The Prime Minister referred to the forthcoming Inter-American Conference and to the new provision adopted by the Planning Commission which would allow American states not members of the O.A.S. to participate with the status of observers. He noted that this provision obviously applied to Canada. Sr. Tello remarked that if Canada were represented by an observer, this would be considered as a most welcome development by Mexico and by all other member states. To a further question of the Prime Minister on what responsibilities were involved in this observer status, Sr. Tello replied that the Planning Commission had not gone so far as to attempt a definition.

The Prime Minister then asked what would be the advantages to O.A.S. of Canada’s membership. Sr. Tello observed that as a member of the American Community, Canada could not dissociate itself from its neighbours; in the economic field the O.A.S. would benefit from Canada’s wisdom, experience and high degree of achievement; politically, Canada would provide a new element of stabilization. The Prime Minister recalled that Canada had eleven diplomatic posts in Latin America, which represented more than one-fifth of its foreign missions, and that this fact alone was evidence of the interest of Canada in this part of the world. The Secretary of State for External Affairs would leave in a few weeks for a visit to a number of South American capÉtats. Mr. Green had often spoken in favour of Canada’s participation in the O.A.S. when he was in opposition and had indicated in March that the question was under consideration. The question was now under more active consideration in Ottawa than it ever had been.

The Prime Minister then asked Sr. Tello for his view on the suggestion made recently by the Assistant Secretary of State for Inter-American Affairs, Mr. Rubottom, that an Inter-American Defence force should be set up with the participation of Latin American countries. Sr. Tello replied that Mexico was against the establishment of a common military organization, which would be unnecessary and uselessly expensive. He added that the Mexican defence expenditures at present were less than one per cent of the total budget.

The Prime Minister wondered whether Canada’s admission to the O.A.S. would not be a source of embarrassment to Mexico, in view of the joint defence arrangements between Canada and the United States. Sr. Tello replied that Mexico was represented on the Latin American Defence Board, and that Canada’s representation on that Board would not entail additional commitments. He repeated that Mexico was against regional defence pacts and the constitution of joint military forces.

The Prime Minister said that he had been impressed by the appearance and efficiency of the Armed Forces detachments who took part in the welcoming ceremony at the airport, and noted that the cordiality and warmth of the reception he had received were far beyond anything he could have expected. He expressed the hope that President Lopez Mateos could pay a second visit to Canada,⁴⁶this time to open the Calgary Stampede.

Yvon Beaulne

[PIÈCE JOINTE 2/ENCLOSURE 2]

Note
Memorandum

CONFIDENTIAL

[Ottawa], April 22, 1960

MEMORANDUM ON CONVERSATION BETWEEN PRIME MINISTER DIEFENBAKER AND PRESIDENT LOPEZ MATEOS AT THE NATIONAL PALACE, MEXICO, D.F., APRIL 22, 1960

The Prime Minister was received by the President in the latter’s private office adjacent to the Cabinet room in the National Palace, at 1:00 P.M., April 22, 1960. Those present were the Prime Minister, the President, Mr. Tello, the Minister of External Relations, Mr. Rafael de la Colina, Ambassador to Mexico in Canada and myself. During conversation which lasted 35 minutes the following subjects were raised.

Law of the Sea

The Prime Minister referred to his conversation with Mr. Tello on the Law of the Sea which had taken place earlier that morning, and asked if there had been any new developments since the previous talk. Mr. Tello replied that earlier that day the Mexican Ambassador in Washington had advised him that the U.S. State Department had asked if Mexico had any concrete proposals to make in amendment to the U.S.-Canadian formula. In response the Minister had that morning handed to Mr. Hill, the U.S. Ambassador in Mexico, a draft amendment, which reads as follows:

“Notwithstanding what has been stated in the previous paragraph a state will have the right to determine a greater width of its territorial sea provided that it does not exceed twelve sea miles and that its width is stipulated in an international treaty or convention in force to which it is a party.”

The President stressed that the Mexican claim to a nine-mile territorial sea was based on treaty rights going back to 1848 and that under the constitution provisions incorporated in such treaties became part of the constitution itself. Neither the Government nor the people of Mexico could violate provisions so incorporated in the constitution.

Mr. Tello then said that if the amendment were added to the Canadian-U.S. formula, Mexico would support it, but if the amendment were not accepted, Mexico would be in the position of having to do its utmost to defeat the U.S.-Canada proposal.

The Prime Minister said that he appreciated the reasons for Mexico’s position and par­ticularly the constitutional aspects of the matter. He did not, however, express any opinion as to what the Canadian attitude toward the proposed amendment would be.

Purchase of Steel Rails from DOSCO by the Mexican State Railways

The Prime Minister then referred to the negotiations which have been going on between the Mexican State Railways and DOSCO for the purchase of steel rails. He noted that the Canadian Government had authorized credit terms over a period of seven years. Canada was not in the position to match terms which might be extended by a country such as the United States. Nevertheless, he felt that having regard to all the conditions the terms being offered by Canada were reasonable. Successful consummation of this transaction, in his view, would do much more than anything else at the present time to strengthen the commercial relations between Canada and Mexico.

The President said that he agreed in principle to the establishment of a line of credit to be exercised for the purchase of rails over a period of years, the number of which he did not specify. Mr. Tello intervened with the explanation that in Mexican terminology, establishment of a line of credit for a purchase of a particular commodity over a period of years meant that the buyer could utilize the credit in accordance with his developing needs from time to time.

The President then added that in accepting an obligation of this kind, Mexico would have to be certain of its capacity to pay within a period stipulated by the contract, and a study was now in progress concerning this aspect of the matter.

When the Prime Minister asked if the President could give any indication of how long this study might take, the President replied that it should be concluded within a matter of days.

A figure of 12½ million dollars was mentioned but it was not clear whether this would apply to one year’s purchases or to the whole period of a possible contract.

The PEMEX Polymer Agreement

The President said he was very pleased to learn of the successful conclusion of the negotiations for an agreement between PEMEX, Mexican State Oil Monopoly, and the Polymer Company, whereby the latter would furnish technical direction for the construction and operation of a synthetic-rubber plant by the former.

The Prime Minister replied that he too was very pleased than an agreement had been reached.

The President said he understood that this transaction was the first considerable direct technical aid project which Canada had offered to a Latin American country. He said he would be glad to see an announcement made of the agreement and implied that this might be done during the Prime Minister’s visit.

In response the Prime Minister said that he would like to get in touch with Ottawa before an announcement was made, after which a simultaneous announcement might be made in the two Capitals. He remarked that the transaction had certain political implications in Canada which might require consideration.

At this, the President laughed and said that certain political overtones in Mexico were also involved.

The President then went on to say that the Mexican economy was developing very rapidly and that new opportunities for transactions of this kind were opening up from day to day. He hoped that similar arrangements would be possible in other fields.

The Prime Minister replied that he was very interested to learn that the President was thinking along these lines and that he would be happy to consider any specific proposals that might be put forward.

Regulation of Foreign Investment

The Prime Minister then noted that Canada and Mexico were confronted with a similar problem in respect to the financing of their respective economic development programmes. Like Mexico, Canada still did not generate sufficient internal savings to finance its devel­opment programme. This meant that foreign capital had to participate in such development and this in turn raised the question as to the terms which should govern such participation. He then noted that his Government had established regulations for the control of companies established to conduct exploration for oil. Such a company had to have a Canadian charter and Canadian share participation to the extent of at least 50%. Furthermore, shares in any such company would have to be offered for sale on Canadian stock exchanges. It was intended to extend similar provisions to companies operating in the mining field. The Prime Minister added that these regulations would not be fool-proof and that lawyers would no doubt strive to find loop-holes in them. Nevertheless, he felt they were a step in the right direction.

The President said he felt that Mexico had achieved considerable success in resolving the problem of control of large units operating in this or that economic field, but admitted that the problem of how to deal with outside investment in smaller units had not been resolved.

The Role of Latin America in the Field of International Law

The President then enquired as to what subjects the Prime Minister intended to deal with in his address to the Colegio de Abogados that afternoon.

The Prime Minister replied that among other subjects he intended to deal with the role of International Law in the current world situation. This lead to a discussion of the differences in the philosophic approach of the Latin American legal profession and that of the Common Law countries to the fundamental problem of adjusting legal concepts to the needs of a world in a state of unprecedented rapid transition. The Prime Minister felt that in many instances the Latin American lawyer had a wider and better understanding of the philosophic bases of varying legal systems than his counterpart trained in the Common Law.

On this note the conversation ended.

W.A. Irwin

⁴⁶Le président Lopez Mateos avait déjà visité Ottawa le 15 au 16 octobre 1959.
President Lopez Mateos had previously visited Ottawa on October 15-16, 1959.