In January of this year, the Greek Government formally proposed a trade agreement between our two countries which would include specified tariff concessions by Canada on currants, raisins and tobacco imported from Greece. In reply, we advised the Greek Government that we were unable to grant specific tariff concessions on currants, raisins and tobacco since the preferential margins on these products are bound by our existing trade agreements with Australia, New Zealand and South Africa. We also stated that we would wish to defer any specific tariff negotiations until the conclusion of the Geneva Conference on Trade and Employment.

At the same time, we proposed, with the concurrence of the Departments of Finance, Trade and Commerce and National Revenue, that a commercial modus vivendi exchanging most-favoured-nation tariff treatment might best meet the mutual desires of Canada and Greece. In making this proposal, we pointed out that, if the Geneva negotiations should result in a narrowing of the margin of preference to Commonwealth countries on raisins, currants and tobacco, Greece would he entitled to the concessions at least on a temporary basis by virtue of the proposed modus vivendi.

The Greek Government has now accepted our proposal for a modus vivendi and instructed their Ambassador here to conclude the formal exchange of notes.⁴

We recently referred the matter to our Delegation at Geneva, and they agreed that, since we are now committed to the Greek Government, we should proceed to conclude a modus vivendi providing for a reciprocal exchange of most-favoured nation treatment for a period of one year with a provision for its continuation in force thereafter subject to three or six months' notice by either Government.

It is proposed that the text of the modus vivendi should follow our usual form, simply exchanging most-favoured-nation tariff treatment excluding, of course, Empire preferences.

I should appreciate your direction as to whether or not we should now proceed to conclude the exchange of notes.

L.B. P[EARSON]

⁴L'échange de notes eut lieu le 24 et le 28 juillet et prit effet un mois plus tard.
The exchange of notes took place on July 24 and July 28, effective one month later.