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DCER : Volume #15 - 41.DEA/9561-40 : MOST-FAVOURED-NATION TREATMENT FOR AUSTRIA

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Volume #15 - 41.

CHAPTER I

CONDUCT OF EXTERNAL RELATIONS

PART 1

AMENDMENT OF CONSTITUTION OF CANADA

SECTION F

MOST-FAVOURED-NATION TREATMENT FOR AUSTRIA

41.

DEA/9561-40

Memorandum from Secretary of State for External Affairs
to Cabinet

SECRET

[Ottawa], August 22nd, 1949

MOST-FAVOURED-NATION TREATMENT FOR AUSTRIA

1. Austria has asked Canada to exchange reciprocal most-favoured-nation tariff treatment with Austria.

2. The Austrians participated in the Havana Conference which drew up the proposed Charter for an International Trade Organization. They have signed, and plan to ratify, the Final Act of that Conference. However, because of their unsettled national status, they have not participated in the General Agreement on Tariffs and Trade.

3. At present Austria has a single-schedule tariff. The exchange of mostfavoured-nation treatment would not give Canada any immediate tariff advantage in Austria. If, however, a second schedule were added to the Austrian tariff at a later date, Canada would be guaranteed the lower rates. Austria is expected to introduce a revised tariff early in 1950, but it is not known whether it will contain more than one schedule.

4. There appear to be no political objections to the Austrian proposal, On the other hand, there are two political reasons for agreeing to it:

          a) We have taken the view that Canada was never at war with Austria. We have, however, granted most-favoured-nation treatment to Western Germany, with which, technically, we are still at war,

          b) The Austrian Government and people are putting up, at considerable risk to themselves, strong resistance to Soviet and Communist efforts to dominate Austria Any gesture that can be made as an expression of sympathy for the Austrian Government is desirable.

5. The United States accords most-favoured-nation treatment to Austria by virtue of a 1928 Treaty of Friendship, Commerce and Consular Rights,

6. The Inter-departmental Committee on External Trade Policy has recommended that most-favoured-nation treatment be exchanged with Austria. I concur in that recommendation.15

L.B.PEARSON


15 Le Cabinet approuva cette recommandation le 29 août 1949. Cabinet approved this recommendation on August 24, 1949.



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