General

A Canadian Government Trade Commissioner has been serving in Egypt since 1930. An Egyptian Consul-General was appointed in Ottawa in 1950 and the Consulate-General was raised to the rank of Embassy in August 1954. Mr. H.M. El-Hakeem, who had been Consul-General, became Chargé d'Affaires. The first Egyptian Ambassador to Canada, Mr. El-Husseini El-Khatib, presented his credentials on May 3, 1955. Mr. Kirkwood, as first Canadian Ambassador to Egypt, presented his credentials to Colonel Nasser in Cairo on December 27, 1954. Concurrently with his appointment as Ambassador of Canada in Egypt Mr. Kirkwood is Minister to Lebanon but his main residence is in Cairo.

You will recall that during the political uncertainty consequent upon the abdication of King Farouk and the Anglo-Egyptian dispute over the Suez Canal base, the Canadian Trade Commissioner, Mr. J.M. Boyer, lost his life in riots which occurred in Cairo on January 26, 1952.²⁶ The riots were primarily anti-British but they also demonstrated the lack of control of the Nahas Pasha Government. Due compensation was paid to the Canadian Government by the Egyptian Government in December 1954, after more stable conditions had been brought about by the signing of the Anglo-Egyptian agreement on the Suez Canal Base (1953) [sic] and the assumption of power in Egypt by the Council for the Revolutionary Command under the then Premier General Naguib.

Canadian relations with Egypt have never been intimate, and have been complicated since the war by Canadian support in the United Nations of the establishment of the state of Israel. While Canada is, therefore, generally considered to be pro-Israeli, no particular rancour appears to have been directed against us. Apart from this factor, Canada is considered by the Egyptians to be a country with no special axe to grind in the Near East and with a past free of colonial stains.

The only other form in which the Egyptians might believe Canada was following a policy inimitable to them is in North Africa. You will recall that Canada, with all the other NATO countries, was informed by the Egyptians that NATO was supporting the repression of the Arabs in French North Africa. This was not, however, followed up, and is hardly likely to be raised during your visit.

Commercial Relations

Trade between Canada and Egypt is regulated by an Exchange of Notes of December 3, 1952, constituting an Agreement for the exchange of most-favoured-nation treatment.²⁷

Canada enjoys a substantial balance of trade with Egypt. Major exports to Egypt have included wheat and wheat flour, automobiles and accessories (including tires), asbestos, newsprint, pharmaceutical products, and aluminum in primary form. Main imports have been raw cotton, paddy rice, and onions and other vegetables. Figures for the years 1950-54, inclusive, and for the first six months of 1954 and 1955 are as follows:

It will be noted that in 1952 and 1953 Canada exported an abnormally large value of goods to Egypt. This was largely due to the sale of wheat. Egypt has been traditionally a purchaser of Australian type of wheat. However, in 1953 Canada sold 13 million bushels as the result of tenders. Egypt will be calling tenders for wheat in the near future, but Canada is not hopeful of selling in that market for the following reasons:

(1) Iron Curtain countries have offered to exchange wheat for cotton and rice;

(2) Egypt may obtain wheat from the United States through its disposal programme;

(3) Australia and France are quoting extremely low prices.

The unusually large value of imports to Canada during 1953 was almost completely due to a large purchase of Egyptian cotton. The price of Egyptian cotton more recently has been out of line with other sources of supply. However, during September 1955 the Egyptian Government revamped its exchange control system and removed the seven percent export tax on cotton. This may stimulate additional imports into Canada.

Export of Arms

A limited supply of aircraft engines, spares and other parts have been exported from Canada to Egypt. We recently sold to Egypt a number of Harvard training aircraft. A month ago, however, we requested Canadair to refrain from responding to Egyptian requests for quotations on Sabre jet aircraft, partly because of the serious clashes at the Gaza Strip and partly because the supply of a considerable number of swept-wing jets might well have upset the balance of arms strength in the area. Even the RAF bases in the Middle East were not equipped with swept-wing aircraft. France, however, has undertaken to supply Israel with some Mystère jet aircraft.

Canadian policies respecting the sale of arms to Middle Eastern countries may have to be reviewed when more is known about the United States and United Kingdom reactions to the Egyptian deal with Czechoslovakia.²⁸ Attached is an appendix? listing the main items sold by Canada to Egypt and Israel during the past two years.

Immigration

As a rule, largely because of a lack of facilities for the security screening of persons wishing to immigrate into Canada from Egypt (a reason not disclosed to applicants nor presumably to the Egyptian authorities), no encouragement is given to such immigration. Exceptions to this general rule are made in the case of persons for whom security screening is not required (for example, British subjects) and those for whom security screening is usually waived (for example, wives of residents in Canada). These regulations greatly restrict the number of possible immigrants from among Egyptians proper, although they are not for immigration purposes classed as Asians. Applicants are usually told that no facilities exist for their immigration into Canada.

Recently the United Nations Relief and Works Agency for Palestine Refugees (UNRWA), which has its headquarters in Beirut, informally approached our Legation there with a view to ascertaining confidentially whether Canada would be prepared to accept a limited number (about 500) of selected Arab refugees as immigrants. Canada has already contributed about $4 million for Palestine relief.²⁹ The refugees earmarked for Canada would be chosen on a highly selective basis. It is understood that the United States has decided to support the programme. UNRWA's proposal has been referred to the Department of Citizenship and Immigration for their consideration.