A representative of the French Embassy has enquired of us informally whether we would be agreeable to holding a fourth round of trade talks in February or March, 1953. I understand that a similar enquiry also has been addressed to you.

The position of this Department remains as heretofore, that is, that if there are any useful questions which can be discussed we will be glad to hold these meetings. Moreover, we consider it useful to take as sympathetic an attitude as possible toward the French initiative in view of the persistent nature of the French balance of payments difficulties and the attendant internal and external pressures which tend to make a solution of France's difficulties peculiarly complex. I should be grateful if you would indicate whether you wish to recommend that we accept this French proposal and, if so, any dates for the meetings which would be suitable to you.

It has occurred to us that the French may seek to widen the scope of these talks from a purely trade point of view. They might raise, among other subjects, the question of establishing a dollar-franc board, further negotiations within the GATT, the possibility of off-shore procurement by Canada in France, and our reactions to the plan submitted by the French at the last session of the GATT for a general reduction of tariff levels. On these questions we are prepared, of course, to hear what the French have to say but there is little likelihood that useful results could come out of talks on these subjects and we would be unable to make any commitments. All these topics can be pursued through normal diplomatic contacts and within the forum of OEEC, GATT, or NATO. If a fourth round of trade talks with the French are held, I think it would be useful, in order to head off any undesirable subjects and to keep the talks within proper limits, to obtain an agreed agenda beforehand. I should be glad also to have your views on this aspect of the proposed talks.

R.M. MACDONNELL

for Under-Secretary of State
for External Affairs