The Department of Trade and Commerce has informed us that the Commercial Secretary in Buenos Aires has advised about a recent case of discrimination against Canadian goods in the allocation of foreign exchange for imports by Uruguay. In a circular dated November 6, 1952 an exchange quota of $80,000 was made available for importation of seeds into Uruguay from the United States. Canadian seeds apparently were not eligible for importation under this quota and a Canadian seed exporting firm sought the assistance of the Department of Trade and Commerce in obtaining the removal of this discrimination. Recently a similar case occurred when an exchange quota, notified on March 28, 1953, of $100,000 was established for imports of antibiotics from United States only.

2. I understand that the Honorary Commercial Agent for Canada in Uruguay, on investigating this case, was told by officials of the Exchange Control Commission that licenses for imports from the United States may be utilized for merchandise of United States origin and/or from Canada, except in cases where the Commission expressly stipulates otherwise. It would appear, therefore, that the Uruguayan authorities seem to feel free to discriminate as between the United States and Canada.

3. Article H of the Canada-Uruguay Trade Agreement provides for equal treatment in the allocation of dollar exchange. It reads "The Contracting Parties will grant each other in all matters pertaining to the allocation of exchange made available for commercial transactions or in the allocation of quotas, either in respect of exchange or in respect of quantitative control of imports, treatment not less favourable than is granted to any other country".

4. As the ability of Canadian firms to compete in the Uruguayan market is impaired by this discrimination, and moreover as it is not in accordance with our Trade Agreement with Uruguay, I should be grateful if you would bring this matter to the attention of the Uruguayan Government and let me know what reply you receive. In addressing your note to the Foreign Ministry, it should state our concern about this discriminatory treatment and express our hope that Uruguay will in future ensure equality of treatment for Canadian goods in the allocation of dollar exchange.

A.E. RITCHIE

for the Secretary of State
for External Affairs