1. Three or four Canadian officials plan to be in Washington on Monday and Tuesday, March 5 and 6, to discuss potato tariffs and we would be grateful if you would make arrangements for meetings with appropriate U.S. officials. These could begin Monday morning but the Canadians, who will probably arrive by air on Sunday evening, would like to run over the ground with Embassy officials first. We would be grateful if you would make hotel reservations; the names of our group will follow shortly.

2. Hopper and Couillard are already generally familiar with the course of events and thinking up here, but we think it would be useful if the following explanation of the visit could be handed to U.S. officials without delay so that they may give some consideration to the matter before the meetings. You yourselves will appreciate, of course, that this explanation is to be regarded as a strong opening position in what may well develop into quite difficult negotiations.

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For several years past Canadian potato producers have been requesting increased protection. Last year the Canadian Government decided to refer the question to the Tariff Board in order to obtain the most complete information available on production, consumption, marketing, imports and exports and also on the operation of the Canadian tariff. The Board's report was received last November and the Government has now had time to consider it and discuss it with representatives of the producers.

It seems clear that the pattern of trade in potatoes has substantially changed in recent years. Heavy imports from the United States have entailed serious injury to Canadian producers, and the tariff situation, with free entry for the great majority of imports into Canada but with a substantial U.S. tariff against Canadian exports, has become unfair and inequitable. The request of Canadian producers before the Tariff Board was that the Canadian tariff should be set at a rate of 37 1/2 cents per cwt. against all imports, even though at this level it would reciprocate the U.S. tariff applying only to shipments within the U.S. tariff quotas. The Canadian Government considers this request to be reasonable in all the circumstances.

It is recalled that, on a number of recent occasions, when the U.S. has felt impelled to take protective action in regard to certain agricultural products which had been the subject of negotiations with and tariff bindings to Canada, the Canadian Government has decided that it was not in the common interest to take compensatory action. Nevertheless, it is recognized that the present Canadian rates were negotiated between Canada and the United States as part of comprehensive trade negotiations and that they have been bound under GATT. Accordingly, Canadian officials would welcome an opportunity of discussing with U.S. officials how this matter may be handled in a mutually satisfactory manner. Ends.