The Eleventh Session of the Contracting Parties to the General Agreement on Tariffs and Trade begins in Geneva on October 10th. This will be one of the regular business sessions which take place periodically to administer the Agreement, to consider complaints and to seek solutions of particular points of difficulty. A number of important matters will be discussed and it has been suggested that governments may wish to send Ministerial representatives to attend the Session for a few days.

It is desirable that a Canadian Delegation should be appointed to participate in the work of this Session, to represent Canadian interests and to seek, as in the past, to strengthen the GATT arrangements and make them as effective as possible.

(a) Attendance of Ministerial representatives at this Session - It has been suggested that a meeting of Ministerial representatives at this Session would serve to strengthen the prestige and effectiveness of the GATT. This matter was discussed by the GATT Intercessional Committee, meeting in Geneva last month. There appeared to be considerable interest in this proposal, particularly among some of the underdeveloped countries and the European countries. It was felt that such a meeting would provide a valuable opportunity for direct contacts between Ministers from various parts of the world, and, also, that some of the items on the Agenda were of sufficient importance to warrant the presence of Ministerial representatives at this Session. In view of this response, it would seem desirable that Canada should support this proposal. If a sufficient number of governments are in favour which is by no means certain, it has tentatively been agreed by the GATT countries that arrangements will be made for a meeting of Ministerial representatives to take place in Geneva November 12-16.

It would be desirable for Canada to undertake to send a Ministerial representative to the GATT Session, but only if a sufficient number of Ministerial representatives from other governments will also attend. The Minister of Trade and Commerce has asked his Parliamentary Assistant whether he could attend if such a meeting takes place.

(b) Balance of Payments Consultations-On the initiative of the United States and Canada, the Agenda for the GATT Session calls for the institution of a series of consultations with a number of countries which are still maintaining discriminatory import restrictions. It is felt that with the considerable improvement in the balance of payments position of a number of European countries in recent years the time has now come for an effective series of consultations aimed at obtaining some relaxation of these restrictions. Among the countries which would be invited to consult, Germany and The Netherlands particularly would appear to be in a position to make substantial progress in the removal of restrictions. It is clearly in the Canadian interest and in the interest of strengthening the GATT arrangements that some effective action should be initiated for progress in the field of import restrictions. This is particularly the case at a time when no further progress in the tariff field can be expected, as far as the United States is concerned. It is also of importance to obtain further action in the removal of dollar discrimination in Europe at a time when European countries are discussing regional trade arrangements.

The Canadian Delegation should take an active part in arranging for balance of payments consultations under GATT, in ensuring that these consultations are made as effective as possible and that the GATT Secretariat is adequately equipped to administer them.

(c) European Customs Union and Free Trade Area-The proposals for a European common market for the association of the U.K. and other European countries in a free trade area raise issues of major importance in the field of international economic policy. It would appear desirable at an early stage to try to ensure that these proposals are kept as consistent as possible with the multilateral objectives of the GATT. Canada and the United States have therefore proposed that at this Session of the GATT there should be a discussion of methods of establishing continuing liaison between the GATT and the European regional plans.

The Canadian Delegation should support appropriate arrangements to provide for effective liaison between the European regional discussions and the GATT.

(d) Accession of Switzerland to the GATT-Switzerland has now made a formal application for accession to the GATT and this will be considered at the coming Session. Switzerland's accession as a full member of GATT at this time raises problems because of the existence of Swiss agricultural import restrictions which are in conflict with the provisions of the GATT. Because of this it has been proposed that Switzerland should be accepted only as an associate member of the GATT at least for the time being. It has to be recognized that this would be another instance of the exclusion of trade in agricultural products from the GATT rules. In other products, however, Switzerland is a strongly liberal trading country, and on balance Swiss accession would therefore be valuable to the GATT.

In these circumstances the Canadian Delegation should welcome and support the accession of Switzerland as an associate member of GATT, on terms which will not create undesirable precedents.

(e) Brazilian Tariff Revision-Brazil will be submitting at the coming session a new draft tariff for consideration by the GATT countries. The Brazilian draft tariff provides for substantially higher levels of duties for most imports into Brazil.

The Canadian Delegation should not adopt an unduly negative attitude towards the Brazilian problem but should participate in devising a formula which would enable Brazil to implement tariff increases while protecting Canada's trade interests as much as possible. At the same time, the Canadian Delegation should try to ensure that no action is taken with respect to Brazil which would cause substantial injury to the GATT.

I recommend that the Delegation be instructed:

(a) to participate in the discussion of Agenda items, to represent Canadian interests and to seek, as in past, to strengthen the GATT arrangements and render them as effective as possible;

(b) to indicate that Canada will be prepared to send a Ministerial representative to attend the Session, on the understanding that a sufficient number of representatives of Ministerial rank from other governments will also attend;

(c) to make appropriate arrangements for balance of payments consultations under GATT with a view to obtaining some further progress in the removal and relaxation of discriminatory import restrictions;

(d) to make arrangements for continuing liaison between the GATT and the European regional discussions for a customs union and free trade area;

(e) to support the accession of Switzerland as an associate member of the GATT on suitable terms;

(f) to participate in the discussion of the Brazilian tariff problem, seeking a solution which will do as little damage as possible to the GATT and to Canadian trade with Brazil, on the understanding that further instructions will be sought from Ottawa, if necessary.

I recommend that, as on past occasions, the Chairman of the Canadian Delegation should be Mr. L.D. Wilgress (who will no doubt be re-elected Chairman of the Contracting Parties); that Dr. C.M. Isbister of the Department of Trade and Commerce and Mr. A.B. Hockin of the Department of Finance should be Vice Chairmen of the delegation; that the following officials from Ottawa should be included in the delegation:

and that Mr. C.F. Wilson, Commercial Counsellor at Copenhagen, should assist the delegation as may be necessary, and that Mr. G. Clark and Mr. H. Jay of the Canadian Permanent Mission to the United Nations, Geneva, should be attached to the delegation.⁵

L.B. PEARSON