A draft document summarizing developments in this connection was circulated at an earlier meeting of the Committee. Subsequently, the Sub-Committee has continued its review of the situation and is presently engaged upon consideration of preferences enjoyed in the U.K. market on specific commodities which might be seriously affected by a Western European Customs Union. This work results from an informal suggestion from U.K. officials that they would like to obtain information from Canada regarding the particular commodities for which Canada would be inteTested in retaining a preference in the United Kingdom in the event of the United Kingdom entering the proposed Customs Union.

Canada should not lend itself to any situation which would result in the United Kingdom at this stage suggesting that the necessity of consultation with Canada was a reason for delaying the European discussions on the Customs Union. There has been some indication that this situation might develop. The Sub-Committee believes that the U.K. government should be informed that the Canadian government looks generally with favour upon the broad purpose of achieving a Western European Customs Union and hopes that satisfactory progress in that direction can be achieved; and that, in this connection, we would not wish our preferential rights in the U.K. market generally to be regarded as an obstacle to the formation of a Union; while, in the event of modification or sacrifice of preferences we would naturally expect some compensatory adjustments, our position in negotiations would be sympathetic to the achievement of a Customs Union.

The Sub-Committee does not believe it would be desirable oT useful at this time to indicate to the United Kingdom a list of specific commodities on which we would be interested in retaining a U.K. preference in the event of a Customs Union.

Preparation of a definitive list at the present time when no information is available regarding the common tariff which may be worked out for the Union is difficult business and any decision taken now might prove wrong in the light of later developments. Any decision on the importance of retaining a preference for specific commodities must depend upon such matters as the general attractiveness to Canada of the Western European market in the event of a Union, the common tariff levels which would be established by the Union and the general policy pursued in regard to the relationship between that tariff and existing preferential arrangements.

While the Sub-Committee will proceed with study of these matters so that Canada will be in a position to offer comment without delay at a later stage, and while the Canadian High Commissioner in the United Kingdom should be informed that this work is going forward, no specific comments should as yet be made available to other countries.

The Sub-Committee recommends that Mr, Robertson be instructed along the foregoing lines²⁶

²⁶ Bien que le Comité du Cabinet ait endossé cette recommendation le 12 avril, le Cabinet n'a pas confirmé ce rapport à sa réunion du 20 avril. Pearson a informé Robertson que Although Cabinet Committee endorsed this recommendation on April 12, Cabinet did not confirm the report at its meeting on April 20.
Pearson informed Robertson that Certain ministerial views were put forward in the course of discussion supporting strongly the maintenance of both our free entry in the U.K. market and the retention of the preferential arrangements which favour us; it was suggested that it would be unwise at this time to indicate to the U.K. that we would be prepared to make any sacrifice of the existing preferential arrangements.