A delegation from the British West Indies is expected to arrive in Ottawa about January 20th and to remain here for a week or ten days. The members are as follows:

Lt. Colonel A.O. Spencer - (Chairman),
Economic Adviser, British Guiana.
Hon. Major Alan Storey, D.F.C. -
Member of the Legislative Council of Trinidad. G.G.R. Sharp, Jamaica,
and will be accompanied by:
Mr. Stephenson of the Associated West Indian Chamber of Commerce.

2. The purpose of the visit is ostensibly to secure a contract for flour for he coming year on the same terms as the United Kingdom. Unless there are objections on political grounds, the Department of Trade and Commerce is likely to decline such a request. II is recognized that the West Indies may in that event turn to Australia for supplies.

3. It is anticipated, however, that the delegation may wish to raise as well the possibility of a loan and/or the renewal, and possible enlargement of the Canada-West Indies Trade Agreement. officials of Trade and Commerce would not be favourably disposed to either course unless there are political reasons.

4. With respect to the Trade Agreement of 1925 which is still in force the following points may be noted:

(a) The Agreement extended certain preferences to the West Indies, notably for sugar and citrus fruits. Under the Geneva Agreements of 1947 the West Indies agreed to give up the preference on citrus fruits which were, in fact, of little real importance since we have imported little fruit from the West Indies. We agreed to continue preference on sugar which before the war resulted in a loss to the Canadian Treasury of about 5 to 6 million annually - i.e. we could have bought sugar at the same price elsewhere, e.g. Cuba, without granting preferences.

(b) The Canadian National Steamships agreed to provide scheduled passenger and freight service which until the war was carried at an annual deficit. During the war one ship was lost by enemy action and the service partly interrupted due to the necessities of war. The service has not been fully restored but it is understood that the service, when combined with the services provided with the Alcoa ships, is adequate for the freight offering. It is also understood that the C.N.S. would like to drop the passenger service. The West Indies would no doubt like to have it restored to the full.

(c) Under the Agreement, several West Indian colonies benefiting by the service provided an annual subsidy irrespective of the deficit incurred by the C.N.S. They have thus no inducement to restrict the carriage of freight to the C.N.S. and, in fact, a good deal of the sugar freight is carried by tramps. Several colonies have ceased payment of subsidies since the service has been curtailed.

(d) Notice of termination of the Agreement was given by Canada in 1939, but the war intervened and the Agreement has been allowed to continue, though the steamship service, as explained above, has continued on a reduced basis.

5. On a superficial examination there would not appear to be strong economic or financial reasons for continuing, and even less for enlarging, the West Indian Agreement. It does not appear that the West Indies can provide us with much more in the way of supplies than they are now doing. The Trade Agreement probably has helped to build up a market for Canadian exports, but for the present and the immediate future we are not likely to have a superfluity of goods for export. Nor would aid to the West Indies be likely to have much effect on our U.S. dollar policy.

6. Should the West Indian Delegation raise the question of continuing the Trade Agreement or extending its provisions, officials of Trade and Commerce are disposed to take the line that we have had no notice and that the matter would require extended study, especially in view of the Geneva Agreements, and possible developments at the Havana Conference. They would not be disposed to make any commitments. They would like our approval on this line of policy.

L.B. P[EARSON]