Reference: Your Tel 1622 May 23.?
Repeat T&C (Warren), Washington, Hague, Paris, NATO Paris, Bonn, Rome, Geneva, Brussels (Priority) (Information).
By Bag Oslo, Copenhagen, Stockholm from London.

CLC SUB-COMMITTEE ON EUROPEAN TRADE ARRANGEMENTS

1. In paragraph 2 of reference telegram you indicated that CLC Sub-Committee requested the considered views of Commonwealth governments on the Swedish proposal³³³ by June 15. Following are comments you may make in response to this request:

2. Information received since May meeting of Senior Commonwealth officials³³⁴ is not repeat not sufficient to enable us to refer matter to ministers for formulation of considered governmental views. We can however indicate basic considerations which will influence Canadian attitude. In appraising proposed arrangements we shall wish to take into account not repeat not only direct effects of such arrangements on Canadian trade with countries concerned but also implication of these arrangements in terms of a broader European settlement and in terms of trade relations and GATT generally. We would hope that generally low external tariffs of constituent countries will not repeat not be affected by FTA arrangements. We would of course be particularly concerned at any prospect of these new arrangements involving discriminatory use of import restrictions and would assume that UK itself would not repeat not be prepared to become a party to arrangements involving such discrimination. We have welcomed the indication by UK (as reported in a letter from UK Trade Commissioner in Ottawa dated June 5)? that they will seek to ensure exclusion of agriculture and fisheries from proposed arrangements. We could not repeat not be expected to acquiesce in restrictive agricultural arrangements as part of a new FTA and we will wish to ensure that our position in UK market is safeguarded.

3. In presenting above comments it would also be appropriate for you to refer to view we expressed at [May] London meeting that most effective way of resolving problems of intra-European economic relations would be for countries to concentrate their efforts on achieving reduction of tariffs and removal of restrictions and discrimination on a broad multilateral front through GATT and IMF. We would be concerned if creation of a FTA of the Seven were in any way to inhibit active policies designed to strengthen GATT and to influence Common Market in an outward-looking direction.

4. We understand that FTA negotiations may now be moving into a more definite stage and we hope that UK will be in a position to give Commonwealth countries a comprehensive report on the nature of proposed arrangements and on proposed objectives in relation to Common Market of the Six. In particular we shall be interested in knowing (a) what arrangements are being made on tariffs, QRs and on agriculture (b) what objectives will be pursued vis-à-vis Common Market and what is nature of longer term European settlement that is envisaged.

5. Our immediately following message? will provide you with factual and statistical data on possible direct effects of proposed FTA on Canadian trade for your guidance in the discussions.

³³³À l'initiative du gouvernement suédois, des pourparlers sur la formation d'une zone de libre-échange entre les membres du " groupe extérieur des sept " ont eu lieu à Saltsjöbaden, près de Stockholm du 1er au 14 juin.
On the initiative of the Swedish government, talks on the formation of a free trade area among the "Outer Seven" were held at Saltsjöbaden, near Stockholm, from June 1 to June 14.

³³⁴Voir/See MAE/DEA 8490-B-40.