Dear Sir:

Attention: Mr. R. Grey

In your letter of May 13, 1959,? you asked for our views on the suggestion that Canada should display more interest in the activities of the Economic Commission for Latin America by sending observers on a regular basis to the plenary sessions of ECLA and to those meetings of its subsidiary bodies which are of special interest to Canada. You explained that your suggestion was intended to meet the pressures on the Government to take a more active part in Latin American affairs. These pressures come primarily from Canadian exporters and from Latin American Governments.

The Canadian exporters in question are a small, but vocal group. They claim that they are losing their markets in Latin America and other under-developed countries because they cannot offer credit terms as favourable as those given by their competitors. Their efforts therefore have been directed towards obtaining from the Government medium and long-term credit facilities.

The Government will be introducing during the current session of Parliament amendments to the Export Credits Insurance Act which should go a long way towards meeting the demands of the exporters. The pressures from this group should therefore diminish. In any event, I doubt whether more active Canadian participation in ECLA could do much to satisfy the real demands of Canadian exporters. An initial favourable reaction might turn into a feeling of disappointment and frustration if, as seems likely to be the case, the course of action which you propose was not followed by concrete results in terms of higher sales. For these reasons, I do not believe that the pressures from Canadian exporters to which you refer in your letter should weigh very heavily in deciding whether to take a more active part in ECLA.

The network of diplomatic and commercial posts which we maintain in Latin America is surely adequate to deal with our political, commercial and other interests in that region and should provide ample evidence to the Latin Americans that, within the limits imposed upon us by our resources and our commitments in other parts of the world, we wish to maintain close and friendly relations with them. Recent dispatches from some of our Latin American posts, however, indicate that several Latin American Governments are not quite satisfied with the situation as it now stands and would like to have us more deeply involved in the affairs of the region. The question therefore seems to be whether we can maintain the status quo without losing too much of the goodwill which we have built up since the end of the war. In this connection, I would like to point out that in their desire for greater Canadian participation in the affairs of their region the Latin Americans are governed to an important extent by the hope that they can use us to offset the influence of the United States in their affairs and that we will act as a mediator between that country and themselves. We should be careful to avoid being manoeuvred into a position where we would lose the goodwill of both the United States and the Latin Americans.

I am not convinced that our relations with Latin America have reached a point where failure to display more interest in their affairs by way of participation in multilateral organizations would result in a substantial deterioration in our relations with them. On the contrary, I think that there is much to be said for keeping our relations with them on a bilateral basis. However, I would be prepared to defer a final judgment on this matter to your Department. If your judgment is that we must do something and if other Departments do not object, I would not want to stand in the way of, although I would have misgivings about, the course of action which you suggest.

If your suggestion is acted on, I would like to stress that the role of our representatives should be limited strictly to the one of observer and that we should be represented only at those meetings of the subsidiary bodies of ECLA which are of obvious and direct interest to Canada. Generally speaking, the more enmeshed we get in Latin American affairs, particularly on a multilateral basis, the more likely we are to create expectations which we cannot meet, such as, for instance, the expectation that we extend some economic assistance to the region. This would probably result in a worsening of relations.

Yours sincerely,
A.F.W. PLUMPTRE

⁶⁷⁹ Note marginale :/Marginal note:
This is a commercial not a financial question. [Auteur inconnu/author unknown]

⁶⁸⁰Note marginale :/Marginal note:
This is a political not a financial consideration. [Auteur inconnu/author unknown]