Dear Mr. Heasman:

I have for acknowledgment your letter of the 14th inst.,† regarding the establishment of a Canadian Trade Commissioner Office in Czechoslovakia.

Canadian statistics concerning our trade with Czechoslovakia up to the beginning of the last war are very misleading as regards our exports, because of transshipment in Hamburg and other European ports. Our main export, wheat, for instance, does not appear in our own statistics. This commodity would, however, be shown in the Czechoslovakian trade returns, and possibly some other figures on Czechoslovakia's imports from Canada were secured for the preparation of our Black Book on that country, for use by our Commercial Relations Division. There may possibly, occasionally, have been some exports of barley for malting purposes. Our exports were not very diversified and consisted almost entirely of raw materials, mainly wheat and non ferrous metals.

Czechoslovakia is an industrial country and is dependent on other countries for the raw materials required by its industries. I feel that at present, and for some considerable time, our exports to Czechoslovakia will he limited as in the past to raw and semi-manufactured goods (other than ferrous metals and forestry products) and certain foodstuffs such as canned goods of various kinds, besides wheat. Czechoslovakia, like France, is short of foreign exchange and it is only thanks to our loans that we can ship them anything just now. Our loan to Czechoslovakia is small and when it has been used up I am afraid that Czechoslovakia's purchases in Canada will be kept down to a minimum.

Personally, therefore, I am not optimistic in respect to the future of our exports to Czechoslovakia. We have formidable competitors in the countries which surround it. These competitors were, it is true, severely affected by the war, but they will soon be active in the export field. Their exporters have also a vast advantage over us due to their proximity to Czechoslovakia.

I would say that our trade interests with Czechoslovakia would be served quite satisfactorily by a Trade Commissioner located in Germany, as was the case up to 1938-39, and my recent contacts with Czechoslovakia do not alter this view. My experience in Prague, I may add, was that it is extremely difficult to get along in conversation, as a rule, in either English or French, and that a knowledge of German appears essential unless one can master the Czech language, which is rather complicated.

Yours faithfully,
[YVES LAMONTAGNE]