Table of Contents
- Chapter V - Western Europe
- 1. European Economic Community
- 2. France
- 3. Ireland
Section A - Visit of Mr. Jean Rey, European Economic Community Commission, to Ottawa, June 13-18, 1961
Memorandum from Secretary to Cabinet to Prime Minister
CONFIDENTIAL [Ottawa], June 15, 1961
Mr. Jean Rey of the European Economic Community
Mr. Rey of the European Economic Community came in to see me this morning by arrangement when he was unable to see you. He had seen Mr. Hees at lunch yesterday and was seeing him again late this morning and had met with officials yesterday afternoon at some length. He was disappointed not to see Mr. Fleming but quite understood that in the present circumstances this was virtually impossible.
The second message he wanted to convey was that the E.E.C. were not in any way pressing the United Kingdom to enter their Community and to undertake the necessary re-adjustments with the Commonwealth that would be necessary for that purpose. They are ready to welcome the entry of the United Kingdom as a great political event of the century, but they are not endeavouring to bring this about. (This of course preserves their bargaining power in negotiating the terms of entry and no doubt eases the problem of reaching a common view among the six countries who differ rather considerably on the degree to which they feel the United Kingdom should be in the Community.)
Mr. Rey went on to say that there were no negotiations with the United Kingdom now pending and he did not think there would be any negotiations undertaken soon. He felt that exploratory discussions would have to come first and that these should be conducted by officials and perhaps on a medium senior level rather than at the top. He thought these exploratory discussions would probably start in the fall if the United Kingdom were serious and might continue through the winter. He thought they might result in a report to governments or the Commission on which serious negotiations might then take place such as the Spaak report on which the negotiations of the Rome Treaty were based. He did not seem to envisage serious negotiations commencing until next winter or spring and he thought these would take a considerable period, perhaps a year, before the ultimate decisions were reached.
I emphasized to Mr. Rey that you as well as other Canadian Ministers were following this situation very closely as he well knew. I said that you were not only concerned about the specific trade problems but about the general political issues involved, both in respect of the United Kingdom and Europe, and in respect of the future of the Commonwealth. I recalled that he had emphasized the previous day in the discussions with officials the importance which the Europeans attributed to the Commonwealth in the western world at the present time. He reiterated such emphasis.
When I mentioned these matters to you this morning, you asked about his estimate of the willingness of the Community to make exceptions to the principles of the Rome Treaty in respect of the United Kingdom to make it possible for the United Kingdom to enter. I had not asked him this as I felt that he would not give me any meaningful answer because this is of course something which would have to be negotiated by the United Kingdom and the Commissioners would certainly not want to give away their position to us at this state. The implications of our discussion on the trade problems yesterday, however, were that they were prepared to undertake some negotiation on our access to the U.K. market and possibly the wider E.E.C. market as part of the adjustments required to make it feasible for the United Kingdom to enter. Opinions differ, of course, on the willingness of the six governments, particularly the French, to see any exceptions as well as on the extent and nature of the exceptions to which they might ultimately agree. We have been having discussions among officials last week and this week on this question and are preparing detailed papers for you and the other Ministers concerned on these trade implications and I would not want to try to anticipate here the conclusions we are reaching on this score.
Secretary of State for External Affairs to Ambassador in Belgium
TELEGRAM E-1245 Ottawa, June 20, 1961
Repeat for Information: Paris, NATO Paris, London, The Hague, Bonn, Tariff Del, Rome, Washington, T&C Ottawa.
By Bag Stockholm, Helsinki, Oslo, Copenhagen, Dublin, Lisbon, Vienna, Berne, Canberra, Wellington, New Delhi, Karachi, Lagos, Accra, Colombo, Kuala Lumpur.
Rey’s Visit to Canada
Jean Rey of the EEC Commission, accompanied by Hoven, his Deputy Chef de Cabinet, and de Groode of the Commission’s Secretariat, was in Canada June 13 to 18. In Ottawa Rey met ministers of Finance and Trade and Commerce, senior officials and representatives of the press. He also visited Montreal and Quebec. Following are highlights of his talks with senior Canadian officials.
- Rey gave brief progress report on EEC’s internal and external affairs. Internally he said institutions are working well. The mechanism of the Customs Union laid down by treaty is automatic and does not raise major policy issues. Progress is being made in the elaboration of policies in other fields covered by Rome Treaty. The role of the private sector is particularly striking. It is fully supporting implementation of the Common Market and is carrying out extensive programmes of rationalization directed towards rapid economic expansion. Rey thought that the psychological conditions for the success of the Common Market had been met, and that the EEC had overcome its growing pains. However, two areas of difficulty remained, – the Common Agricultural Policy and political cooperation. Rey described French and Dutch positions on political integration in familiar terms and indicated that current discussions among the Six were aimed at compromise.
- With respect to the EEC’s foreign relations, Rey expressed view that Article 24(6) negotiations had been generally satisfactory and could not go further. He was gratified by the prospect of early agreement with Canada on wheat. In the Dillon negotiations, however, the UK was the only country which indicated it was prepared to make a 20% across-the-board reciprocal tariff reduction a basis for negotiations. Rey expected the scope of the Dillon round to become clearer next month.
- He recalled that in Africa, all former AOT’s except Guinea had expressed desire to retain link with EEC and had accredited ambassadors to the European communities, a disposition which he thought reflected lack of confidence in the UN. Helpful contacts were being developed between these new countries and the Six. In Europe, Greece would become an associated member before the end of the year.
- Turning to the Six-Seven problem, Rey said commercial solutions were not favoured by the Commission. A settlement should take the form of adherence to Treaty of Rome. He emphasized that discussions between UK and EEC ministers and officials could not be regarded as negotiations. In his view, main difficulties for the EEC were related to: (1) the entry of a new senior member at a time of crucial decision, e.g., on agriculture, and (2) Commonwealth preferences and free entry into the UK market. While the EFTA and UK agricultural problems were manageable, it would be particularly difficult to formulate a solution safeguarding the integrity of both the Rome Treaty and the Commonwealth. The EEC Commission felt strongly that the UK should keep its Commonwealth ties for the benefit of the free world.
- On the timing of a possible settlement, Rey expressed doubts that the UK Government could plunge into negotiations without some knowledge of the nature of the solutions that would emerge. He envisaged instead a round-table conference with the UK and the Six, beginning perhaps in two months’ time. It would prepare a public report which would be available late in the fall. If the UK decided to join, negotiations could start in 1962 and possibly be carried well into 1963.
- Questions and comments from Canadian officials were addressed mainly to agriculture, the AOT’s and the UK’s European problem.
- They recalled Canadian concern over the terms of access for our agricultural exports to the EEC. Rey doubted that progress in the development of the CAP could be expected before the German elections. In view of French pressure, he thought that Germany would, however, move shortly after. He also thought that the CAP proposed by the Commission would eventually succeed and be less protectionist than the present various agricultural arrangements of the Six. The EEC Commission was less subject to political pressure than governments. But progress would be slow and the CAP would be the object of continuing consultations with other countries.
- In answer to questions on the renegotiation of the AOT’s association, Rey said that there was a strong school of thought in the Commission which regarded tariff preferences as out-dated. The French, however, considered that if the present system was scrapped, it might be impossible to replace it by another which would satisfy the former AOT’s. Rey thought that some compromise would be necessary in view of United States criticism of preferences and expressed surprise that this issue was not being brought up in the context of the Dillon negotiations. He was pessimistic about the prospects for free trade in tropical products and raw materials and thought that United States proposals for the elimination of preferences would give rise to considerable difficulties.
- We asked Rey what sort of terms for UK access to the EEC would in his view safeguard at the same time the principles of the Rome Treaty and Commonwealth interests. He replied that while the difficulties were clear, he knew of no answer. The problems first needed thorough study and the Six would have to develop common positions. It seemed to him, however, that the major issue was not that of UK preferences in other Commonwealth countries, but of the preferences the latter enjoyed in the UK market. Two extreme solutions had to be rejected, (1) the sharing of preferences, because of GATT, and (2) the complete elimination of preferences, because of its effects on the Commonwealth. Compromise solutions would thus have to be found, perhaps different ones for each commodity. The EEC Commission considered that the importance of the Commonwealth was essentially political, but realized that if its economic content were removed, its political fabric would be weakened. For that reason, it was prepared to compromise on the issue of Commonwealth preferences. (This, he emphasized, was a Commission view, not necessarily shared by all member governments.) Rey remarked that whether or not the UK joined the Common Market, the Commonwealth system of preferences would continue to be subject to erosion. The EEC had not created the present issue, but precipitated it. The difficulties inherent in the formulation of a CAP, by spilling over into the issue of the UK and Europe, were also aggravating it.
- Canadian officials agreed that Commonwealth preferences in the UK raised more intractable problems than UK preferences in other Commonwealth countries. Recalling the importance the French had attached to the latter in the 1957 European Free Trade Area negotiations, they suggested that the EEC Commission might be well advised to disinterest itself from what might happen in the rest of the Commonwealth. It was difficult, for example, to envision the extension of these preferences to the EEC but against the United States. Any elimination of preferences, especially in Canada, might in fact be of chief benefit to the United States.
Ambassador in France to Secretary of State for External Affairs
TELEGRAM 771 Paris, June 17, 1961
Audience with General De Gaulle
Yesterday, the President appeared tired with deep black rings under his eyes but his equanimity in surveying the situation was as complete as usual. President Kennedy’s Visit
- The best appreciation the General can give of any man is that he is responsible. He seemed happy to use the word in describing President Kennedy. He went on to say “Yes, he has great sense of responsibility. He sees where his responsibilities lie and he has the courage of facing them.”
- The General considers that we are noticing a great change in world affairs in the sense that the US are no repeat no longer “alone.” For almost two decades they occupied a position of such eminence due to their power that their authority had become almost exclusive. Now they realise that this period is over and that they must base the future on solidarity with their partners. They are therefore becoming more cooperative and ready to consult their allies on issues of common interest. I could understand the President’s satisfaction since this was exactly what he had been aiming at.
- As an instance of the change the General mentioned the gloomy exposé made by President Kennedy on the Latin American situation and his request that France use her good relations with South America in order to improve conditions. He invited the French Government to send observers to a conference which is due to take place in Washington on South American affairs next summer. He hoped that as a result France would find a way to closer cooperation with us on that continent.
- The General stated emphatically that between the USA and France there were no repeat no differences on all main world problems.
- I then asked whether they had discussed Berlin. “Yes and we are agreed to defend our position by all means. President Kennedy warned Khrushchev to that effect. There should be no repeat no doubt or mistake about our will to resist.” I enquired whether the General really thought that there was a risk of conflict. He replied that he was not repeat not convinced of it. “For three years Khrushchev has been giving six months delays to the West. If he wanted a show-down he would certainly not repeat not fix a date. Surprise is still an essential element in war. There must be a reason for him to maintain the question open. Pressure from somewhere I suppose but I can’t think he means business.”
- I wanted to know whether the agreement above mentioned on world affairs also included nuclear problems. He replied that they had discussed utilization of nuclear weapons in case of emergency. But that was all. As far as French nuclear programme was concerned, it was progressing satisfactorily. France would have a few bombs and a means of delivery sometime next year, but of course it would take a long time before her arsenal could in any way compare with the existing ones.
- The General looked completely relaxed and confident in talking about recent developments in Evian and Algeria. “Words, words this is what it is. They are petty agitators without any sense of reality, of government, of the future of Algeria. They can’t even agree amongst themselves. One is inspired by Nasser, another by Moscow, another by Peking, another by Tito. All their contradictions cannot repeat not amount to a policy. Then, they put on the same gramophone record on generalities. If they have something to offer we are ready to resume the talks. But they have no repeat no control on realities. We control them. They cannot repeat not build Algeria. We can. We have invested, not repeat not counting the military and administration expenditures, more than 400 billions in 1960. No repeat no other country could do it. Certainly not repeat not Russia and not repeat not even the USA. The fact is that the FLN has been receiving little help from its supporters. Just enough to maintain a certain nuisance value. No repeat no Tunisian or Moroccan has died for Algeria. Then what if the FLN are unable to move, we will go ahead. More peaceful measures will be taken Algeria to restore normal life. We will ask Algerians within the country to form a government and grant independence. If they are interested in remaining in one way or another associated with France, we shall go on helping them. If not, repeat not they can do what they like. We don’t need them. They can turn Communist if they wish. But we will keep under our control Algiers and Oran in order to protect our own people.” It has just been announced that Mr. Joxe is leaving for Algeria.
Memorandum from Under-Secretary of State for External Affairs to Secretary of State for External Affairs
CONFIDENTIAL [Ottawa], May 4, 1961
French Consular Officers to Deal with Cultural Affairs in Montreal and Quebec City
The French Ambassador, on instructions, has raised with the Department a suggestion for establishing French Government officials in Montreal and Quebec City to deal with cultural affairs and cultural exchanges. When he was told that it would not be permissible to establish these officers as members of the French Embassy staff if they were to live and work outside the Ottawa area, Mr. Lacoste asked in what capacity they could be established in those cities. He was told that consideration might be given to the addition of consular officers in their Consulates-General in Montreal and Quebec City to deal specifically with cultural matters. In response to a further question he was told that we would probably not object if such additional officers were to deal only with cultural affairs and cultural exchanges in the respective cities even if, in practice, they were to take their orders direct from, and be responsible to, the Embassy in Ottawa rather than the respective Consulates-General.
- Coming so soon after the establishment of a Quebec mission in Paris, these proposals by the French Government to increase its contacts with the Province of Quebec (essentially in the field of cultural affairs, of course) appear to force the pace of such Quebec-France relations to an extent where, in some quarters, political significance might be given to this move, particularly in view of the recent revival of separatist movements in the Province of Quebec.
- We recognize that it might be difficult to refuse concurrence in the appointment of additional officers to deal with cultural affairs in both Montreal and Quebec City (the Federal authorities would not wish to be in a position where it could be argued that they were interfering with the development of closer relations in the cultural field between Quebec and France).
- In the light of past French activities in dealing with French minority problems in other countries, there may be advantage, however, in taking some step to convey to the French authorities that their operations in this field will be watched carefully and that friendship with Canada is incompatible with any attempts to stimulate through cultural schemes activities which may have a negative effect on the development of our national unity.
- If you agree, it might be useful for myself or Mr. Cadieux to discuss the matter with the French Ambassador to see whether a solution could not be found which would ensure that these appointments, while they contribute to closer cultural relations, do not, in fact, lead to difficulties in the broader political context.
Memorandum from Assistant Under-Secretary of State for External Affairs to Under-Secretary of State for External Affairs
CONFIDENTIAL [Ottawa], May 9, 1961
French Consular Officers to Deal with Cultural Affairs in Montreal and Quebec City
The French Ambassador called on me this afternoon on instructions to discuss the appointment of these officers. The French authorities work under the impression that commercial representatives in Montreal and Toronto were entitled to diplomatic privileges and they were wondering why it was not possible for us to make a similar arrangement for cultural attachés. The French Ambassador said that he would explain the situation, e.g. that commercial representatives in these cities are only entitled to consular privileges and that it is not proposed to give French cultural representatives a different status.
- I took this opportunity, on a personal and confidential basis, to ask the French Ambassador whether he did not think that it might be advisable not to proceed with, or at least to delay, the appointment of the cultural officer in Quebec. I thought that so soon after the appointment of a Quebec representative in France, such a move might be misinterpreted in certain quarters. I stressed that this was not an official request, but merely an expression of some concern at the official level as to possible consequences. With the objective of developing cultural relations we were all in agreement, but some of us felt that there might be something to be said for making haste slowly.
- The French Ambassador said that he had argued very strongly with his own foreign office against the Quebec appointment, indicating a strong preference for the appointment of a cultural officer in Toronto instead. Speaking very privately, he added that he had received word from the Secretary-General that the Minister was very keen about finding a suitable post for someone who had been a member of his Cabinet.
- I asked the French Ambassador whether, in the light of our conversation, he might not find it possible to return to the charge. The Ambassador said that he would write personally to the Secretary-General, pointing out that there might be advantages in postponing the Quebec appointment.
- I indicated to the French Ambassador that I was not inclined to consider the prospect of the Quebec appointment in a tragic fashion. It was just that some of the extremist groups in Quebec might be anxious to involve French representatives in their schemes and that for a short while it might perhaps be preferable not to provide them with such opportunities.
- For convenient reference our memorandum on this subject to the Minister (dated May 4) is attached.
Memorandum from Assistant Under-Secretary of State for External Affairs to Under-Secretary of State for External Affairs
CONFIDENTIAL [Ottawa], May 16, 1961
Appointment of French Cultural Officers in Montreal and Quebec
I had a few words last night with the French Ambassador on this subject. He said that I would be interested to learn that he had discussed the matter with the Hon. Lapalme, who expressed the same views that we had: he thought that a cultural officer in Montreal made sense. He could not see the need for another one in Quebec. At least, not now.
- The French Ambassador expressed regret that he might not be able to persuade his colleagues in Paris not to proceed with both appointments.
- In the circumstances, do you think that it would be wise for me to send a personal word to Mr. Dupuy asking him to discuss the question informally with Basdevant, the Director of Cultural Relations, who is apparently pushing this scheme?
Ambassador in France to Secretary of State for External Affairs
TELEGRAM 694 Paris, June 3, 1961
CONFIDENTIAL. NO CIRCULATION. OPIMMEDIATE.
Following for Cadieux from Dupuy.
I had a long talk with our friend Basdevant this morning along the lines of your letters of May 16† and 24.†
- He explained that when General de Gaulle went to Canada last year he recommended to his Foreign Minister that more should be done to facilitate cultural relations between France and the Province of Quebec. A decision to have two cultural officers stationed one in Montreal and the other in Quebec was taken long before the French Government were informed of the Quebec Government’s intention of sending a permanent delegation to Paris.
- You know Basdevant well enough to imagine that he fully understands all the implications involved. This is why the Quai d’Orsay accepted so readily that French cultural officers should enjoy consular instead of diplomatic status.
- The plan now about to be implemented is as follows: (a) a young professor has already been appointed to join the Quebec Consulate in July next, (b) the assistant to the French Cultural Attaché in Ottawa will be transferred to the Montreal Consulate in August. At a later stage it is also intended to appoint a cultural officer in Toronto.
- It is through mere coincidence therefore that these appointments will be taking place at the same period as the Quebec delegation is installed in Paris. If the sending of the cultural officers were to be delayed it would mean explaining this situation to General de Gaulle himself. If you wish me to do so, I shall not repeat not fail to follow the department’s instructions, but I am not repeat not personally convinced that we should insist on postponement at this stage.
- Basdevant has given me every assurance that publicity would be avoided concerning the Quebec appointment and that his instructions would guaranty maximum discretion.
Dublin, March 6, 1961
Prime Minister’s Visit to Dublin: Mr. Diefenbaker’s Conversations with Mr. Lemass at the Taoiseach’s Office
Mr. Aiken and Mr. Rive.
Mr. Lemass and Mr. Diefenbaker spent a little time talking about the difficulties of the situation in the Congo. Mr. Lemass reported that the latest news on the radio just before the meeting was that of the nine Canadians presumed to have been taken prisoners in Matadi, nine had returned to their unit and one was missing. He remarked that this was probably not so much “Congolese arithmetic” as that information about the Congo was never very accurate.
Mr. Aiken mentioned that he understood Nkrumah would be on his way to New York later this week to put forward the proposal that the United Nations forces in Africa should be provided only by black African nations. Mr. Diefenbaker expressed himself strongly against any such proposal on the grounds that it is against the principles of the United Nations. Mr. Aiken agreed. Mr. Lemass did not take part in this exchange.
After some further brief but discursive remarks about Nkrumah with reference to Mr. Herter’s statement last year implying that Nkrumah is a Communist, Mr. Aiken spoke of the tendency of Washington to “see the red lining,” and of the danger of presuming that western democracy, as we know it in Canada and Ireland, can be transplanted to a country such as Ghana or any other backward and undeveloped country just arriving at independence.
Mr. Lemass turned to the economic field and said that a fully free enterprise system was impossible, that there had to be state enterprise on a much larger scale than here, and assistance for capital expenditures, not dependent on the private investor.
The conversation then went on to a discussion of the importance of foreign capital investment in Canada and in Ireland. The Prime Minister drew attention to the enormous quantities of investment capital entering Canada from the United States which was responsible, or at least had made it possible, for Canada to maintain its economy despite a very large import surplus. Mr. Lemass agreed. Canadian balance of payment situation, Mr. Diefenbaker said, had shown a deficit of from 300 to 700 million dollars each year since 1952. (The writer is not sure if these are the figures given by Mr. Diefenbaker.)
Mr. Diefenbaker mentioned that the importance of American capital, and American branch companies in Canada, had long been a cause of worry to the Canadian Government and that finally an Act had been put on the statute books to ensure some degree of independence of the parent company, to the subsidiary, and to ensure that Canadians would be given the opportunity to buy some of the equity stock of such subsidiary companies.
Mr. Lemass said that in some ways this situation is paralleled in Ireland but not entirely, first, because Ireland is at the moment struggling to get capital investment from abroad and, second, because of what investments were being made from abroad were being made by a number of countries. He mentioned the two Canadian mining companies.
Reference was made to movement of trade between Ireland and Canada and Mr. Diefenbaker referred to the statistics which show in a great excess of exports from Canada to Ireland over exports from Ireland to Canada. Mr. Lemass mentioned that wheat is a large item on the import side whenever Ireland has a crop failure, and that on the export side, Ireland is developing some new exports in a small way. Mr. Rive mentioned chocolate crumb.
Mr. Diefenbaker asked about Ireland’s relations to the Six and Seven. Mr. Lemass said that Ireland’s problem was not so much the Six and Seven but what will be Great Britain’s relations to the two. From two-thirds to three-quarters of Ireland’s trade, both import and export alike, is with Great Britain. As things are at present, she has to look to the British market for any improvement of her exports. Her basic products are from the farm; cattle, meat and dairy products. Their one important outlet is Britain.
Ireland, Mr. Lemass said, has some advantage in the British market because of the Ottawa agreements of 1932, renewed in 1938 and 1948. What he was concerned about was whether these might be cut as a result of British concessions to get into the Common Market. He repeated that whatever Britain did Ireland would have to follow.
Mr. Lemass said he did not like the suggestion that the British might come into the Common Market but exclude agriculture. He thought this might be the worst possible situation for Ireland in that they would lose their preferences in the British market and get no compensatory advantages in the Common Market. On the other hand, if EFTA became a continuing reality the Irish situation would not be improved because the British would be committed to extending the preferences to the other members of the Seven. Also, both groups were rushing to cut their tariffs and, at the present stage of infant and developing industries, this would have serious disadvantages for Ireland. He implied that she had to have some special concessions whatever might be the outcome. Six, Seven or status quo.
Mr. Diefenbaker referred to the Daily Express story in this morning’s paper (March 6) that “he would fight for the maintenance of preferences” which he had not said, but said that nonetheless he was naturally concerned in as favourable an outcome as possible for Canadian position.
Mr. Lemass expressed the opinion that the British approach to the Six was “half-hearted” and not likely to succeed at this time. He thought the half-heartedness was because Mr. Macmillan and some of his Ministers were opposed. The Board of Trade was against an approach to the Six. Mr. Macmillan was making the approach because he felt pressure from sections of the public and from some manufacturers. Mr. Lemass said and Mr. Diefenbaker agreed that the British might have in mind that Adenauer and de Gaulle could not last forever.
In the course of the discussion Mr. Lemass spoke of the subsidizing of export butter in Ireland and of the difficulties resulting. Mr. Diefenbaker was able to cap this by reference to the problems raised by price supports on farm products in Canada.
Reference was made to Japanese competition, especially of cotton goods in Canada and of cotton and other goods in Ireland, and of the very serious competition from China from or through Hong Kong. Mr. Lemass explained the encouragement given to the growing of wheat in Ireland by the system of setting a price which the millers had to pay for wheat and explained the paradox that when the wheat crop fails, wheat is cheaper to the millers so the cost of flour and bread goes down.
At the conclusion of the discussion, Mr. Lemass presented Mr. Diefenbaker with two volumes of D’Arcy McGee’s books, his History of Ireland and a collection of poems.
- Footnote 1
See “Algeria: Negotiations Broken Off,” Globe and Mail, June 17, 1961, p. 8.
- Footnote 2
OK. H. G[reen] 5/5
- Footnote 3
Noted. N.A. R[obertson]
- Footnote 4
- See Volume 27, Chapter V, Part 2(a).
- Footnote 5
Canada? [Marcel Cadieux]
- Footnote 6
It is not the first time that de Gaulle is used as a scarecrow. M. C[adieux]
- Footnote 7
1. We could not suggest representations to de Gaulle.
. 1. I think that we have done our best. Perhaps we might urge Toronto appointment? M. C[adieux]
I agree. I don’t think this can be carried further. [N.A.] R[obertson]
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