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OF DAMAGE AND FINDING AN APPROPRIATE COMPENSATORY ACTION. MORE-
OVER THE BRITISH PROPOSALS COMING AT THE PRESENT TIME WHEN THE
CANADIAN TEXTILE INDUSTRY WAS ITSELF MEETING SUBSTANTIAL DIFFICULT-
IES, COULD HAVE THE EFFECT OF LEADING CANADA TO ADOPT A LESS LIBERAL POLICY ON TEXTILES. HINTS WERE THROWN OUT, THAT THE 1947 EXCHANGE OF LETTERS MIGHT NEED REEXAMINING, AND, THAT, IF WE PURSUED OUR
POLICY, THE CANADIAN GOVERNMENT MIGHT FEEL FREER TO ADOPT TARIFF
POLICIES WHICH GAVE GREATER WEIGHT TO THE OBJECTIVE OF MAINTAINING, SO FAR AS POSSIBLE, THE BRITISH PREFERENCE (A VIEW WHICH HUGHES STRONGLY CONTESTED). THE CANADIANS URGED THEREFORE, THAT WE SHOULD LOOK AGAIN AT OUR POLICY AND FIND SOME WAY OF EXEMPTING CANADA, OR THE PRODUCTS EXPORTED BY CANADA, FROM THE TARIFF,
3. HUGHES AND CAREY, OF COURSE, EXPLAINED THE MAJOR REASONS OF
POLICY WHICH HAD LED THE BRITISH GOVERNMENT TO THEIR PROPOSED ACTION.
THEY BROUGHT OUT THAT IN THEIR VIEW, A GREAT DEAL OF THE CANADIAN
EXPORT TRADE HAD BEEN BUILT UP SIMPLY AS A RESULT OF THE QUOTAS WE
HAD IMPOSED ON DEVELOPING COUNTRIES. AND THEY STRESSED THAT CANADA
WAS NOT ALONE IN FACING DIFFICULT POLITICAL PROBLEMS: THE BRITISH
SOLUTION WAS AN ATTEMPT TO MOVE AWAY FROM A PERIOD OF QUOTA CONTROLS
AND TO PROVIDE THE BRITISH INDUSTRY WITH TARIFF PROTECTION ON A
PERMANENT BASIS AND IN SUCH A FORM AS TO BE BROADLY CONSISTENT WITH
THE PURPOSES AND INTENTIONS OF THE G.A.T.T.
4. IN VIEW OF THEIR GENERAL POSTURE, THE CANADIANS WERE RELUCTANT TO GET DOWN TO ANY DISCUSSION OF THE EXTENT AND NATURE OF THE
DAMAGE THEY MIGHT SUFFER. CAREY DID HOWEVER HAVE SOME DISCUSSION WITH A CANADIAN TEAM HEADED BY GUERIN (DEPT. OF INDUSTRY TRADE AND COMMERCE) IN WHICH THE MAIN ITEMS WERE EXAMINED AND THE CANADIANS
DEVELOPED THEIR ARGUMENTS ABOUT THOSE CASES IN WHICH THEY FEARED
THE U.S.A. RATHER THAN THE DEVELOPING COUNTRIES WHICH TAKE THE TRADE. IT WAS AGREED THAT BOTH SIDES WOULD LOOK FURTHER INTO CERTAIN POINTS
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CONFIDENTIAL
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