(C) SAME SECTION. PENSIONERS. PRESSURE OF CANADIAN MDS A
MINISTERS CONTINUES TO BUILD UP. THE CANADIANS RECARD THIS AS A CONSIDERABLE CONTINUING MINUS IN THE RELATIONSHIP AND SOME- THING WHICH WE REALLY SHOULD TRY TO RESOLVE. DESPITE THE TERMS OF LORD GLENARTHUR'S LETTER OF 4 DECEMBER TO JAKE EPP, THE CANADIANS CONTINUE TO HOPE THAT WE WILL BE ABLE TO FIND THE MEANS TO END THIS ANOMALY, OR AT LEAST MAKE A STAPT BY SOME FORM OF PHASING IN. (EG BY AT LEAST PAYING FUTURE INCREASES - AT A COST RISING BY 2.5 MILLION POURDS EACH YEAR: CF MR WHITNEY'S REPLY TO & PO ON 20 FEPRUARY). THE CANADIANS ALSO MAINTAIN THAT THERE WOULD RE CONSIDERABLE COMPENSATORY BENEFIT TO THE UK ECONOMY FROM A RECIPROCAL AGREEMENT (WHICH WOULD IN ITSELF RESULT IN SEVERAL THOUSAND MORE CANADIANS RECEIVING PENSIONS). THE PROBLEM HAS GAINED EXTRA PROMINENCE BECAUSE OF DELAYS IN PAYMENT STILL OCCURRING IN THE WAKE OF THE THE DHSS STRIKE: BUT IT WILL BY NO MEANS GO AWAY WHEN THOSE DELAYS CEASE.
(D) ON PARA 2(A), US/CANADIAN RELATIONS: THIS WOULD BE A
GOOD OPPORTUNITY TO SAY THAT WE ARE FOLLOWING WITH INTEREST THE DEBATE IN CANADA ABOUT FURTHER LIBERALISATION OF TRADE WITH THE UNITED STATES (AND INDEED POTENTIAL FOR GREATER TRADE
WITH THE PACIFIC RIM): PUT TO REMIND THE CANADIANS OF THE IMPORTANCE WE ATTACH TO OUR TRADE WITH THEM, AND THE PELATIVELY HIGH PROPORTION OF MANUFACTURING COODS IN CANADA'S EXPORTS TO BRITAIN, COMPARED WITH THEIR EXPORTS TO THOSE OTHER DESTINA-
TIONS. (WE ARE IN FACT SECOND ONLY TO THE UNITED STATES AS
IMPORTERS OF CANADIAN MANUFACTURES: AND WELL AHEAD OF THEM IN
TERMS OF THE SHARE MANUFACTURES REPRESENT IN WHAT WE BUY FROM
THEM. A LARGE PART OF WHAT THE STATES AND JAPAN BUY FROM CANADA IS PRIMARY PRODUCE, EG LUMBER AND COAL AND REPRESENTS, TO SOME EXTENT, WHERE CANADA HAS COME FROM RATHER THAN WHERE CANADA WISHES TO CO).
(E) IN CONNECTION WITH 1(A) ECONOMIC SUMMIT ISSUES (AND FIRA AND NEP: 1(E) AND 3) THERE MAY BE AN OPPORTUNITY TO EXPLORE MULRONEY'S PLANS FOR HANDLING THE DEFICIT IN THE PAY RUDGET:
AND TO EXPRESS INTEREST IN HIS PLANS FOR PRIVATISATION, DE-
REGULATION AND GENERALLY FREEING UP THE MARKET.
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