COORDINATING COMMITTEE MEMORANDUM BY THE CANADIAN DELEGATION TRADE AGREEMENT BETWEEN CANADA AND THE U.S.S.R.

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP62-00647A000200010062-2
• Release Decision: RIFPUB
• Original Classification: U
• Document Page Count: 7
• Document Creation Date: December 9, 2016
• Document Release Date: August 20, 1998
• Sequence Number: 62
• Publication Date: June 22, 1960
• Content Type: MEMO

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22nd June, 1960. COCOM Document No. 4039
COORDTNATII%TG COi\ ITTEE
I ICRANDUIT BY THE C..N DIALN DELEGATION
TRADE AGREEMENT EETVIEEN CANADA AND THE U.S.S.R.
4604922
The Canadian Delegation h-uve the pleasure to submit herewith the
following documents concerning the renewal of the Trade Agreement between
Canada and the U.S.S.R.:
Annex A. A statement by the Hcnourable Gordon Churchill, Minister
of Trade and Commerce, in the House of Commons, Ottawa,
on Ionday, April 25, 1960 respecting the renewal of the
Trade Agreement between Canada and the U.S.S.R.
Annex B. The Protocol renewing the Trade L reement on February
29, 1956 between Canada and the U.S.S.R.
Annex C. Letters exchanged between the two parties.
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UNCLASSIFIED ANNEX A. to
COCOM Document No. 4039
CANADA -- U.S.S.R. TRADE AGREEMENT
Statement by the Hon. Gordon Churchill,
Minister of Trade and Commerce, in the
Hcuse of Commons, on Monday, Lpril 25,
1960.
Mr. Speaker:
I now table, fog the information of the House, the text of the
Protocol signed in Moscow on April 18, 1960, which renews for a three-year pe-
riod the Trade Agreement between Canada ana the Union of Soviet Socialist
Republics of February 29, 1956, as well as the understanding set out in the
letters which the two Parties exchanged? at that time concerning the right of
the Canadian Government to fix under the Canadian Customs Act values of goods
for ordinary and spacial duty.
The Protocol also provides that each of the two governments will
give sympathetic consideration to any representations which the other govern-
ment may make concerning the implementation of the renewed Agreement and with
regard to other matters which may affect their commercial relations. The
Protocol is in force provisionally from the irate of signature. It is to be
ratified as soon as possible, and will enter into force definitively on the
date of exchange of instruments of ratification, which is to trke place in
Ottawa. An early opportunity will be provided for a debate in Parliament, and
a resolution of approval vr? 11 be introduced to this end.
I also have pleasure in tabling copies of letters which I exchanged
with the Soviet Minister of Foreign Trade, Mr. N,S. Patolichev, setting forth
certain additional understandings concerning the development of trade between
the two countries.
If the House agrees, I suggest that the text of the Protocol and
of the letters be printed as an appendix to Votes and Proceedings.
As honourable members are aware, the negotiations for renewal of the
Trade Agreement with the U.S.S.R. took considerable time. They were initiated
before the 1956 Agreement lapsed on February 28, 1959, and the early discussions
were not without difficulties. However, common ground was eventually found and
the Agreement is being renewed on terms which I consider satisfactory from the
Canadian point of view, particularly taking into account the changed trading
circumstances since the earlier agreement was concluded.
The House is familiar with the provisions of the 1956 Agreement,
which is now being extended. In brief, Canada and the U.S.S.R. exchange most-
favoured-nation treatment and, on a reciprocal basis, provide for non-discrimi-
natory treatment of merchant ships in the seaports of the two countries. Either
government may, however, apply prohibition or restrictions of any kind directed
to the protection of its essential security interests- Our strategic export
controls are therefore not affected. The Protocol extending the Agreement
broadens the basis on which representations can be addressed to either of the
two Parties. Previously, the two governments had agreed to give sympathetic
consideration to representations concerning the implementation of the Agreement.
The scope for such representations has now been enlarged to include any other
matters affecting commercial relations between the two countries. Should the
necessity arise, this would permit Canada, for example, to take up with the
Government of the U.S.S.R. any special problems which may be encountered in
respect of the sale in world markets of Soviet products in which Canada has a
substantial export interest.
The letter which I exchanged with Mr. Patolichev provides that, in
each year of the renewed Agreement, the Soviet foreign trade organisations will
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UNCLASSIFIED - 2 - ANNEX A. to
COCA Document No. 4039
purchase Canadian goods up to a total value of 4 25 million Canadian, including
not less than 200,000 metric tons of Canadian wheat, provided the total annual
value of Canadian purchases from the U.S.S.R. is not less than $ 12 and a half
million Canadian. Should the total value of Canadian purchases from the U.S.S.R.
be less than 4 12 and a half million Canadian in any one year, the Soviet under-
taking to purchase from Canada would be reduced and would be determined on a 2
to 1 basis; that is, the Soviet Union would purchase twice as much from Canada
as Canada imported from the Soviet Union. wheat will constitute not less than
half the value of such annual Soviet purchases. It will be noted that no
commitment to purchase Soviet goods has been made by the Canadian Government.
As in the case of trade with other countries, the level of our purchases will
be determined by the commercial decisions of Canadian importers. The House
will appreciate that U.S.S.R. agreement to trade with Canada on a 2 to 1 basis
represents a very substantial concession on their part, since the Soviet Union
normally endeavours to balance trade with each of its trading partners.
In addition to establishing the Soviet commitment to purchase
Canadian goods, the letter provides that the authorities of the two countries
will meet at least once a year alternately in Ottawa and Moscow to consult
concerning the implementation of the Agreement and any other matters affecting
Soviet-Canadian trade relations. It is the hope of both parties that trade
will flow reasonably regularly in each year of the Agreement. The annual
consultations will provide the occasion for an exchange of views with respect
to the operation of the Agreement. They should also prove of value in building
up greater understanding between the two countries with respect to trade matters.
The letter also sets forth an understanding that, as a measure to-
wards attaining the mutual objective of an expansion of trade, the two govern-
ments will facilitate visits for business purposes between the two countries.
It is my hope that, within the framework of the renewed Agreement and in pur-
suance of the undertakings in the letter which has been exchanged, there will
be a mutually advantageous growth in trade between the two countries. The
actual growth in trade and the nature of the goods to be exchanged will depend
mainly on the decisions of the businessmen and business organisations of the
two countries. The Canadian market is highly competitive and it will be neces-
sary for the Soviet export authorities to understand our requirements if they
are to sell successfully in Canada. Similarly, it will be important for Cana-
dian exporters to make known to the Soviet import organisations the products
and goods which they are in a position to supply on competitive terms. In
general, it will be necessary for there to be much closer contact between the
traders of the two countries than has been the case in the past. To this end I
have suggested, and the Soviet authorities have agreed, that a group of Soviet
traders, representing both export and import interests, should visit Canada,
and the Soviet authorities have indicated that they would welcome a comparable
visit of Canadian businessmen to the Soviet Union. I hope that the necessary
arrangements for these visits can be made during the current year. I have also
invited the Soviet Minister of Trade, Mr. Patolichev, to come to Canada, and
this invitation is being considered by the Soviet Government. I hope that he
will find it convenient to come at the same time as the visit of Soviet trade
representatives.
As a further measure to facilitate the growth of trade, Mr. W.J.
Van Vliet has been appointed Commercial Counsellor at the Canadian Embassy in
Moscow, where his main responsibility will be to assist in the promotion of our
exports to the U.S.S.R.
The House will recall that, under the 1956 arrangement, the Soviet
Union took an annual obligation to purchase a specified minimum quantity of
wheat (400,000 tons). The new arrangement provides that at least half the value
of the annual Soviet purchase commitment will be in the form of wheat. If
Soviet purchases were to rise to the value of 4 25 million, our sales would in-
clude at least 200,000 tons of wheat. Accordingly, while the Soviet Union will
continue to purchase significant quantities of Canadian wheat, we may now look
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UNCLASSIFIED - 3 - ANNEX A. to
COC0M Document No. 4_
towards more diversified sales to the U.S.S.R. Both sides are aiming to diver-
sify as well as to expand trade. The House is aware that the Soviet Union has
greatly enlarged its production of wheat and is a regular wheat exporter. In
the circumstances, the amount of wheat which the Soviet Union has undertaken
to purchase may be regarded as satisfactory. I should add that 1raiced with
the Soviet Government the question of the approximately 200,000 tons of wheat
still outstanding under the old Agreement. Provided trade develops in a satis-
factory manner, in accordance with the Agreement and the letters exchanged in
Moscow, I was assured by its. Patolichev that the Soviet Union would endeavour
to make up this deficiency so that there would be no question of the Soviet
Union not having fulfilled the earlier obligation.
Mr. Speaker, I should like the House to know that I was received
with genuine friendship and courtesy by the Soviet Ministers and senior offi-
cials I had the opportunity to meet. In addition to Mr. Patolichev, I had the
pleasure of general discussions snith Mr. F.R. Kozlov and Mr. A.I. Mikoyan, both
First Deputy Premiers of the Soviet Union. These gentlemen showed a welcome
awareness of Canada's interests as a world trade and major exporter. Our con-
versations were frank and constructive.
The hospitality which was shown to me and to the other members of
the Canadian delegation wa3 generous and memorable.
I believe that over and above the provisions of the Agreement and
the exchange of letters, a basis has been established for closer and more fruit-
ful co-operation between the two countries in the field of trade.
The following are attached, as appendices to this statement:
(a) Copy of Protocol, which was signed by the Hon. Gordon Churchill
and Mr. N.S. Patolichev
(b) Copy of letter from the Hon. Gordon Churchill to Mr. N.S.
Patolichev, dated April 3.8, 1960
(c) Copy of translation of letter from Mr. N.S. Patolichev to
the Hon. Gordon Churchill, dated April 18, 1960.
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UNCLASSIFIED ANNEX B. to
COCOM Document No. 4039
P R O T O C O L
In connection with the expiration of the Canadian-Soviet Trade Agreement
concluded in Ottawa on February 29, 1956, for a period of three years, the
Government of Canada and the Government of the Union of Soviet Socialist
Republics, desiring to expand and diversify further the trade between the
two countries on the basis of mutual advantage, have agreed as follows:
1. With the exception of Article IX, the Trade Agreement between Canada
and the Union of Soviet Sccialist,Republics of February 29, 1956, as
well as the understanding set out in the letters which the two
Parties exchanged on the sane date regarding the establishment of
values of goods for duty, are hereby extended for a period of throe
years from the date of signature of this Protocol.
2. Each of the two Governments hereby affirms that it will give
sympathetic consideration to any representations which the other
Government may make in respect to the implemientation of this
Protocol and of other ratters affecting their commercial relations.
3. This Protocol shall be ratified by both contracting parties as soon
as possible end shall enter into force provisionally on the date
of its signature and defini ively on the date of exchange of the
instruments of ratification which shall take place in Ottowa. The
Protocol shall remain in force for three years from the date of
signature.
Done in Moscow this 18th day of April, 1960, in duplicate, in the
English and Russian languages, both equally authentic.
By authority of the Government By authority of the Government
of Canada. of the Union of Soviet Socialist
Republics.
Gordon Churchill N.S. Patolichev
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UNCLASSIFIED C. to
COCOM Document No. 4039
Moscow, April 18, 1960
I have the honour to confirm that in pursuance of the desire of
the Government of Canada and the Government of the USSR to expand and
diversify trade between our two countries, as provided in the Protocol
signed today extending the Canadian-Soviet Trade Agreement for a further
three-year period, we have reached the following understandings:
1. The representatives of the competent authorities of the two
countries will meet at least once a year, alternately in
Ottawa and Moscow, to consult concerning the implementation
of our respective undertakings and any other matters affecting
Canadian-Soviet trade relations.
2. It is understood that as a measure towards attaining our mutual
trade objectives the competent authorities of the Government of
Canada and the Government of the USSR will facilitate visits for
business purposes between the two countries.
3. It is further understood that the Ministry of Foreign Trade of
the USSR, in accordance with its customary procedures, will see
to it that Soviet foreign trade organizations each year during
the three-year period from this date purchase in Canada, under
normal commercial conditions, Canadian goods of their choice
and which may be exported by Canada to a total value of 25 million
Canadian dollars, including not less than 200,000 tons of Canadian
wheat, provided the total annual value of Canadian purchases from
the USSR is not less than 12.1 million Canadian dollars. Should
the total value of Canadian purchases from the USSR be less than
121 million Canadian dollars in any one year, the relationship
between the value of such Canadian purchases and the value of
those of the Soviet Union shall be in the ratio of 1 to 2; wheat
will constitute not less than half of the value of the annual
Soviet purchases.
The markets of Canada and the USSR are large and expanding. It
is the hope of both Governments that there will be a mutually advantageous
growth in the exchange of goods between Canada and the USSR over and above
that provided for in point 3 above, within the general terms of the
Canadian-Soviet Trade Agreement.
Accept, Mr. Minister, the assurances of my highest consideration.
Gordon Churchill.
Mr. N.S. Patolichev,
Minister of Foreign Trade of the USSR,
M 0 S C 0 W.
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UNCLASSIFIED
A.NNE% C. to
COCOM Document No. 4039
(Continued)
Moscow, April 18, 1960.
I have the honour to confirm that in pursuance of the desire of
the Government of the USSR and the Government of Canada to expand and
diversify trade between our two countries, as provided in the Protocol
signed today extending the Soviet-Canadian Trade Agreement for a
further three-year period, vie have reached the following; understandings:
1. The representatives of the competent authorities of the two
countries will root at least once a year, alternately in Ottawa
and Moscow, to consult concernin3 the implementation of our
respective undorta.kinc*s and my other matters affecting Soviet-
Canadian trade relations.
2. It is understood that as a measure towards attaining our
mutual trade objectives the competent authorities of the
Government of the USSR and the Government of Canada will
facilitate visits for business purposes between the two
countries.
3. It is further understood that the Ministry of Foreign Trade
of the USSR, in accordance with its customary procedures, will
see to it that Soviet foreign trade organizations each year
during the tree-year period from this date purchase in Canada,
under normal commercial conditions, Canadian goods of their
choice and which may be exported by Canada to a total value of
25 million Canadian dollars, including not less than 200,000
tons of Canadian wheat, provided the total annual value of
Canadian purchases from the USSR is not less than 122 million
Canadian dollars. Should the total value of Canadian purchases
from the USSR be less than 122 million Canadian dollars in any
one year, the relationship between the value of such Canadian
purchases and the valae of those of the Soviet Union shall be
in the ratio of 1 to 2: wheat will constitute not less than
half of the value of the annual Soviet purchases.
The markets of Canada and the USSR are large and expanding. It
is the hope of both Governments that there will be a mutually advantageous
growth in the exchange of goods between the USSR and Canada over and above
that provided for in point 3 above, within the general terms of the Soviet-
Canadian Trade A-reomont.
Accept, Mr. Minister, the assurances of my highest consideration.
N.S. Patolichev.
The Honourable Gordon Churchill,
Minister of Trade and Commerce of Canada,
Mo s cow.
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