currency lent. The resources of the Fund for Special Operations are available for loans on terms and conditions appropriate for dealing with special circumstances arising in particular countries or with respect to specific projects. In addition to direct loans and guarantees, an important function of the Bank will be the provision of technical assistance for the preparation, financing, and implementation of development plans and projects, including the formulation of specific project proposals.

Although the Bank made no loan commitments in the period under review, 194 loan applications were received from governmental, public, and private enterprises in 18 member countries. Classified by purpose, over 60 percent of all loan applications submitted through the end of 1960 were for industry and social development (housing, hospitals, health, schools, etc.). Three-fourths of the applications received by the Bank came from the private sector."1

Because of its limited resources and the large demand for financial assistance in Latin America, the Bank, in its choice of projects, has indicated that it will give priority to such loans and guarantees that can contribute most effectively to the economic growth of its member countries. Its resources will not be available for general balance-ofpayments purposes, to cover budgetary deficits, or to provide working capital, or when funds are available to the borrower from private sources on terms considered reasonable by the Bank.

D. Canadian-United States Relations

128. FIFTH MEETING OF THE JOINT UNITED STATES-CANADIAN COMMITTEE ON TRADE AND ECONOMIC AFFAIRS, WASHINGTON, FEBRUARY 16-17, 1960: Joint Communiqué Issued February 17, 1960 1

1

1. The fifth meeting of the Joint United States-Canadian Committee on Trade and Economic Affairs was held at the Department of State, Washington, February 16 and 17.

2. Canada was represented at the meeting by the Honourable Donald M. Fleming, Minister of Finance; the Honourable Gordon Churchill, Minister of Trade and Commerce; and the Honourable Douglas S. Harkness, Minister of Agriculture.

"On Feb. 3, 1961, the IDB announced its first loan, equivalent of $3.9 million to improve and expand the water supply and sewerage systems in Arequipa, Peru. [Footnote in source text.]

1

1 Department of State press release No. 70 (text as printed in the Department of State Bulletin, Mar. 7, 1960, pp. 365-367). The Committee was established Nov. 12, 1953. See TIAS 2922; 5 UST 314; 223 UNTS 139 and American Foreign Policy, 1950–1955: Basic Documents, p. 1404.

690-494--64- -24

3. The United States was represented by the Honorable Christian A. Herter, Secretary of State; the Honorable Douglas Dillon, Under Secretary of State; the Honorable Robert B. Anderson, Secretary of the Treasury; the Honorable Fred C. Scribner, Under Secretary of the Treasury; the Honorable Fred A. Seaton, Secretary of Interior; the Honorable Ezra T. Benson, Secretary of Agriculture; the Honorable Frederick H. Mueller, Secretary of Commerce; and Mr. Don Paarlberg of the White House.

4. The members of the Joint Committee were accompanied by Ambassador Heeney of Canada and Ambassador Wigglesworth of the United States, and senior officials of departments and agencies of the two governments.

5. The Committee reviewed recent economic developments in the United States and Canada. They noted that the expansion of economic activity was continuing in both countries and that output and employment had reached new high levels. Sustained efforts to avoid inflation had been made in both countries and price increases in 1959 had been slight. The Committee agreed on the desirability of policies designed to bring about even greater expansion of trade on a multilateral basis.

6. The Committee noted with satisfaction the substantially improved economic and financial position of most other countries and in this connection welcomed the considerable progress made since the last meeting in the removal of restrictions and the elimination of discrimination against exports from the dollar area. However, the Committee emphasized the importance of securing the complete removal of the remaining quota discrimination in world trade.

7. In reviewing agricultural problems the Committee noted the prevalence of special restrictions on agricultural trade throughout the world and emphasized the importance of pursuing policies which would encourage an expansion of trade. The Committee agreed that incentives leading to an accumulation of burdensome surpluses should be avoided. In regard to programs of surplus disposal, the Committee emphasized the importance of continuing to safeguard normal commercial markets. In this connection the Committee noted with satisfaction the useful work at the quarterly consultations of United States and Canadian officials on wheat and flour problems.3

8. There was discussion in the Committee concerning certain restrictions on agricultural trade between the two countries. Canadian interest was expressed in the removal of United States import restrictions on flaxseed, linseed oil, and cheddar cheese. The United States representatives expressed interest in the removal of Canadian import controls on turkeys.

9. The Committee discussed recent developments in the fields of petroleum and natural gas. They agreed upon the desirability of close cooperation between the National Energy Board of Canada and the

2 See American Foreign Policy: Current Documents, 1959, pp. 493–496. A procedure established at the fourth meeting of the Committee.

United States Federal Power Commission. The Committee recognized also that the two governments should keep each other closely informed of developments in either country bearing on trans-border movements of petroleum and natural gas.

10. Canadian Ministers expressed their continuing concern about the quota restrictions imposed in September 1958 by the United States on imports of lead and zinc,* and urged that these temporary restrictions be withdrawn and no other barriers to trade placed in the way of sales of these basic materials to the United States. It was noted that the recent report of the United Nations' Lead and Zinc Study Group indicated a good balance between available supply and demand for zinc and some improvement in this respect for lead. The United States representatives noted the Canadian views and pointed out that while the restrictions could not be withdrawn until there had been substantial improvement in the distressed segments of the United States lead and zinc mining industries, the question of import treatment of lead and zinc is under continuous review and is now before the United States Tariff Commission as well.

11. Canadian and United States representatives discussed the outlook of the uranium industry in both countries and agreed on the importance of keeping each other informed of development prospects. 12. Canadian Ministers drew attention to the difficulties which are created for the Canadian cotton textile industry by the United States equalization payments on cotton products. The United States representatives explained that no fundamental change in their system, which is designed to equalize the cost of raw cotton to manufacturers in the export trade, appeared practicable at this time, but both sides agreed that the matter should receive continued study.

13. The United States representatives expressed concern about the introduction of a new charge for the use of air navigation facilities by civil aircraft over-flying Canadian territory on North Atlantic routes. The Canadian Ministers pointed out the charge covered only a part of the large and growing costs of these facilities.

14. The Committee exchanged views on the increasing activity of Soviet bloc countries in world trade and the possible implications of this development for the future.

15. The Committee considered the problems which have arisen from rapid increases of imports into Canada and the United States in certain lines of low-cost manufactured goods. They were agreed on the importance of finding a general international solution which would provide exporting countries with adequate outlets for their products, would insure that the impact of low-cost competition would be more evenly distributed among the importing countries, and would at the same time, safeguard the industries of importing countries from serious injury. It was noted that a study of this important problem had

'See American Foreign Policy: Current Documents, 1958, pp. 1496-1501. B Study Group doc. No. 7, Feb. 19, 1960. [Footnote in source text.]

been undertaken by the Contracting Parties to the General Agreement on Tariffs and Trade."

8

16. The Committee also discussed economic developments on the international scene with particular reference to the Paris economic meeting of January 12-14. This included a review of the situation arising from the establishment of the European Economic Community and the European Free Trade Association, as well as an evaluation of the role Canada and the United States may play with regard to these developments. The Committee were agreed on the desirability of finding solutions to current trade problems in Europe on a multilateral basis which would take full account of the interests of other countries.

17. The Committee noted the importance of the level to be established for the common tariff of the European Economic Community including the tariff rates for basic materials and certain other products which are still under negotiation within the Community. The Committee considered that arrangements for trade in agricultural products in Europe should be such as to facilitate imports of agricultural goods from other countries on a competitive basis and agreed on the importance of intensified international efforts to deal with this problem.

18. There was an exchange of views on other matters arising from the Paris economic meetings, including development aid to the less developed countries and proposals for the reconstitution of the Organization for European Economic Cooperation.10

19. The Committee reaffirmed the value of their periodic joint meetings, and expressed satisfaction at the high degree of understanding and cooperation between the two governments. It agreed to hold the next meeting in Ottawa.

CANADIAN TARIFF CONCESSIONS ON TEXTILES AND RELATED PRODUCTS NEGOTIATED WITH THE UNITED STATES AND OTHER COUNTRIES UNDER THE GENERAL AGREEMENT ON TARIFFS AND TRADE: Announcement Issued by the Department of State, April 1, 1960 11

See American Foreign Policy: Current Documents, 1959, p. 1531.

T See post, docs. 135-138.

8

See American Foreign Policy: Current Documents, 1957, pp. 426-518.

9 See post, doc. 142.

10 See post, doc. 138.

11 Department of State press release No. 163; the Department of State Bulletin, May 2, 1960, pp. 709–713.

129. CANADIAN-UNITED STATES CONSULTATION “ON A WIDE RANGE OF SUBJECTS OF BOTH AN INTERNATIONAL AND BILATERAL NATURE": Joint Communiqué Issued at Washington by the President of the United States (Eisenhower) and the Prime Minister of Canada (Diefenbaker), June 4, 1960 12

12

The Prime Minister of Canada, the Right Honorable John G. Diefenbaker, and the President of the United States have consulted on a wide range of subjects of both an international and bilateral nature. The Canadian Ambassador at Washington [A. D. P. Heeney] and the Secretary to the Canadian Cabinet [R. B. Bryce] assisted in the discussions, together with the United States Secretary of State and the United States Ambassador at Ottawa [Livingston T. Merchant]. The Prime Minister and the President were in agreement on measures which should be taken to maintain the security of the free world. They reaffirmed their determination to continue to work for peace with justice. Particular attention was paid to the importance of achieving, with effective international control, an end to nuclear testing and progress toward general disarmament.

The Prime Minister and the President reviewed the course of relations between their countries during recent years and noted with pleasure the extent to which the problems arising in such relations have yielded to the process of friendly and continuing consultation. They considered that satisfactory means of carrying on such consultation have been established in personal exchanges as well as by regular diplomatic arrangements and the various joint committees that have been created. They expressed their belief that there has been established between the two countries a model for the relationship between neighbors.

130. THIRD MEETING OF THE CANADA-UNITED STATES MINISTERIAL COMMITTEE ON JOINT DEFENSE, MONTEBELLO, QUEBEC, JULY 12-13, 1960: Joint Communiqué Issued July 16, 1960 13

The third meeting of the Canada-United States Ministerial Committee on Joint Defense was held at Montebello, Quebec, on July 12 and 13, 1960.14

The United States was represented at the meeting by the Honorable Robert W. Anderson, Secretary of the Treasury, the Honorable Thomas S. Gates, Jr., Secretary of Defense, and the Honorable

"White House press release dated June 4, 1960 (text ibid., June 20, 1960, pp. 995-996).

"Department of State press release No. 398 (text ibid., Aug. 1, 1960, p. 172). "For the text of the communiqué issued following the Committee's second meeting, Nov. 8-9, 1959, see American Foreign Policy: Current Documents, 1959, pp. 505-506.