252 Commonwealth Government to Attlee

Cablegram 199 CANBERRA, 4 August 1943

SECRET

Your D.467. [1]

1. We warmly welcome proposal to approach United States Government with view to obtaining broad U.S.-U.K. agreement on orderly agenda for the discussion of Article VII.

2. We have always regarded formulation of considered programme for Article VII discussions as a necessity.

3. We agree that the subjects listed in your proposed approach to the United States Government should be included in the agenda for the discussions. But we feel also that the means of working towards the general objectives of maintenance of production and full employment to which you refer in paragraph 4 of your D.467 should be placed in the forefront of discussions. We believe that discussions of means to achieve these objectives should seek agreement about domestic policy in addition to agreement on the purposes and mode of operation of international machinery. In our view, the discussions that have already taken place on various aspects of international policy emphasise that the achievement of the objectives for which international machinery is designed will depend very greatly on the extent to which domestic policy is directed towards similar objectives. Prior agreement to maintain a high level of employment will, we feel, hasten the agreement on international arrangements.

4. We appreciate points made in paragraph 6 of your telegram [2] and place special emphasis on the view that care must be taken to leave room for the continuation of the bilateral trade discussions in Washington should this prove desirable.

5. We would be glad to be kept in closest possible touch with all developments. [3]

1 Dispatched 29 July. On file AA:A989, 43/735/55/1, i. It advised that the U.K. Govt had decided not to begin an approach to the U.S. Govt on commercial policy by delivering the aide-memoire referred to in Document 241, but instead to suggest a broader approach covering all aspects of Article VII of the Lend-Lease Agreement. To this end it was proposed that a strong delegation of U.K. officials should go to the United States not later than the middle of September to take part in informal and exploratory talks on post-war commercial policy, monetary policy, international investment and the regulation of primary products. The primary object of the talks would be the drawing up of an orderly agenda for the discussion of Article VII.

2 Paragraph 6 acknowledged 'that in the case of certain Dominions negotiation of bilateral agreements with the United States under the limited powers of the Trade Agreements Act might offer substantial practical advantages even though on a longer view much more comprehensive arrangements will be needed', but stressed that it was 'of the utmost importance to bring home to United States Government circles at this juncture that a programme of bilateral agreements will fall far short of the necessities of the case, if real progress is to be made under Article 7 . . .' 3 In acknowledging this cablegram on 31 August Attlee said: 'We appreciate importance of considering the positive aspects of Article 7 and have taken note of your views on this point and also on the desirability of leaving room for the continuation of bilateral trade discussions in Washington should these prove desirable.' See cablegram 244 on the file cited in note 1.

[AA:A989, 43/735/55/1, i]