342 Dixon to Evatt

Cablegram 1386 WASHINGTON, 3 December 1943, 12.13 a.m.

IMMEDIATE SECRET

Your 1424. [1] My 1363 Trade Treaty. [2]

Hull saw me and McCarthy this afternoon, December 2nd. He had Hawkins present. After I had presented the Australian Government's strong desire to proceed with negotiations, he verified the fact that wool was the most important commodity upon which we hoped for a reduction of duty. He expressed his fear that an interference with American duties upon wool would produce adverse domestic political reactions at the present time. He briefly stated the past history of the use of wool as a focal point in tariff controversy. He referred to the number of 'wool states' and in consequence the number of Senators affected. Whilst he expressed his personal view favouring a more moderate duty, he emphasised the greater importance for matters of world wide concern of avoiding placing weapons in the hands of political opponents. He said that Australia was as much interested as America was in large plans for peace and postwar settlement, all of which were involved in the American domestic political scene. He also expressed the view that to bring forward, in the present circumstances, a trade agreement which would be strongly resisted might jeopardise the whole system of trade agreements which would be to the detriment of both Australia and America.

He said that as things stood, until the political scene cleared, he regretted that he could not sanction the conclusion of a Treaty. He spoke vaguely of the possibility of a change in political conditions in the summer or fall of next year. He said that if there were any alteration in domestic politics presenting more favourable conditions he would gladly reconsider the question. Hawkins said that there was no more ground work which could be usefully done in the meantime, that negotiations had reached such a stage that further discussion would be to bring them to finality.

Hull said that he was sorry that he could not take a view which would enable him to meet the wishes of our Government with which he had the fullest sympathy, but he was sure that we would realise that his decision was influenced by the widest considerations.

It was clear that Hull did not wish to enter into any discussion upon the attitude of the U.K. He did not refer to it himself in the course of his answer and when Hawkins introduced the question he put it on one side, and confined the consideration of the matter wholly to its bearing on the political security of the administration. I saw no reason to doubt that Hull was expressing his real reason for declining to sanction the conclusion of an agreement with us at present. The political situation has been steadily deteriorating for the administration and grave concern is felt over the prospects for the congressional elections and much anxiety about the presidential.

1 Dispatched 26 November. On file AA:A989, 43/735/70/2. It instructed Dixon that notwithstanding the U.K. Govt's disinclination to enter bilateral trade negotiations with the United States he should ask Hull whether the United States was prepared to open trade negotiations with Australia immediately.

2 Dispatched 26 November. On the file cited in note 1. It reported that Dixon had arranged to meet Hull on 25 November, but that the latter had been prevented from keeping the appointment by illness.

[AA:A989, 43/735/70/2]