350 Shaw to Hodgson

Memorandum 6/43 WELLINGTON, 15 December 1943

With further reference to the forthcoming talks between Australia and New Zealand [1], the following points which emerged during a conversation with Mr. A. D. McIntosh, the Secretary for External Affairs, may be of interest.

While the officially announced members of the New Zealand Delegation would be the Prime Minister, Mr. Fraser, the Minister for Mines, Mr. Webb, and the Minister for Defence, Mr. Jones, it was possible that another Minister might also attend. The Prime Minister would be accompanied most likely by his wife on account of his health and each of the Ministers would bring a private secretary. As officials, McIntosh would attend together with Patrick, who is the official concerned in External Affairs with Pacific Islands. Possible additions to the official party would be Shanahan of External Affairs, and the Secretary of the Treasury, Ashwin, but these have not been selected yet. It appears likely that the New Zealand party will fly from Auckland arriving in Sydney on the afternoon of 14th January.

McIntosh referred to our draft agenda paper [2] which he repeated had not yet been considered by Mr. Fraser. The main comment which he, McIntosh, made was on the absence of questions relating to trade and commerce. He remarked that such topics as the application of Article 7 of the Mutual Aid Agreement were of vital importance to New Zealand. If there were a reduction in Imperial preference as a result of Article 7, New Zealand's trade in primary produce, which is so important to this country, might be greatly affected. Australia, he remarked, was not so dependent on her exports of primary produce now that her secondary industries had developed. McIntosh also pointed out that Pacific Island trade is a small item to Australia and a very small item to New Zealand, whereas the British market for primary products is a most important factor in New Zealand's economic life. He therefore felt that discussions on Pacific Islands supply were of relatively minor importance compared with those larger issues.

Another possible topic of discussion which he raised was the working of our reciprocal Lend Lease Agreements with the United States and the wish of the Americans to extend to a wider range of primary products the goods which Australia and New Zealand are supplying. He mentioned, for example, that the inclusion of tallow as reciprocal aid was a considerable burden and I remarked that Australia had recently declined to agree to further additions to the list of raw materials supplied as reciprocal aid to the United States.

These suggestions concerning commercial policy were raised quite informally by McIntosh and he emphasised that the Prime Minister had not had the opportunity of making any suggestions. They are interesting, however, taken in conjunction with Mr. Nash's expressed wish to discuss with Mr. Chifley questions affecting our two countries' balances of payments in London after the war.

McIntosh enquired also about the meaning of Item 1 of the draft agenda and the term 'In relation to discussions in London and Washington'. He seemed to think that this limited the whole scope of the proposed talks to questions which were likely to be raised at London or Washington, but I said that there was no wish on our part to limit the topics for discussion. McIntosh expressed the view that Mr. Fraser would wish the subjects of discussion to be left in as wide terms as possible.

McIntosh remarked that the Conference would be of value even if it merely clarified the views of our two Governments. I said, however, that on our part we expected some definite conclusions and agreements on policy to be reached as a result of the talks.

PATRICK SHAW

1 See Documents 305 and 346.

2 See Attachment to Document 346.

[AA:A989, 43/735/168]