355 Evatt to Dixon

Cablegram PW140 CANBERRA, 24 December 1943

SECRET

Your 1386 of 3rd December. [1] There is no option but to accept decision of Hull. At same time we felt impelled to place on record our views and understandings on the whole question of Australian- United States trade negotiations.

This has been done in the following terms, communicated as an aide-memoire to the American Minister at Canberra this afternoon.

Begins:-

1. I have noted the decision of Mr. Hull, conveyed to me through the Australian Minister at Washington, that the United States Government could not sanction the conclusion of the proposed Trade Agreement between United States and Australia.

2. Knowing as I do the keen personal interest Mr. Hull has long taken in the Trade Programme of the United States Department of State, I fully appreciate that Mr. Hull has come to this decision with regret.

3. As you know, negotiations for a trade agreement between our respective Governments have been protracted. The first series of conversations was initiated by the Australian Government in 1929.

These continued into the Gullett-Moffatt negotiations, which unfortunately proved abortive. [2] You are also well aware of the 1937-38 multilateral conversations, when the Australian Government assisted, at considerable sacrifice to its own interest, in the making of agreements between the United States Government and the Government of Canada, and between the United States Government and the Government of the United Kingdom.

4. It was not only our understanding, but a specific condition of our concurrence, that at a later date all three countries concerned would assist Australia in every possible way in the making of an agreement with the United States of America.

5. The recent series of discussions commenced in 1941 at the suggestion of the United States Secretary of State. It was our understanding at that time that the State Department was eager to achieve an agreement as a practical demonstration of the important possibilities of the Trade Programme. We responded immediately and in July, 1941, sent a delegation to America to enter into discussions. These long continued discussions will now have to be terminated.

6. We had appreciated that owing to local considerations of importance, the negotiations would have to be completed at the latest by January, 1944. It was to avoid just the complications due to local American politics-which Mr. Hull has given as the reason for not continuing negotiations-that we had instructed our representatives to pursue the matter actively. Further, we were led to believe that the offers and concessions proposed were satisfactory in principle. Therefore we looked forward to making an agreement with the United States in the near future.

7. Further, in common with the United States, we have regarded such an agreement as being one practical means of implementing Article VII of the Mutual Aid Agreement. We believe that the United States shared our opinion that bilateral negotiations between nations on trade matters which contributed to the elimination of discrimination and to an improved plan of international trade would be an effective illustration of the principles of the Atlantic Charter.

8. For these reasons we have not been able to understand the attitude recently adopted by the United Kingdom and United States officials discussing Article VII in Washington, that it would not be opportune for these bilateral discussions to be continued.

Naturally, we hoped and even expected that in view of paragraph 4 the State Department would support us in our view. It was for that reason that I instructed the Australian Minister at Washington to discuss the matter with Mr. Hull, and to invite the United States Government to complete negotiations for an agreement. [3]

9. I should be glad if you would convey my regrets to Mr. Hull that he is not free to complete negotiations and sanction an agreement. At the same time I wish to place on record the fact that the Australian Government had actively pursued these negotiations to the very end and regrets that, for domestic reasons, the United States Government is not in a position to enter into a trade agreement with the Commonwealth of Australia.

1 Document 342.

2 These negotiations took place in 1936 between Sir Henry Gullett (then Minister without portfolio directing negotiations for trade treaties) and J. Pierrepont Moffatt (then U.S. Consul-General in Australia). After they had failed the Commonwealth Govt introduced a 'trade diversion policy' on 22 May 1936 directed against U.S.

imports and the U.S. Govt responded on 1 August 1936 by withdrawing 'most favoured nation' status from Australia.

3 See Document 289.

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