123 Beasley to Evatt

Cablegram 359 [1] [PHILADELPHIA], 29 April 1944, 4.51 p.m.

International Labour Office Report 17.

1. Even though we succeed eventually with employment agreements our position in regard to other schemes will not necessarily be secure. We shall be pressed strongly to accept commercial policy proposals on the grounds that we have secured the employment agreement. By implication we would be accepting an approach to international economic collaboration quite inconsistent with, and perhaps on political and technical grounds fatal to, the success of our employment approach.

2. A logical application of full employment to commercial policy is:-

(a) Extension of the Australia - New Zealand idea of exchanging information on industrial development and dovetailing developments [2]; and (b) Examination of requirements of and arrangements for export on credit terms to less developed countries. We do not want, after the war, all countries to turn war production over to the same kind of peace-time goods, as this would lead to relative over- production in particular industries and resultant depressed conditions which would spread. But we do want to have the opportunity to employ usefully our increased industrial potentialities. We do want to claim for small countries the right to develop industries producing light manufactures and obligations on the part of larger economies not to prevent this orderly development. This approach is positive and emphasises the employment of available resources and no restrictions on production which is an implication of tariff reduction approach to commercial policy.

3. The logical organisation to secure increased potentialities and possible markets, is the International Labour Office, as sources of information are the Governments and Chambers of Manufactures.

Workers are also concerned.

4. The advantages of using the I.L.O. are great. Matters of the industrial development would be placed in the hands of representatives of the Governments, Workers and industries of all countries and not in the hands of commercial interests of the few bigger economics who are interested only in finding markets.

5. If such proposals were adopted by the I.L.O. the ground would be cut from under the feet of those who are pressing for commercial organisation for purposes of tariff supervision. Once the I.L.O. had commenced exchange of information on industrial developments and by implication admitted the validity of the claims of small countries it would exercise influence on the field of tariff reform. We would then have a useful platform and a most receptive audience on questions of commercial politics.

6. Please advise me as soon as possible if I may put this proposal to the Committee, on item 1 [3] which is now set up. I believe it may lead to a practical solution to our difficulties and one which would be supported by Labour and Manufactures in Australia and by the large majority here thinking along our lines. Tariff reduction approach to commercial policy would be placed in perspective as being negative. At least we could suggest that tariff discussions be deferred until exchange of information on industrial programmes had taken place and the basic facts on markets known.

7. In any case we should keep in mind the possibility of Australian exports of industrial products on a fairly large scale on terms of credit to under-developed countries. We have not adopted such a policy in the past but we should keep ourselves free to do so in future as part of assurance against the falling off of demand and unemployment in our industries.

8. I have sent these ideas after discussions with several people here and with some appreciation of the thoughts and solutions which we may have to guard against and I hope that they are helpful.

1 Sent through the Legation in Washington.

2 See Document 26, paragraph 35(c).

3 i.e. the conference committee set up to examine item 1 of the agenda, namely, 'the future policy, programme and status of the International Labour Organization'.

[AA:A989, 44/1320/13/3]