58 Evatt to Fraser

Cablegram 34 CANBERRA, 28 February 1944

IMMEDIATE PERSONAL FROM EVATT TO FRASER SECRET

1. We have for many months been negotiating with Canada a Mutual Aid Agreement. The negotiations have been protracted and at one stage nearly broke down because the Canadian Government insisted upon the inclusion of an article which read:

'The Government of Canada and . . . reaffirm their desire to promote mutually advantageous economic relations between their countries and throughout the world. They declare that their guiding purposes include the adoption of measures designed to promote employment, the production and consumption of goods and the expansion of international commerce by the reduction of tariffs and other trade barriers with the object of contributing to the attainment of all the economic objectives set forth in the Declaration of 14th August, 1941, known as the Atlantic Charter.'

2. As a last minute attempt to reach agreement I said we would accept this clause provided the 'full employment' interpretation of Article VII of the U.K.-U.S.A. Agreement was either accepted by Canada or suitably recorded in notes accompanying the Agreement.

[1]

3. The Canadian Government thereupon suggested that Article X be amended by substituting for the words 'the expansion of international commerce by the reduction of tariffs and other trade barriers', the words 'the expansion of commerce through appropriate international agreements on commercial policy'. [2]

4. We have agreed to this because it not only meets our case but will help us in having accepted our interpretation of Article VII of the U.K.-U.S.A. Agreement.

5. I wish to make a statement in the House during this week announcing signature of the Canadian Agreement and I wish also to take this opportunity to clear up once and for all any doubts about Article VII of the United Kingdom - United States Mutual Aid Agreement on which the above article of the Canadian Agreement is based.

6. In the course of this statement I wish to set out the principles upon which we agreed in our exchange of notes [3] and I would regard it as a great advantage for our two countries to be able to refer to these principles as the 'Australian - New Zealand interpretation'. I should be grateful to receive your permission to make a statement along these lines and suggest that you make a comment on my statement or a statement simultaneously, thereby associating our two countries with this particular interpretation at the outset.

1 See Document 36.

2 See Document 46.

3 Documents 28 and 29.

[AA:A989, 43/125/5/6/1, i]