Your telegram of 25th September No. 312  has received very careful consideration.
The United Kingdom Government fully realise that the establishment in Australia during the war of new industries lacking tariff protection raises difficult problems for Australia and they would not wish to insist on an unduly rigid interpretation of rights under the Ottawa Agreement where such an interpretation might in the present circumstances unwarrantably embarrass the plans of the Commonwealth Government for an orderly transition to a well- balanced peacetime economy.
2. The Commonwealth Government for their part will, we feel sure, equally realise the vital importance, in the interests of our two countries, of the earliest possible restoration and expansion of the United Kingdom's export trade which alone can maintain the position of the United Kingdom as a great import market. The United Kingdom Government recognise that the arrangement suggested in paragraph 8 of your telegram is intended for temporary application only but they would be bound to feel great difficulty in the present circumstances in accepting an arrangement expressed in general terms, since this in effect would commit them to waive for an unspecified period, and with no indication of the range of industries in question, or degree and form of protections which are contemplated, the rights secured by the Ottawa Agreement in regard to the imposition of protective duties.
3. While, therefore, the United Kingdom Government are anxious to go as far as possible to meet the Commonwealth Government in this matter, they feel that the only satisfactory approach to the problem would lie through the consideration between us of each individual case. They would suggest, therefore, that as and when the question of giving emergency protection to any particular Australian industry arises, the Commonwealth Government should indicate to the United Kingdom Government the precise degree and form of protection envisaged. The United Kingdom Government would then as a matter of urgency, consider sympathetically in consultation with the appropriate United Kingdom industry, whether they could, in the particular case in question, forego temporarily their rights under the relevant articles of the Ottawa Agreement.
4. In view of the observations of the Tariff Board quoted in your telegram under reference we should hope that, in the majority of cases, the emergency protection proposed would be such that we could agree for the present to forego full Tariff Board enquiries.
Our understanding would be that in such cases the question would be reconsidered after a period to be agreed between us, with a view to full Tariff Board enquiries being instituted.