391 Commonwealth Government to Addison

Cablegram 408 CANBERRA, 15 November 1945

MOST IMMEDIATE SECRET

Your 459-Commercial Policy. [1]

1. We have given careful consideration to your telegrams 459 and 460 [2] in reply to our telegram 394 [3] in which we expressed the concern we have felt about the proposed document and your contemplated association with it.

2. Your replies have cleared up some points but they have not removed our major objections to the preference formula, notwithstanding the commentary, or our objections to some of the other proposals in the document which have been agreed to by your negotiators and the Americans.

3. In these circumstances and for the reasons already given in our previous telegrams we regret that we are unable to agree to your requests that we should acquiesce in the position that has now been reached and that there should be a broad understanding between us that the line set out in the formula for dealing with tariffs and preferences will not be called in question. We desire complete freedom of action in relation to the formula and all other proposals in the document. Indeed we feel that all countries should be in a position to approach both the negotiations and the conferences with full freedom to discuss and finally resolve all sections of the proposals on mutually advantageous lines.

4. We note from paragraph 5 that you feel you cannot withhold your support to the proposals and that any further requests for amendment will lead to a break in the negotiations. We assume therefore that the document will be published next Sunday.

5. We will be prepared to discuss matters further at the proposed meeting of Commonwealth countries to be held prior to the March Conference.

6. We note from paragraph 5 of the commentary that 'it is recognised that some preferences are of particular importance to the economy in certain parts of the world just as some tariffs are important in others'. In our case some of our preferences and tariffs for key industries are vital to our security and development, bearing in mind our isolated position in the Pacific.

7. The document when published will face us with political and economic embarrassments probably to a greater degree than any other country and as we have not been a party to its preparation, we shall have to define our position in relation to it. It will be essential to explain publicly that we have not participated in the discussions that we are not in any way committed to the proposals and that we will join the international discussions with complete freedom to raise objections and to submit alternatives.

We are replying separately to your 462 [4] in which meat is mentioned.

1 Document 388.

2 Dispatched 12 November. On file AA : A1066, A45/2/5/4.

3 Document 374.

4 Dispatched 14 November. On the file cited in note 2. It dealt with quotas and state trading.

[AA : A1066, ER45/1/5]