169 Plimsoll to Department of External Affairs

Cablegram 437 WASHINGTON, 4 April 1946, 10.30 p.m.

SECRET

F.E.C. 61 Inter-Allied Trade Board.

1. Reference your 517. [1] Have discussed your points with British Commonwealth delegations.

2. Clause 3 of I.A.T.B. terms of reference [2] is intended to cover your point 2(1) but consider redrafting may be necessary to make this clear. Policy on prices, sources of supply, destination of exports, currencies accepted in payment and level of imports and exports will be decided by F.E.C. and not the Board (see paragraph 2 of my F.E.C.52). Board advises on translation of policy into detail.

3. It is not considered practicable or advisable when the Board is not unanimous to refer the matter to F.E.C. as the Commission is not fitted to decide such matters and in any case great delay would result. But wherever a matter of principle is involved the matter can be referred to F.E.C. for decision. I suggested that voting procedure for the Board might be stated in the terms of reference but other Commonwealth delegations thought it better not to do so as it might raise question of veto power.

4. The United States Government is willing to internationalise S.C.A.P. Export-Import Division which would remain responsible to S.C.A.P. The United Kingdom and Australia have both made it clear at F.E.C. meetings that they will insist on right to have representatives in Japan (apart from S.C.A.P.) to examine goods offered for export by Japan.

5. Commonwealth representatives agreed that language in term of reference should be amended to cover point in your paragraph 1 probably to make decisions binding on United States Government.

New Zealand Government has doubts whether an international body should advise one government alone and delegates agreed to consider desirability of making Board advisory to S.C.A.P. instead of United States Government. [3]

1 Document 161.

2 Clause 3 stated that the advisory functions of the Board were to be carried out 'within the framework of the Potsdam Declaration and policies established in accordance with the Terms of Reference of the F.E.C.' 3 The External Affairs Dept replied on 9 April that, in view of the proposed clarification of the relationship between the I.A.T.B. and the F.E.C., it was in general agreement with the suggested terms of referance.

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