107 Coombs to Cabinet Sub-Committee on Trade and Employment Conference

Cablegram ITO102 GENEVA, 31 May 1947, 2.25 p.m.

SECRET

After my return to Geneva on Wednesday morning, I saw Wilcox who is leading the U.S.A. Delegation in the absence of Clayton, and informed him that there was no prospect of the Government being able to obtain approval in Australia for Trade Agreements involving modifications of preferences and for I.T.O. Charter which would involve sacrificing right to extend preferences generally and would impose other obligations affecting our freedom of commercial policy unless we have substantial evidence of good faith on the part of the U.S.A. This could be provided only by substantial reductions of import duties on wool and nothing less than-that would be regarded as satisfactory.

Secondly, I referred to the Government's offer to discuss with United States representatives an international agreement on wool or some arrangement, short of an international agreement, between the Commodity Credit Corporation and the Joint Organisation involving co-operation in disposal of wool stocks. [1] I have discussed this with McCarthy and Murphy [2] who both consider that conclusion of such an arrangement might assist United States if it wishes to meet our request for a reduction of wool duty. Early action would be necessary and we will advise further on this when we have some reaction from U.S.A. and we have discussed question further with Murphy.

I also informed Wilcox that I intended during the afternoon at discussions of the Preparatory Committee make some reference to the need for evidence of good faith in carrying out obligations involved in acceptance of Charter.

Wilcox informed me that he expected the wool legislation to be passed with provision for an import fee probably in the form of the Hope amendment. [3] He was, however, optimistic of prospects for a veto and seemed satisfied that this would not be over- ridden. His explanation of this was that the President would be prepared to enter the next Presidential elections on the basis of his intrinsic economic policy and would not regret putting the Opposition in a position of resisting it, and he also believed that present numbers supporting Bill would not be maintained in vote to override the veto as he considered that many of those who voted for the legislation would be prepared accept a presidential veto which would relieve them from the responsibility of voting against legislation.

Until this proposed legislation is disposed of, I think it unlikely that there will be any consideration of the existing tariff rate.

[matter omitted]

1 The Commodity Credit Corporation was responsible for the orderly disposal of US wool stocks. Similarly the United Kingdom - Dominion Wool Disposals Ltd (Joint Organisation) was responsible for stocks held on behalf of the United Kingdom, Australia, New Zealand and South Africa.

2 J.F. Murphy, Commonwealth Wool Adviser and Economic Adviser to the Minister for Commerce and Agriculture.

3 The amendment to the Robertson Bill. See Document 98, note 5.

[AA : A1068, ER47/18/1]