119 Dedman to Chifley

Cablegram ITO210 GENEVA, 5 July 1947, 10.10 p.m.

IMMEDIATE SECRET

Principal matters arising from discussions during the week have been cabled separately. These cables include a review of tariff negotiations so that this may be considered by Cabinet at its meeting on Monday.

Sugar. In I.T.O.188 we reviewed effects of general agreement and charter upon sugar. Question of sugar preferences will not arise at this series of meetings. Amendments which are to be made in draft charter will adequately cover our embargo on imports and maintenance of a home consumption price. International Sugar Agreement can be brought under chapter VII of charter.

General Agreement. Have had some further discussions about the form of general agreement on tariffs. There is an appreciation of difficulties involved in bringing the one multilateral agreement into force. Further consideration is being given to alternative of bilateral agreements. An examination of the replies made by other countries to questionnaire referred to in our I.T.O.186 shows that about nine countries will not ratify the general agreement before March or June next year. Some of the countries have stated that they would be embarrassed in their parliaments or with other countries in submitting for ratification an agreement containing much of the charter which itself would be subject to further discussion at World Conference.

In a discussion with Tariff Negotiation Steering Committee they indicated that their view is that the signing of the general agreement in Geneva would involve commitments to following extent:

(a) In establishing text of agreement and the schedules of tariff, and, (b) In committing Government to recommend to Parliament acceptance of agreement.

The signature of course, would not in any way bind Parliament.

This has not been discussed at any length and it may be that other countries will seek to make their signature at Geneva conditional upon similar signature by other countries to the charter after the World Conference. This would enable both sets of obligations and benefits to be accepted together and subsequently to be submitted jointly to Parliament.

If the view expressed in (b) above is confirmed, however, it would mean that arrangements would have to be made for Cabinet to consider outcome of these tariff negotiations during interval after completion of negotiations here and formal signing of agreement in Geneva.

We are examining this in detail prior to more formal discussions and will advise further.

Preferential Negotiations. We are to consider at a Commonwealth meeting next week method by which reductions in preferential rates of duty agreed at Geneva in negotiations solely between British countries shall be shown. United Kingdom is in favour of agreements separate from general agreement concluded between other members [of] Preparatory Committee. Will advise further on this after discussion.

Protective Measures. As reported in our I.T.O.193 there has been delay in charter discussions as a result of the desire of a number of countries to retain freedom to use protective measures such as quantitative restrictions, internal taxes and mixing [1] requirements. Their argument is that these should be placed on the same basis in charter as tariffs and subsidies. There is, as yet, no solution of this difficulty.

New Zealand Amendment. New Zealand position is linked with discussion referred to in preceding paragraph. We are continuing our private discussions with New Zealand delegation to find some amendment to Article 26 [2] that would meet their need to continue quantitative restrictions. Shall telegraph separately about this later but it seems that unless the New Zealand Government adopts an extreme attitude an amendment could be prepared which would adequately meet her position and which would not be opposed by other countries.

1 i.e. the mixing together of imported and domestic products in specified proportions with a view to protecting the domestic product.

2 Article 26 concerned restrictions to safeguard balance of payments.

[AA : A1068, ER47/1/28, ii]