120 Cabinet Sub-Committee on Trade and Employment Conference to Australian Delegation, Geneva

Cablegram T167 CANBERRA, 9 July 1947, 5.50 p.m.

SECRET

Your I.T.O. 153 concerning stud sheep was discussed by Cabinet Sub-committee at considerable length.

2. The discussion provoked the wider issue of the Government retaining freedom to determine what products should or should not be exported in the light of its own assessment of local needs and its policy regarding the conservation of resources. It was pointed out that embargoes were now maintained by Australia on a number of commodities besides stud sheep, not all because of temporary scarcity and price control, or for reasons which would be covered by the present exceptions to Article 25(1). [1] The prohibition on the export of iron ore from Yampi Sound for instance was an example of government policy which ran quite counter to the present provisions of the Charter. Ministers were most insistent that the Government must retain freedom to impose whatever restrictions on exports it deems necessary from time to time in the light of changing circumstances and its own assessment of the needs of the country.

3. Ministers fully realised that their approach to the question was contrary to certain provisions of the Charter itself but were quite adamant. From the discussion it seems clear that the Government would be most reluctant to accept a Charter which limits its freedom of action in this respect.

4. It was decided that you should be asked to explore means of retaining the right to impose export restrictions on any products, the conservation of which is considered by an exporting member country to be essential.

5. This might be achieved either by a modification of Article 25 paragraph (i) (the full implications of which have only now been realised) or by an elaboration of the exceptions to this paragraph.

6. On the particular question of stud sheep it was recognised that there are two schools of thought, and good arguments both for and against lifting the embargo. At most it was thought that the matter could be reviewed periodically but Ministers were strongly opposed to the lifting of the embargo in present conditions.

1 Article 25(1) read: 'Except as otherwise provided in this Charter, no prohibition or restriction, other than duties, taxes or other charges... shall be imposed ... on the exportation or sale for export, of any product destined for any other Member.' The exceptions covered the early post-war transitional period and included provisions applying to products in short Supply, quotas imposed under inter-governmental commodity agreements, and to the orderly liquidation of surpluses accumulated during the war.

[AA : A1068, ER47/1/29]