95 Cabinet Submission by Chifley

Agendum 1019D (extracts) [CANBERRA], 14 April 1947

CONFIDENTIAL

TRADE AND EMPLOYMENT CONFERENCE : FIRST PROGRESS REPORT

I. INTRODUCTION

1. The following report reviews the work which has been done both in Australia and overseas since the departure of the Australian Delegation to the Trade and Employment Conference in London and Geneva.

[matter omitted]

III. EXCHANGE OF TARIFF REQUESTS WITH OTHER COUNTRIES

5. Detailed lists of requests for concessions in the Australian tariff have so far been received from the United States, United Kingdom, France, Norway, India, South Africa, Czechoslovakia, China and Chile. No requests have yet been received from Brazil, the Benelux Customs Union, Cuba or Lebanon. Both Canada and New Zealand have stated that they do not propose to make requests upon Australia.

6. When received, the requests are investigated by the Industries and Tariff Revision Branch and by the Trade Treaties Branch of the Department of Trade and Customs. Each tariff item is considered in detail, all relevant information is collated (including the views expressed in reports of the Tariff Board) and where necessary special industry investigations are made. After inter-Departmental examination, the requests are considered by the Cabinet Sub- Committee on Trade and Employment which determines the instructions to be given to the Delegation.

7. It must be emphasised that the instructions given by the Cabinet Sub-Committee in no way commit the Government to make any tariff change. They merely provide the Delegation with a negotiating brief to use as a guide to their discussions with other countries on a non-committal basis. Before Australia is in any way committed, it will be necessary for the Government to consider the outcome of the negotiations and to decide whether or not the tariff concessions which we are asked to make are fully balanced by the concessions which we will receive from other countries.

8. Up to the present time all of the U.S. requests have been dealt with in this way together with most of the requests made by France, Norway, Chile and some of the requests by the U.K., South Africa and India.

9. In considering these requests, the Sub-Committee has had in mind the following principles:-

(a) Account has been taken of the reciprocal concessions which we may obtain as a result both of our direct requests and of the operation of the Most-Favoured-Nation principle-particularly the concessions we hope for in the U.S.A. tariff. The offer of concessions by our Delegation within the limits authorised for negotiation will of course depend on the responses which we receive to our requests on other countries.

(b) Concessional offers authorised for negotiation have been relatively generous where revenue rather than protective considerations are involved-e.g. elimination of primage [1], reduction or elimination of duties on goods of which there is not and is not likely to be any Australian production.

(c) In the case of protective items, negotiation of concessions has been authorised where it is believed that the industry can operate satisfactorily with a lower tariff either because of increased technical efficiency since the duties were last fixed or because the balance of Australian and overseas costs has moved so substantially in our favour as to justify some degree of tariff revision.

(d) In an important number of cases the Delegation has been advised that rates of duty cannot be bound and that we must retain the right to increase them for protective purposes at a later stage and after report by the Tariff Board.

10. Although in cases of doubt the Sub-Committee has adopted a conservative attitude, it fully realises that under a policy of full employment the pressure of social and private needs on our labour and other resources will continue to be heavy, and that therefore in the interests of our national development we should pursue a more selective policy towards the sheltering of high-cost industries behind prohibitive or near-prohibitive duties. The Sub- Committee also realises that the course of negotiations may reveal some cases in which the present instructions to the Delegation will need to be revised if we are to obtain worthwhile concessions from other countries. It will be particularly important to ensure that the maintenance of unnecessarily high protection for Australian manufactures does not prevent the negotiation of tariff reductions by other countries which would open up export opportunities for the Australian manufacturing industries themselves, many of which have considerable export prospects if the conditions of international trade are satisfactory.

11. Lists of requests for tariff concessions have already been presented by Australia to the Governments of the United States, France, Norway, Belgium, Czechoslovakia, South Africa and Malta.

Further request lists will be ready for presentation to India, Ceylon and Netherlands in the next week or so and the balance will follow shortly thereafter. It is not proposed at this stage to lodge requests on Canada and New Zealand, while the position with respect to requests on the United Kingdom hinges on the question of a basis for agreement and has still to be clarified.

The Australian requests have been prepared following research into past trading relations, statistical analyses and industry consultations. In addition, the lists of requests exchanged amongst countries other than Australia are being closely examined in order to gauge how far Australia may benefit under the Most- Favoured-Nation principle.

IV. CONCLUSION

12. The position of the negotiations is still completely fluid.

The British Commonwealth talks in London provided a useful opportunity for the exchange of views and revealed a welcome measure of agreement on many topics. The bigger issues will emerge only gradually at the Geneva Conference-particularly when the initial responses of U.S.A. and other countries to our requests are made known, and the negotiations reveal the bargaining attitude of the various parties on particular items. In the meantime our best course is to continue participation on an exploratory basis, avoiding all commitments, implied or expressed, which might tic our hands in the course of the negotiations or in making a final decision.

V. SUBMISSION

Submitted for the information of Cabinet.

J.B. CHIFLEY for the Cabinet Sub-Committee on Trade and Employment

1 A duty levied on all imports whether or not any other customs duty was payable.

[AA : A2700, VOL. 22]