236 Department of External Affairs to Australian Delegation, Economic and Social Council

Cablegram 87, CANBERRA, 3 August 1949, 8.15 p.m.

MOST IMMEDIATE CONFIDENTIAL

Your 114.

1. Our view is that Council should adopt resolution noting danger of international spread of fall in employment, production and demand already evident in some countries, including consequent intensification of balance-of-payments difficulties. In view of the importance of prompt action to check trend at earliest possible stage, Council should recommend that question be discussed by General Assembly at its next session.

2. We do not think that any useful purpose would be served by asking Economic and Employment Commission to present concrete suggestions on timing and co-ordination of anti-cyclical measures at next session of Council. Commission has consistently failed to produce concrete proposals for Council, and, in any case, it is not due to meet until April next year, which involves excessive delay.

3. Accordingly we think following most effective action Council could take at this stage:

(a) Direct Secretariat to prepare up to date analysis of present world economic situation concentrating particularly on critical factors from international point of view and drawing attention to international machinery and agreements already in existence which are designed to promote concerted action to maintain full employment and counter international spread of recession.

(b) Appoint a representative committee of the Council to consider above report before Assembly meets and draw up specific proposals for concerted action to be considered by Assembly or alternatively if not practicable, ask Secretary General to appoint group of Consultants to carry out task as matter of urgency.

(c) Adopt Resolution recommending that Assembly consider above report and proposals.

4. We suggest you get approval of above proposal, particularly (b) in discussion with other delegations with view to either amending original French resolution or introducing freshly along these lines. French support should be forthcoming. Australia should, if possible, join with France in a broad resolution.

5. Obligations to maintain full employment under Article 56 in Charter should be stressed. Action we propose is in accordance with this Article and in addition, we have in mind setting on foot, under sponsorship of E.C.O.S.O.C., international action along the lines envisaged in Chapter 11 of the Havana Charter which was outcome of exhaustive international discussions. Since the I.T.O. is not yet in operation an additional responsibility falls upon E.C.O.S.O.C. Members of G.A.T.T. are committed to 'observe to the fullest extent of their executive authority the general principles of Chapters I to VI' of the Havana Charter 'pending their acceptance of it in accordance with their constitutional procedures'. Resolution for E.C.O.S.O.C. should be drafted with this context in view.

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