Customs Union Study Group met 2nd attended by fourteen member countries with seven observers namely Norway, Sweden and Dominions including Pakistan but India not yet represented.
2. Report of Tariff Committee was presented dealing with problems involved in establishment of common tariff and stages by which this could be approached. First step would be preparation of common tariff nomenclature by special committee experts which would take six months. Second step transposition of each country's present tariff into framework of this standard nomenclature. Third step preparation of specimen scale of ad valorem duties on certain goods as basis for further discussion. Group will meet this [afternoon] and consider action to be taken on Committee's report.
3. From discussion with United Kingdom Delegation we learned present Havana discussions on free trade area may be reflected here by proposals that Study Group should not confine itself to technical issues involved in common tariff but should proceed to examine simultaneously problems that would arise from establishment of free trade area in Western Europe. This is clearly more fundamental question if Customs Union proposal is to be taken seriously.
4. United Kingdom Delegation assured us United Kingdom position has not altered. While European Customs Union might be politically attractive to United Kingdom as part of the general scheme of Western Union no commitment would be made without decision at highest political level after consultation with Dominions.