411 Australian Government to Commonwealth Relations Office

Cablegram 74, CANBERRA, 20 March 1948, 12.40 p.m.

SECRET

European Customs Union and Preferences.

Our Delegation at the Havana World Trade Conference recently took up with your Delegation the question of an agreed minute covering the repercussions of a possible European Customs Union on preference in the United Kingdom market. They now report that your Government advised the United Kingdom Delegation in the following terms:

'We have throughout the Customs Union discussions made it crystal clear both to the European countries involved and to the Commonwealth countries that a settlement of the preference problem on lines satisfactory to all countries concerned was a sine qua non of our even considering entering a Customs Union. We should not have thought that any further assurance was necessary.' 2. The Australian Government feels reassured by this categorical statement and would appreciate direct confirmation in similar terms. You will understand our position as the text of Article 42 (b)[1] which seems likely to be adopted at Havana gives us considerable cause for concern and will closely affect our decision as to whether we can accept the I.T.O. Charter. In view of the likely political reactions we cannot afford to be complaisant about this outcome and need to have on record some definite assurance of this kind suggested. This would, of course, obviate the necessity for any further action at Havana regarding an exchange of notes or agreed minutes.[2]

[1] Article 42 was being redrafted to cover the contingency of a European customs union being formed.

[2] In Cablegram 90, dispatched 22 March 1948, the UK government confirmed that the advice as quoted was correct.

[AA : A1838, 703/2A]