Circular cablegram D235 LONDON, 22 April 1943, 10.30 p.m.
My immediately preceding telegram.  Following is text of draft
aide memoire, begins-
As has been stated on many occasions His Majesty's Government
favours a commercial policy designed to promote general economic
expansion and joint action directed towards the removal of the
obstacles to international trade. While during the transitional
period immediately after the war when we are seeking to restore
our balance of trade we may have to retain some special measures
of control, we hope that we and other countries will be able to
emerge from this stage without undue delay. It is with this in
mind and as a contribution to the conversations to which we are
committed under Article VII of the Mutual Aid Agreement that His
Majesty's Government submits for consideration the following
points which form a practical approach to this problem and which
might prove suitable for discussion among the United Nations.
(I) An international commercial policy capable of helping towards
the solution of the postwar economic and political problems would
have to be accompanied by some form of multilateral financial
clearing and the adopting of a system which allows and encourages
an expansive world economy.
(II) The policy should also be based on the assumption of a
multilateral commercial agreement embracing as many countries as
possible. As Great Britain is compelled to rely on imports for a
large proportion of its food and raw material some modus for
exporting an equivalent amount is absolutely essential. Mere
bilateral agreements, however advantageous, cannot meet the
situation whereas a multilateral agreement laying down certain
principles for the freer exchange of commodities can be of great
(III) The United Kingdom, both by tradition and experience,
regards an increased freedom of trade as particularly in her
interest. We shall join in any movement to secure it and when it
comes down to practice, we should have every motive to encourage
it both from our own point of view and on account of the general
international benefit. Our sympathy is entirely with those who are
seeking to remove barriers to trade. Any qualifications we may
have to make will be due to the special difficulties of the
immediate postwar period and the present uncertainty as to what
will in fact lie within our power and that of other countries.
(IV) We would accept a moderate ceiling for tariffs for
incorporation in a multilateral agreement.
(V) We should be prepared to make all our agreements, including
particularly quantitative restriction of imports, on a basis of
mutual nondiscrimination. Preferences which we do not regard as
discriminatory in a strict sense of the word are dealt with below.
(VI) Quite apart from our own position, a general plan should
leave room for special arrangements within political and
geographical groups since these are likely to be asked for and
could be properly conceded in many cases. As part of a
comprehensive scheme for the betterment of the trade of the world
as a whole we should be prepared to play our full part in any
general scheme for reducing preferences.
(VII) We consider that the quantitative regulation of imports
should not ordinarily be employed for the primary purpose of
protecting home industries but rather regarded as a mechanism
appropriate and useful for special purposes, including among
others the safeguarding of a country's balance of payments, and
for implementing approved international commodity agreements and
on security grounds we should be prepared to agree from the outset
that such regulations should be on a nondiscriminatory basis. In
so far as quantitative regulation is used for safeguarding a
country's balance of payments we suggest that common agreement
might be reached concerning a more or less automatic and objective
test of the conditions under which such action should be
permissible. For example it might be found that the statistics
resulting from the creation of an international monetary authority
could be used for this purpose.
(VIII) We should be prepared to agree to measures designed to
prevent export subsidies.
(IX) Room should be left for state trading but it would be
desirable that it should be conducted in accordance with a code to
(X) We believe that these points could best be covered by the
formulation of a general commercial code to which all countries
would be invited to subscribe.