Your 1386 of 3rd December. [1] There is no option but to accept
decision of Hull. At same time we felt impelled to place on record
our views and understandings on the whole question of Australian-
United States trade negotiations.

This has been done in the following terms, communicated as an
aide-memoire to the American Minister at Canberra this afternoon.

Begins:-

1. I have noted the decision of Mr. Hull, conveyed to me through
the Australian Minister at Washington, that the United States
Government could not sanction the conclusion of the proposed Trade
Agreement between United States and Australia.

2. Knowing as I do the keen personal interest Mr. Hull has long
taken in the Trade Programme of the United States Department of
State, I fully appreciate that Mr. Hull has come to this decision
with regret.

3. As you know, negotiations for a trade agreement between our
respective Governments have been protracted. The first series of
conversations was initiated by the Australian Government in 1929.

These continued into the Gullett-Moffatt negotiations, which
unfortunately proved abortive. [2] You are also well aware of the
1937-38 multilateral conversations, when the Australian Government
assisted, at considerable sacrifice to its own interest, in the
making of agreements between the United States Government and the
Government of Canada, and between the United States Government and
the Government of the United Kingdom.

4. It was not only our understanding, but a specific condition of
our concurrence, that at a later date all three countries
concerned would assist Australia in every possible way in the
making of an agreement with the United States of America.

5. The recent series of discussions commenced in 1941 at the
suggestion of the United States Secretary of State. It was our
understanding at that time that the State Department was eager to
achieve an agreement as a practical demonstration of the important
possibilities of the Trade Programme. We responded immediately and
in July, 1941, sent a delegation to America to enter into
discussions. These long continued discussions will now have to be
terminated.

6. We had appreciated that owing to local considerations of
importance, the negotiations would have to be completed at the
latest by January, 1944. It was to avoid just the complications
due to local American politics-which Mr. Hull has given as the
reason for not continuing negotiations-that we had instructed our
representatives to pursue the matter actively. Further, we were
led to believe that the offers and concessions proposed were
satisfactory in principle. Therefore we looked forward to making
an agreement with the United States in the near future.

7. Further, in common with the United States, we have regarded
such an agreement as being one practical means of implementing
Article VII of the Mutual Aid Agreement. We believe that the
United States shared our opinion that bilateral negotiations
between nations on trade matters which contributed to the
elimination of discrimination and to an improved plan of
international trade would be an effective illustration of the
principles of the Atlantic Charter.

8. For these reasons we have not been able to understand the
attitude recently adopted by the United Kingdom and United States
officials discussing Article VII in Washington, that it would not
be opportune for these bilateral discussions to be continued.

Naturally, we hoped and even expected that in view of paragraph 4
the State Department would support us in our view. It was for that
reason that I instructed the Australian Minister at Washington to
discuss the matter with Mr. Hull, and to invite the United States
Government to complete negotiations for an agreement. [3]

9. I should be glad if you would convey my regrets to Mr. Hull
that he is not free to complete negotiations and sanction an
agreement. At the same time I wish to place on record the fact
that the Australian Government had actively pursued these
negotiations to the very end and regrets that, for domestic
reasons, the United States Government is not in a position to
enter into a trade agreement with the Commonwealth of Australia.