Principal matters arising from discussions during the week have
been cabled separately. These cables include a review of tariff
negotiations so that this may be considered by Cabinet at its
meeting on Monday.

Sugar. In I.T.O.188 we reviewed effects of general agreement and
charter upon sugar. Question of sugar preferences will not arise
at this series of meetings. Amendments which are to be made in
draft charter will adequately cover our embargo on imports and
maintenance of a home consumption price. International Sugar
Agreement can be brought under chapter VII of charter.

General Agreement. Have had some further discussions about the
form of general agreement on tariffs. There is an appreciation of
difficulties involved in bringing the one multilateral agreement
into force. Further consideration is being given to alternative of
bilateral agreements. An examination of the replies made by other
countries to questionnaire referred to in our I.T.O.186 shows that
about nine countries will not ratify the general agreement before
March or June next year. Some of the countries have stated that
they would be embarrassed in their parliaments or with other
countries in submitting for ratification an agreement containing
much of the charter which itself would be subject to further
discussion at World Conference.

In a discussion with Tariff Negotiation Steering Committee they
indicated that their view is that the signing of the general
agreement in Geneva would involve commitments to following extent:

(a) In establishing text of agreement and the schedules of tariff,
and,
(b) In committing Government to recommend to Parliament acceptance
of agreement.

The signature of course, would not in any way bind Parliament.

This has not been discussed at any length and it may be that other
countries will seek to make their signature at Geneva conditional
upon similar signature by other countries to the charter after the
World Conference. This would enable both sets of obligations and
benefits to be accepted together and subsequently to be submitted
jointly to Parliament.

If the view expressed in (b) above is confirmed, however, it would
mean that arrangements would have to be made for Cabinet to
consider outcome of these tariff negotiations during interval
after completion of negotiations here and formal signing of
agreement in Geneva.

We are examining this in detail prior to more formal discussions
and will advise further.

Preferential Negotiations. We are to consider at a Commonwealth
meeting next week method by which reductions in preferential rates
of duty agreed at Geneva in negotiations solely between British
countries shall be shown. United Kingdom is in favour of
agreements separate from general agreement concluded between other
members [of] Preparatory Committee. Will advise further on this
after discussion.

Protective Measures. As reported in our I.T.O.193 there has been
delay in charter discussions as a result of the desire of a number
of countries to retain freedom to use protective measures such as
quantitative restrictions, internal taxes and mixing [1]
requirements. Their argument is that these should be placed on the
same basis in charter as tariffs and subsidies. There is, as yet,
no solution of this difficulty.

New Zealand Amendment. New Zealand position is linked with
discussion referred to in preceding paragraph. We are continuing
our private discussions with New Zealand delegation to find some
amendment to Article 26 [2] that would meet their need to continue
quantitative restrictions. Shall telegraph separately about this
later but it seems that unless the New Zealand Government adopts
an extreme attitude an amendment could be prepared which would
adequately meet her position and which would not be opposed by
other countries.