My telegram E.47.  Additional reason for the postponement of the proposed London talks is that the opening of general discussions concerning commercial policy arising out of Article 7 might interfere [with] or delay the conclusion of agreements now being negotiated.
It is in our interests that these negotiations should proceed independently of the general discussions of commercial policy. On the Australian export side American offers of a reduction of duties by 50% on wool, meat and butter are of great importance.
Progress in the discussions has been delayed largely but not wholly by the attitude of the United Kingdom to her proposed second treaty with the United States.
The United Kingdom has not responded to the request by the United States for modifications of certain preferences enjoyed by Empire countries under United Kingdom tariff for which concurrence various Dominions is required. Also the United Kingdom has not followed up offers made by the United States to the United Kingdom late in 1941, and has not signified whether she intends to proceed with negotiations.
Apart from purely Australian point of view, conclusion of agreements by the four Empire countries might well place the Empire countries in a strategic position for any multilateral discussions. Canada with two agreements with the United States has reached a position where, because of the limitation on the power of the United States administration to reduce tariff rates, the United States is not in a position to offer any return for further concessions by Canada.
If the agreements now in contemplation were made with the United States by Australia, New Zealand, South Africa and the United Kingdom they too would be in a similar position.
We have not yet exhausted capacity of the United States Administration to offer concessions against tariff reductions.
If the agreements as contemplated were completed the United States would in any multilateral discussions have to provide new machinery to meet the obligations she has assumed under Article 7 of the Mutual Aid Agreement and to offset any modifications of tariffs or preference which she desired of Empire countries.
Briefly, argument may be summed up:-
(1) Opportunity to get a substantial reduction in duty on commodities of major importance to Australia and other Dominions may pass and leave us regretting [sic].
(2) We have not yet exhausted the possibilities of the bilateral trade negotiation system  for modification of duties by both parties to a trade agreement.
(3) It is only if the possibilities of this method are exhausted that the United States will be obliged to bring into the field of discussion more fundamental review of their commercial policies as a counterpart to their demands on Empire countries.
It is recommended that you represent urgently to the United Kingdom:
(I) that we do not wish to miss the present opportunity to obtain tariff concessions from the United States on commodities of major importance to Australia by allowing relevant discussions of a general nature, the outcome of which is necessarily uncertain;
(II) that we wish to proceed with trade agreement discussions and would like further progress before beginning discussions of a general nature;
(III) that the United Kingdom should advise us whether:
(a) they contemplate proceeding with negotiations for a further bilateral agreement with the United States on the lines contemplated when several-sided discussions were opened in 1941 on the initiative of the United Kingdom;
(b) if they decide not to go on with a treaty they agree to meet the request for concessions in their tariff required by the United States as an offset to the benefits offered by the United States to the Dominions concerned.