Dispatch 8/44 (extract) CHUNGKING, 8 February 1944
[matter omitted] 
(a) The abandonment of extraterritoriality As far as Australia is concerned this matter is now in abeyance but the Chinese are busy making treaties with other countries in a form which meets their wishes. When they have completed their list we shall be confronted with a situation in which we are among a very few dissentients. The matter which causes our difficulty is that the Chinese want to include in our treaty Articles VI, VII and VIII as they appear in the British treaty. Article VI contains reciprocal rights to reside, travel and carry on business for nationals of each country residing in the other, and also for equal treatment in legal and tax administration. Article VII relates to the opening of consulates and Article VIII relates to the opening of negotiations for a commercial treaty. 
All these Articles appeared in the British treaty and Article VI and VIII in the American treaty. They have also been signed by Norway and, I believe, by Brazil. In the treaty signed by Belgium, Article VI appears in a form which would permit the entry of Nationals. The Chinese have always expressed a keen desire to have our treaty in precisely the same form as that with Britain but they have also betrayed an intention to go distinctly beyond it and secure reciprocal rights of migration. They tried to insert in the Australian treaty a clause which could only be construed as affording the right of entry.  I rejected this proposal as soon as I saw it and the Chinese ultimately submitted an Article in the same form as Article VI of the British treaty.
I have always had two things in mind from the time when the treaty was first mooted. First that the Chinese would try to insert some provisions which they wanted but which we did not; and second that opinion on Asiatic exclusion in Australia is so keen and suspicious that any concessions or supposed concessions might be distorted by enemies of the Government as a breach of the 'White Australia' policy. This was the reason for my original advice that if possible we should avoid signing a treaty but should renounce extraterritoriality in some other way by declaration or exchange of notes; my idea being a statement of adherence to the British renunciation.
The position is now changed. We have submitted a treaty and started to negotiate. The Chinese are keen on the inclusion of Articles VI, VII and VIII but you have expressed your objection to doing anything more than abrogating extraterritoriality.  Our proposal to change the form of negotiation from a treaty to an exchange of notes is based on the fact that we have adhered to the British Order-in-Council  which wipes away all the machinery of extraterritorial jurisdiction. It does not, however, get away from the real difficulty, because the same stipulations can be insisted on by either party in an exchange of notes as in a treaty-and if they are not agreed to an exchange may be refused. The only way to avoid an agreed exchange is to have a unilateral declaration of abrogation. I have sent to your Department a suggested draft of such abrogation.  Meanwhile the Chinese are ignoring our request to consider an exchange of notes and are proceeding to sign with other powers treaties with the clauses to which we object. At some time we shall be faced with these and the question is whether a refusal to sign which would put us in a condition of isolation would do us any harm.
I have discussed the question at length in my various despatches and it is not necesary to repeat here what I have said. I would only point out that Canada has now accepted the view that Article VI is innocuous in form and makes no provision for the admission of Chinese into Canada.  This is, I think, a correct view though it may still be represented as a breach of the 'White Australia' policy.
F. W. EGGLESTON