78 Evatt to Melville

Cablegram 52 [1] CANBERRA, 15 March 1944


1. I was surprised and alarmed at your 40, paragraph 4. [2] While Article VII might possibly involve some reduction in preferences your admission that it might involve major adjustments to Australian industries seems quite contrary to employment approach set out in basic instructions. [3] As I informed you [4] as a result of our efforts Canadian Mutual Aid Agreement [5] omits all references to tariffs and trade barriers. I think you should not commit us even on official level.

2. Report contained in your 40 makes it clear that while United Kingdom have accepted the employment agreement [6] they do not yet fully appreciate significance of employment approach in relation to commercial policy. Although discussions on employment and monetary proposals might seem satisfactory, it would be a bad mistake to appear satisfied. United Kingdom officials still have to be persuaded to put a strong case on employment and monetary proposals to United States officials and commercial policy is still to be discussed.

3. Please advise when further United Kingdom - United States discussions will take place. Australia should have a direct representation not only because of our particular interests but also because we are authors of one of the main proposals.

4. At present, this represents my personal view only, but under no unemployment quotas.

circumstances do anything definitive until I can call Cabinet subcommittee on Economic Collaboration . [7] I am confident they will share my anxieties.

5. Perhaps you will send me a personal cable through this same channel.

1 Sent through the External Affairs Officer in London.

2 Dispatched 11 March. On file AA:A989, 44/735/55/3/5. Paragraph 4 read: 'We said that we realised that the terms of the Mutual Aid Agreement involved reductions in preferential margins and that these reductions would not be effected without major adjustments to Australian industries. Before we could commit ourselves however we needed a much clearer idea of the effect which the various proposed reductions would have on our industries and trade. For instance Australia was greatly interested in British prosperity and would wish to know what prospects there were of the United Kingdom obtaining compensating markets in return for those lost.

Further we would need to know what commodity agreements there would be and how they would develop, for example Australia could not surrender the meat preferences in the United Kingdom without adequate safe-guarding arrangements.' 3 See Evatt's letter to Melville of 27 January (on file AA:A989, 44/735/55/3/1) and Document 28, containing the five basic principles Evatt included in his letter to Melville.

4 Cablegram 42, dispatched 2 March. On file AA:A989, 44/735/55/3/2.

5 Document 68.

6 The Australian delegation had circulated a document, ASD(44)10, consisting of a memorandum entitled 'An International Employment Agreement'; appendix A, 'A draft International Employment Agreement', and appendix B, 'Aspects requiring further consideration' (on file AA:CP43/1, 43/1324, i). Appendix A, amended at meeting on 6 and 13 March, formed the basis of 'A Draft International Employment Agreement' published as Document 87. The major amendment to the Australian draft was the deletion of section (vi) on agreed 7 See Document 21, note 15.

[AA:A989, 44/735/55/3/5]