93 Melville to Evatt

Cablegram 48 [1] LONDON, 22 March 1944, 5.30 p.m.

IMMEDIATE SECRET PERSONAL FOR DR EVATT FROM MELVILLE

(1) I am sorry you have gained impression [2] that I have expressed views contrary to my instructions which include the Australian - New Zealand points of agreement. [3]

(2) When you have had an opportunity to read, as a whole, the minutes of the meetings and the concluding report of the Conference [4], I feel sure you will agree with me that our position has been fully safeguarded and that your impression is the result of the sort of misunderstandings that so often arise from cabled summaries.

(3) The purpose of the present discussions has been to explore at an official level and without commitment to Government's possible methods of giving effect to Article VII of the Mutual Aid Agreement to which the various Governments have subscribed.

(4) Accordingly, in the course of the discussion I have necessarily had constantly before me the terms of Article VII which provide for agreed action directed towards the expansion of production, employment and consumption, the reduction of trade barriers and the elimination of all forms of discriminatory treatment in international commerce.

(5) In addition, of course, I have also had constantly before me the instructions of the Australian Government and I have at all times taken great care to ensure that the officials of the United Kingdom and the other Dominions fully appreciate the Australian approach to the carrying out of Article VII. I therefore strongly urged- (a) That the major emphasis must be put on the positive aspects of Article VII (i.e. the expansion of production, employment and consumption) not only because of their deeper significance as an end, but also because it is only by successful measures in these fields that the reduction of trade barriers and the elimination of preferences, etc. can be safely undertaken.

(b) That, in addition, any proposals for the reduction of trade barriers and the elimination of preferences must avoid sweeping and sudden measures which might cause distress and must permit economic measures necessary to ensure maintenance of employment and the development and diversification of industries.

(6) The particular paragraphs on preferences to which you have taken exception should, I suggest, be read in the foregoing context. Even when considered in isolation they do, I believe, satisfactorily safeguard the Australian position. Whilst admitting the ultimate objective, they indicate that before the Australian Government could actually effect reductions, it would want more information, they express our doubts as to whether the tariff reductions proposed for other countries would adequately compensate us for the cuts proposed in preferences and they conclude by foreshadowing that for these reasons, Australia may need to retain preferences in the United Kingdom.

The Minutes show that we strongly stressed how serious the consequences to Australian primary industries would be if preferences were substantially reduced and other measures proposed under Article VII were found to be inadequate.

(7) However, if the Government desires any alterations to the paragraphs in question I shall write to the appropriate United Kingdom authorities asking that the alterations be made and that the delegations of the other Dominions and India be informed. In this connection I would add that your telegram arrived after the paragraphs had been finally dealt with.

(8) With regard to your 52 [5], I did not discuss it or the preparation of my reply [6] with anybody whatsoever except McCarthy [7], because of the importance of preferences to his Department, and Wheeler, who is assisting me with cables. In view of the terms of your telegram I did not even show it to the rest of the delegation. Neither have I been subjected to any pressure other than the general arguments advanced at the Conference table.

These have been fully reported to you in my telegrams. Mr. Bruce has not participated in the Conference in any way, but I have naturally kept him informed of the progress of events.

Accordingly, I did inform him of your telegram and my reply, but only after my reply had been despatched.

(9) With regard to the New Zealand attitude, the views expressed by New Zealand officials have been reported in my earlier telegrams. On preferences, the text of their final summary was quoted in full in my 44. [8] Generally there has been a substantial similarity in the views expressed, but the New Zealand officials have not participated in the discussions to the same extent as ourselves. Neither have they, possibly because of the differences between the economies of the two countries, stressed all the difficulties raised by us. This particularly applies to preferences and the formula approach to tariff reductions.

(10) I have just received your official telegram 2784 [9] and shall reply urgently. In all the circumstances, however, I am despatching this personal telegram without alteration.

1 Sent through the External Affairs Officer in London.

2 Document 84.

3 Document 78, note 3.

4 The concluding report (ASD(44)16 of 21 March) is on file AA:A989, 44/735/55/4/1. The minutes, arranged according to subject, are on the same file and on A989, 44/735/55/4/2; A989, 44/735/55/4/3; A989, 44/735/55/4/4; and A989, 44/735/55/4/6.

5 Document 78.

6 Document 83.

7 E. McCarthy, Assistant Secretary (Marketing), Commerce and Agriculture Dept and until September, Commonwealth Govt Shipping Representative in Washington.

8 Document 83.

9 Document 88.

[AA:A989, 44/735/55/3/2]