444 Minter to Makin

Letter CANBERRA, 12 December 1945

I have the honor to advise you of receipt of instructions from my Government to deliver to the Commonwealth Government the following communication:

'The Government of the United States refers to the document "Proposals for Expansion of World Trade and Employment" [1] and to the proposal of the Government of the United States that the United Nations Organization convene in the middle of 1946 a conference on Trade and Employment to consider and take action to realize the objectives referred to in that document.

It is the view of the Government of the United States that the success of the proposed conference can best be realized if there is thoroughgoing preparation for it; and that such preparation should include concrete plans, which the principal trading nations of the world would be prepared to adopt, for the actual reduction of tariffs and other trade barriers, and the elimination of discriminatory trade treatment, in accordance with the objectives agreed upon in the exchange of notes dated September 3, 1942 between the Governments of Australia and the United States. [2]

The Government of the United States, therefore, has the honor to ask the Australian Government whether it would be prepared to appoint representatives to attend a preliminary meeting in March or April of 1946, to be held at a place to be determined. It would be the purpose of the meeting, which would be attended by the other governments accepting invitations, to:

(a) Negotiate, for the consideration of the proposed conference, concrete arrangements for the relaxation of tariffs and trade barriers of all kinds which would command the support of governments attending the conference; and (b) To consult, and to reach such preliminary understandings as may be practicable with regard to other topics on the proposed agenda for the conference referred to above.

In order that the representatives of the United States may make a practical contribution to the work of the preliminary meeting, it will be necessary for the Government of the United States, under the procedure required by the Trade Agreements Act, to issue public notice of intention to negotiate for the reduction of tariffs and other trade barriers with the governments intending to participate in that meeting. In view of the public hearings and other procedures required by law this notice should be issued at least three months prior to the beginning of definitive international discussions by the representatives of the United States. Accordingly, the Government of the United States hopes to be able to issue by the end of this year or early in 1946 a public notice of intention to negotiate with Australia. In order to make this possible it is urged that the Australian Government indicate prior to December 31, 1945 whether it will participate in the preliminary meeting.

In accordance with customary practice, the proposed public notice will be accompanied by a list of the products which will be considered for the granting of trade concessions to Australia and on which public hearings will be held. The list will include those products of which Australia has been or is likely to become a principal supplier to the United States.

This invitation is also being sent to the following governments:

Belgium, Brazil, Canada, China, Cuba, Czechoslovakia, France, India, Luxemburg, Netherlands, New Zealand, South Africa, United Kingdom and Union of Soviet Socialist Republics.' [3]

JOHN R. MINTER

Attachment

INTERNATIONAL CONFERENCE ON TRADE AND EMPLOYMENT EXPLANATORY OUTLINE

A. At the preliminary meeting early in 1946 to be attended by the United States and by such of the other fifteen countries receiving invitations which have accepted the invitation each country would present a schedule of the tariff concessions which it would be prepared to grant in an agreement with the other countries attending the meeting, such an agreement also to contain mutually acceptable provisions dealing with tariff preferences and non- tariff trade barriers. Each country should also be prepared to make requests of the tariff concessions which it desires to receive from each of the other countries attending the meeting.

B. The tariff concessions in the schedule proposed by each country would be offered to all the other countries as a group. Each country would thus obtain in its own right all of the concessions made by each of the other countries.

C. With regard to non-tariff trade barriers, there would be included in the draft agreement provisions, uniformly applicable to the trade of all participants, giving effect to the objectives as to non-tariff trade barriers which are set forth in Chapter Three of the 'Proposals for Expansion of World Trade and Employment', (e.g. elimination of exchange controls, regulation of subsidies, abolition of quotas, etcetera).

D. These discussions would also afford opportunity for consultation among the countries participating in the meeting regarding all other elements in the proposals (i.e. questions of employment, policy regarding 'surplus' commodities, cartel policy, and an international trade organization).

E. The tentative agreement among the countries participating in the preliminary meeting (excluding the tariff schedules) would be subject to change at the general international conference in the light of the considerations advanced by other countries.

F. The general conference would also consider the questions of adherence to the draft agreement reached at the preliminary meeting and the treatment to be accorded by countries which accept the agreement to the trade of those which do not accept it and of any countries not invited to participate in the general conference. The drafting countries, i.e. those participating in the preliminary meeting, should propose at the conference that non-drafting countries be considered as provisionally adhering to the agreement upon acceptance of (a) the non-tariff provisions and (b) a commitment to undertake bilateral tariff negotiations with the other countries adhering to the agreement. Countries considered as adhering provisionally before they have completed such tariff negotiations should be required to give adequate tariff concessions in return for benefits which they receive as a result of other tariff negotiations already concluded. The drafting countries should also propose that, subject to exceptions for particular countries recommended by the proposed Internation Trade Organization, the benefits of the agreement should, after a reasonable period of time, be withheld from the trade of those countries which failed to adhere to it, and that the tariff concessions should similarly be withheld from the trade of countries which, having adhered, failed to negotiate tariff reductions judged by the Internation Trade Organization to be in conformity with the spirit of the agreement. Drafting countries and provisionally adhering countries should retain full liberty of action to determine whether to extend most-favored-nation treatment to the trade of countries not invited to participate in the conference and not immediately eligible to adhere to the convention. Decision in such cases would presumably be influenced by the adequacy of arrangements made by drafting countries in liberalizing their trade more or less pari passu with the action taken by adhering countries. Findings and reports of the proposed Internation Trade Organization regarding the trade and commercial policies of non-adhering countries might assist adhering countries in reaching such decisions.

G. Upon the close of the conference the agreement would be brought into force among the drafting countries and other countries as would join, in accordance with their own constitutional procedures.

1 Proposals for the Expansion of World Trade and Employment- Developed by Staff Members of Various Departments of the United States Government in Preparation for an International Conference on Trade and Employment, and Presented for Consideration by the Governments and Peoples of the World. Published on 6 December, the proposals included measures for the reduction of tariffs and elimination of trade preferences, control of commodities, the maintenance of high employment, and the creation of an International Trade Organisation under the Economic and Social Council of the U.N. What appears to be a final draft of the proposals, dated 1 November, is on file AA : A1067, ER46/1/2. See also Document 374, note 1.

2 See Documents on Australian Foreign Policy 1937-49, vol. VI, Document 39.

3 Makin replied on 21 December, advising that the Commonwealth Govt would appoint representatives to attend the preliminary meeting. On file AA : A1067, ER46/1/2.

[AA : A1067, ER46/1/2]