106 Report of Conversation between Auge and Watt, Forsyth and Pyman
Note for file CANBERRA, 6 September 1946
The French Minister explained that he  wished to clarify in his own mind certain aspects of our draft agreement. 
The following points were raised by him- (a) He asked why we had referred only to approval of the terms of trusteeship by the Assembly (Art. 85) and why no reference had been made to approval by the Security Council. He drew attention in this connection to Art. 7 of our draft which empowers the Administration to take all desirable measures for defence of the Territory.
It was explained to M. Auge that Security Council approval was required by the Charter only when a 'strategic area' was designated in the agreement. 
He then asked whether we regarded New Guinea as a 'strategic area', referring to comments in the press and to Mr. Chifley's statements on Manus, all of which underlined the importance attached by the Australian Government to New Guinea as an area of direct importance to Australia and British Commonwealth defence.
It was pointed out to the Minister that though New Guinea might be strategically important to our defence that did not make it necessarily a 'strategic area' within the meaning of the Charter.
It was possible under the Charter we believed, to propose the designation of a strategic area in the future if we desired to do so.
(b) Equal treatment clause in economic matters (Art. 76(d)). M.
Auge drew attention to the provision regarding equal treatment in economic matters which, he stated, covered such matters as preferential tariffs etc. As he was presumably seeking information as to the absence of any clause in our agreement dealing with this question of equal treatment, it was explained to him that we had relied on Charter provision (Art. 76(d)). Particular attention was drawn to the wording of the Charter which made equal treatment subject to the attainment of the objective of native welfare.
(c) Relationship with South Seas Commission. M. Auge remarked that he felt that there might be some inconsistency in the Charter reference to the political advancement of the inhabitants of the Mandated Territory and to [the apparent determination to exclude that subject from]  the terms of reference of the South Seas Commission.
In reply it was pointed out that the Commission was to be purely an advisory body and representative only of Governments with direct territorial interests in the area. That [it was not to]  be connected in any organic way with the United Nations Organization. Attention was drawn to the Caribbean Commission Constitution, to which France had subscribed, and in which it was stated that the Commissions would co-operate generally with UNO but no organic link with UNO was mentioned.
It was admitted that the existence of regional organizations created certain problems of adjustment so far as the World Organization was concerned. But it was felt here that such regional groupings could play a useful part in assisting nations, possibly, to discharge their obligations to the World Organization.
It might be a very good thing to leave room for such spontaneous groupings of powers interested in a particular region to form associations for specific regional purposes-the inspiration for such an organization coming from below and not being imposed from the centre.
Discussion on this aspect would doubtless take place at this Conference to be convened to discuss the establishment of the South Seas Commission.
(d) 'States directly concerned'. M. Auge asked whether we regarded all the four Governments we had consulted as 'states directly concerned'.
[It was explained to him that we had not been able to find any definition of the phrase. This inability to discover a satisfactory definition was]  apparently shared by many other nations. At the moment therefore we had not chosen to regard any one state as necessarily 'directly concerned' in the trusteeship agreement for New Guinea. The matter was exceedingly difficult.