100 Coombs to Cabinet Sub-Committee on Trade and Employment Conference

Cablegram ITO71 GENEVA, 9 May 1947, 10 a.m.

IMPORTANT SECRET

Together with Beasley I saw Cripps on Monday afternoon and informed him of substance your proposed reply on question negotiations with United Kingdom. [1] He expressed himself as well satisfied with our proposals and suggested that we should proceed with early examination of issues involved with British Delegation in Geneva. He is inclined favour listing of the negotiations in Geneva, but agrees that before a final decision made, views of other Commonwealth countries particularly Canada should be sought.

We will arrange British Commonwealth meeting here for this purpose. I raised with him question of unbound reductions [2] and while he indicated that he would wish discuss matter with his officers, he could see advantages from Commonwealth point of view in limiting offers on items not covered by foreign requests to reductions without binding and recognised that it might be in British interest to accept reductions in this form. I suggested that our first step should be to examine United Kingdom requests on items covered also by foreign requests and then proceed with consideration of other requests.

When we raised question of wool, Cripps commenced by expressing some surprise that we had anticipated a full 50 per cent reduction. As we had heard this view previously from certain British officers in Geneva, I thought it well to reply forcibly that quite apart from economic justification for such a reduction and its general consistency with United States undertakings we felt that we were entitled to such a reduction because we had been offered it in negotiations which commenced in 1941. We reminded Cripps also that those negotiations did not reach finality largely because of attitude taken by United States that it would be better to defer them to form part of multilateral negotiations and that in this attitude they were influenced by British views. We pointed out that if those negotiations had been permitted to reach finality, we would now have been seeking a second 50 per cent reduction. Generally in relation to wool we (A) outlined case as we have presented it to Clayton, (B) delivered Prime Minister's personal message relating to political importance of question [3], (C) drew his attention to extremely difficult implications for Commonwealth as a whole if Australia and South Africa were unable obtain acceptable agreements and therefore were forced to withdraw their concurrence to modifications of preferences in United Kingdom market, (D) expressed view that immediate purpose was to test to full firmness of present United States attitude and that this can best be done if British countries all make it clear that United States attitude threatens a breakdown of whole set of negotiations and indeed Charter discussions and that responsibility for such breakdown would lie with United States.

In reply, Cripps stated that he recognised t[he] full economic and political importance of issue to Australia and that United Kingdom was anxious to help. He undertook that his delegation would emphasise in their discussions with United States widespread implications of United States refusal meet our request and also take up matter personally with Clayton whom he expects visit United Kingdom during next two weeks.

1 The meeting took place in London on 5 May. For the reply see Document 101.

2 Cabinet Sub-Committee had asked the delegation to explore the practicability of including unbound reductions in the Geneva agreement because, if acceptable, such offers could facilitate negotiations for a UK-Australian agreement within the Geneva framework.

3 Earlier that day Coombs had telephoned Chifley who gave him a message for Cripps to the effect that the ITO proposal was 'difficult politically to sell in Australia' and would be impossible without a good concession on wool.

[AA: A1068, ER47/18/1]