106 Coombs to Chifley

Letter GENEVA, 29 May 1947

Resulting from our consideration of the possibility of a Trade Agreement with the United Kingdom, we have been considering a means by which we could demonstrate in Australia the benefits resulting from each of the Trade Agreements to which we may be a party.

Variations in duties require an examination in Parliament of each particular item and in the past it has been necessary to provide reasons supporting reductions in protective duties. On this occasion, if negotiations are successfully completed, we shall have to rely on more general explanations than would be possible if we had had Tariff Board recommendations to determine new rates of duties on individual commodities.

Apart from any reductions in duties which we ourselves may secure in direct negotiations with other countries, we shall, under the proposed procedure, secure, indirectly, benefits from reductions which other countries may obtain from countries with which they negotiate. Many of these, of course, will be of remote value, as, for example, concessions that may be made by China in a negotiation with the Syro-Lebanese Customs Union. On the other hand, we may look for long-term gains in respect of reductions secured by the U.K. in the duties on manufactured items entering the United States.

We, therefore, thought it might give a more balanced picture of the position if a statement were compiled listing on one side- (a) commodities in respect of which Tariff concessions were granted by Australia to each of the countries with which we negotiated directly, (b) commodities in respect of which Tariff concessions were granted by Australia in payment for indirect benefits received through negotiations between U.S.A. and other countries and showing, on the other side, commodities- (a) on which Tariff concessions were secured by Australia as the result of direct requests on other countries, (b) on which Tariff concessions were secured by Australia indirectly through negotiations between other countries and in respect of which Australia at present has- (i) only a slight interest;

(ii) no interest at all.

For example, such a statement for the U.S.A. would be drawn up in the following form:-

U.S.A.

A. Commodities in respect of which reductions have been made in the Australian tariff in response to U.S.A. requests.

(say x items) B. Commodities in respect of which reductions have been made in the Australian tariff in payment for indirect benefits received through negotiations between U.S.A. and other countries.

(say y items)

A. Commodities in respect of which reductions have been made in the U.S.A. tariff in response to Australian requests and of which Australia is a major supplier.

(say z items) B. Commodities in respect of which reductions have been made in the U.S.A. tariff in response to requests by other countries and of which Australia is a significant but not major supplier.

(say z items) C. Commodities in respect of which reductions have been made in the U.S.A. tariff in response to requests by other countries and of which Australia is not at present a significant supplier.

(say w items)

Such a statement as this would bring clearly before the public the whole of the benefits which we secure through the negotiations in comparison with what we gave. The statement would show considerably more commodities on which concessions were received by Australia than were covered by the requests made and more than those on which Australia granted concessions.

As you know, we have tended to keep our requests upon countries to a minimum and where, in the past, we have not been an important supplier, we have not made requests. Most of our requests, therefore, relate to the duties charged on primary products. Our possible future interests in the export of manufactured goods have not been overlooked, but we expect that other countries, which are at present the principal suppliers of these goods (for example, to the U.S.A.) will make the necessary requests for reductions in these duties. We would, then, in accordance with the most- favoured-nation principle, obtain the benefit of such concessions as resulted from these requests, without payment or with much smaller payment than if we made direct requests ourselves in respect of the commodities concerned.

For the most part, we have felt that we would be creating difficulties for ourselves in including in our requests, items in respect of which the benefits will be of a long-term nature and which we may reasonably expect to gain from the requests made by other countries. Thus, we could, no doubt, make some requests on Chile, although we have no immediate prospects of exporting to that country. If we do so, however, it would presumably be more difficult to withstand pressure in response to requests from Chile for reductions in the Australian tariff.

Similarly, we could make requests on manufactured food items in U.S.A. and Indian, N.E.I. and Chinese tariffs. If we do so, however, we will either be informed that we are not entitled to make the requests or what might be worse, expected to make concessions to balance benefits we would get indirectly anyway.

We are closely watching the requests made by other countries to ensure that reductions in the tariffs on manufactured goods entering the U.S.A. and other principal markets will be sought in respect of commodities of which we are potential future exporters, and we will keep you advised of these.

I feel that the suggested method of presentation referred to above is a better method of demonstrating that we are, in fact, getting a 'mutually advantageous' bargain than by attempting to expand our requests.

[AA: A1068, ER47/1/8]