128 Cabinet Sub-Committee on Trade and Employment Conference to Australian Delegation, Geneva

Cablegram T217 CANBERRA, 7 August 1947, 12 noon

IMMEDIATE SECRET

Your I.T.O. 241 and 250- Cabinet Sub-Committee considered your telegram in detail at considerable length and expressed the following views:

[matter omitted] [1]

2. The preamble to your proposed letter to the United Kingdom was thought satisfactory.

3. It was considered that specific mention should be made of United Kingdom preferences in New Zealand as well as those operating in South Africa and India. Sub-Committee fully appreciated purely bilateral aspect of Australia - New Zealand trading relations but the result of negotiations must be assessed on a multilateral basis and immediate problem is to obtain balancing concessions from the United Kingdom. The elimination or reduction of United Kingdom preferential margins in New Zealand on items such as woollen goods is more important to us than similar concessions in the other Dominions mentioned in your telegram. It was agreed, therefore, that you should explore the possibilities of securing parity of entry into New Zealand for some of the more important items in which we are directly competitive with the United Kingdom.

4. Sub-Committee concurred in approach to reduction or elimination on specified products of preferential margins enjoyed by United Kingdom in Australia.

5. In regard to United Kingdom agricultural policy, the Sub- Committee appreciated your efforts to find means alternative to tariff arrangements which might help to effect a more balanced arrangement but regarded the suggested United Kingdom undertaking in this connection as of little or no practical value in itself and did not consider that it would have any appeal here as a balancing factor. It was agreed that there would be little point in your pursuing that line of approach.

6. Similar views were expressed by the Sub-Committee in connection with your proposal for an understanding relating to United Kingdom support for intergovernmental commodity agreements.

7. Breen's views were sought as requested by you concerning an undertaking by United Kingdom in regard to industrial development.

While in sympathy with the idea and ready to enter discussions on the subject with the United Kingdom in the near future he would appreciate a clearer idea of what Delegation has in view before commenting in detail. Meanwhile he will consider the matter further. Cabinet Sub-Committee, however, was of the opinion that an undertaking of this kind would not be of any practical or political significance in the context of the Geneva trade negotiations.

8. Sub-Committee approved in principle that within the framework of a reciprocal arrangement with the United Kingdom concessions by the British colonies might be offset to the extent necessary by concessions by Australia to the United Kingdom.

9. In the search for balancing factors of practical value the suggestion was made that it might be possible to secure an undertaking in relation to the continuance on a favourable basis to us of long term contracts for the purchase by the United Kingdom of Australian primary produce which would offer some security to particular primary industries here for a reasonable period ahead.

Cabinet Sub-Committee felt that this also would not have much selling value and it was realised that such an undertaking could not be included in a tariff agreement and many other difficulties were foreseen. However, it was thought worthwhile to seek your comments. [2]

1 The omitted text commented upon the nine items for which tariff concessions were sought.

2 The Delegation replied that it saw little value in pursuing such a line.

[AA : A1068, ER47/1/29]