88 Coombs to Chifley

Cablegram ITO10 LONDON, 22 March 1947, 5.30 p.m.

MOST IMMEDIATE SECRET

Your T1. [1] We discussed the question of publication of United Kingdom list with United Kingdom officials 20.3.47. We made the following points- (1) That list was very comprehensive and covered substantial part of Australian tariff. Its publication would probably cause concern in manufacturing circles and would be politically unwise unless agreement affecting many of items listed was anticipated.

(2) It would be exceedingly difficult for us to conclude an agreement with the United Kingdom covering all these items because of the work involved in processing the requests.

(3) Furthermore since terms on which our goods were admitted to United Kingdom were already very satisfactory from our point of view it was difficult to see what United Kingdom could offer in the way of tariff concessions which would justify reductions on so wide a range of items as part of a 'mutually advantageous agreement'.

(4) Reductions in British preferential rates would involve also concessions to foreign countries for which we would receive no compensation. This intensifies difficulty of reaching an agreement satisfactory to Australia.

(5) We would in any case examine all items on which we have received requests from foreign countries to see whether it was practicable on these items to reduce British preferential rates.

These would cover very substantial number of items on which it would be difficult for United Kingdom to provide an adequate quid pro quo.

(6) It may well be in United Kingdom interest to rely for remainder of items on procedure of examination by Tariff Board.

(7) It was suggested tentatively therefore that a possible basis for a United Kingdom agreement might be- (i) Reduction in British preferential rate on items on which we have received requests from foreign countries.

(ii) An undertaking to have other items on which requests have been received from United Kingdom examined by Tariff Board within a specified time.

(iii) That these concessions should be balanced by whatever concessions United Kingdom has to grant in its tariff and by undertakings relating to agricultural policy, e.g. to avoid over- expansion of production of grain, butter and other products of direct interest to Australian export trade.

United Kingdom admitted many of these difficulties yet point out- (1) That concessions they would be able to offer could include concessions to United States or other foreign countries made to enable us to obtain better treatment for wool, meat and other items in which we are particularly interested.

(2) That concessions we make to Americans may well be largely at United Kingdom expense rather than at expense of our own manufacturers.

(3) That same reduction in Australian tariff generally may be necessary to enable United Kingdom to retain pre-war volume of trade with Australia because of changed position of Australian manufacturing industries.

(4) That they would find it difficult to give undertakings of a very precise character relating to agricultural policy and consider that willingness to retain foreign duties on goods in which we are interested where in their own interests they would wish allow goods in free of duty does represent substantial concession for which we should be prepared to pay.

(5) Reliance on Tariff Board procedure is unsatisfactory to United Kingdom because criteria observed by Tariff Board are unsatisfactory to United Kingdom.

It was generally agreed that it would be unwise to publish present list of requests precipitately. United Kingdom have therefore undertaken to go through list to eliminate- (1) Items already covered or likely to be covered by requests from foreign countries.

(2) Items in which there is danger that reduction in foreign duty required by reduction in B.P.T. rate would mean that granting United Kingdom request would give relative advantage to a foreign competitor.

(3) Items of little importance.

(4) Items on which present supply position probably precludes any great development of trade and which might therefore be dealt with later.

(5) Items where reliance on Tariff Board procedure might be acceptable to them.

They expect to have this review completed within a few days and it should then be possible to judge whether lists could be published without embarrassment. General question of whether an agreement is possible between us can for the time being stand over pending further investigation and discussion here with other Commonwealth countries.

1 Inserted from correcting cablegram C33 dispatched 23 March.

Cablegram T1, dispatched 14 March, sought the delegation's opinion about whether or not the list of United Kingdom's requests for tariff concessions should be published.

[AA : A1068, ER47/1/12]