96 Coombs to Chifley

Letter GENEVA, 16 April 1947

The second session of the Preparatory Committee for an International Conference on Trade and Employment commenced in Geneva on the 10th April, 1947. The Committee re-elected as Chairman, Monsieur Max Suetens of the Belgian Delegation, who was also Chairman of the first session.

After the more formal business had been disposed of, Mr. Erik Colban (Norway), the Chairman of the Drafting Committee, presented the Drafting Committee's report and this report, like that of the first session of the Preparatory Committee, has now been made public. We have not yet had time to make a detailed examination of the report of the Drafting Committee, but we are hoping to do so at an early date.

The opening days of the Conference have been taken up with statements of principles by the leaders of each Delegation. The transcript of these speeches has been forwarded to Australia. They are, I think, of significance in the stress which is placed upon the determination of each country to succeed in the drafting of a Charter for an International Trade Organisation, and to make a contribution towards the objectives of the organisation by a substantial reduction in tariffs. The speech of Sir Stafford Cripps is an excellent summary of the United Kingdom position in relation to these discussions, and I attach a copy of it for your perusal. You may recall that last year in his opening speech, the Leader of the U.S.A. Delegation referred to the consequences for other countries if the negotiations should fail, and stated that U.S.A., whilst it would be affected, would be in a position to withstand the difficulties. In his speech this year, Sir Stafford Cripps referred to this comment and made it plain that the United Kingdom could, and if the necessity arose, would meet the difficult situation in the event of there being a failure in the negotiations.

Owing to the delay in the arrival of Mr. W. L. Clayton, the Deputy Leader of the United States Delegation mainly confined his remarks to quotations from the speech of the President of the United States made at Waco, Texas, on the 6th March, 1947, and he stressed the President's concluding words 'the negotiations at Geneva must not fail'. He went on to refer to the public hearings through the United States and the investigations by a Committee of the United States Senate of the draft Charter and said that at the appropriate time, a number of additional suggestions for the improvement of the draft Charter would be made. He reported that the United States was now prepared to table concessions to each of the other countries, members of the Preparatory Committee, and that they were anxious for an early commencement of the actual negotiations.

The leader of the Indian Delegation-the Minister for Commerce- referred in appreciative terms to the amendment made at the first session to the draft Charter to include the chapter on industrial development. Australia secured, at that meeting, strong support from the Indian Delegation in its proposals for this section and the present emphasis of the Indian Delegation that this is a more positive and constructive aspect than the removal or reduction of trade barriers is of considerable interest.

We have not so far commenced any of the detailed tariff negotiations and it seems likely that there will be a delay of some days before there is agreement concerning the procedure to be followed. You will already have had my cable referring to the discussions at a meeting of Heads of Delegations on Saturday last.

Developments in this subject will be reported to you by cable, but some general comments on this topic follow.

There are certain other matters upon which some comments should be made.

Tariff Negotiations and Procedure:

U.S.A. has stated that they had proceeded upon the principle stated in the procedural memorandum that at the commencement of the negotiations all countries would lay on the table the concessions which they proposed to make in response to the requests which they had received. They had therefore reviewed the whole of the likely negotiations and on the basis of the concessions which they expected to receive in the sixteen direct negotiations and the indirect benefits from the remaining negotiations had determined the responses which they were prepared to offer to other countries.

When I suggested that much of the procedural memorandum was unnecessary and that there were only a few matters of principle upon which agreement was necessary prior to the commencement of the negotiations, the U.S.A. Delegation agreed with the exception of the proposed variation that would temporarily limit the exchange of responses. This was the course proposed in the cable sent by the U.K. Delegation following the discussions at Spencer House and is referred to in my letter of 24th March, 1947.

A number of Delegations indicated that they were not yet in a position to table many responses, partly because some requests were still outstanding and that others had been received but a few days before. The U.S.A. Delegation stated that if, in these circumstances, countries were to delay the commencement of their negotiations, they would have to contemplate revising and curtailing their first offers.

They indicated, however, that the degree of variation in the offers which they had already prepared would depend upon the number of negotiations that were likely to proceed and the time within which they would be commenced.

It was therefore agreed that the facts should be obtained and that on the basis of these, the U.S. Delegation stated that they would determine their future attitude towards the negotiations.

As explained in my cable, this involves us in a decision on a number of points and makes more urgent the need for a determination of our policy in relation to negotiations with the United Kingdom.

I think it unlikely that we need take too seriously the U.S.

proposal to revise their first offers. If the negotiations proceed on the basis suggested by the U.K., it would merely mean that the commencing circle would include something less than the whole of the seventeen members of the Preparatory Committee. As the members advance with their preparations the circle would increase and as that occurred the U.S.A. responses should become widened and return towards the level at which they were originally prepared.

There is, however, a possibility that the U.S.A. Delegation will wish to refrain from commencing negotiations until such time as all countries are prepared to proceed with all their negotiations.

That may involve a considerable delay and, I believe that, on balance, because of this the U.S.A. will eventually agree to a commencement of the negotiations even if these were to be only those in which the U.S.A. is directly involved.

All the other members of the Preparatory Committee are in favour of the United Kingdom proposal, particularly as none of them is as well equipped for the commencement of the negotiations as the U.S.A.

U.K. Negotiations:

We have despatched some detailed comments on the telegram forwarded to you by the Dominions Office [1], and we have also transmitted a draft reply which we think would be appropriate.

This subject is one which must be dealt with by telegram and consequently, I shall refrain from comment here that would merely duplicate my telegrams to you. The problem, however, has been removed from the immediate circle of the British Commonwealth by the fact that the United Nations has informed the Preparatory Committee that the United Kingdom has lodged rate requests, inter alia upon Australia.

Draft Charter.

There has been a discussion concerning the programme for the further drafting of the Charter for an International Trade Organisation. It seems likely now that it will not be possible to commence the detailed consideration of the Charter prior to May 15th. This will provide a period beforehand which can be devoted exclusively to tariff negotiations. Thereafter, both will proceed concurrently. It has been agreed, however, that a discussion prior to that date of any Article of the Charter, for the purpose of facilitating the tariff negotiations, should not be precluded.

This is subject to the understanding that delegations do not commit themselves at this stage either to the particular Articles which should be included in any general agreement on tariffs, or to the wording of the Articles. I am hoping that we will be able to proceed rapidly with our own re-examination of the Charter in the light of the report of the Drafting Committee, and that thereafter we shall be able to send our recommendations to you for consideration, as provided in your memorandum of instructions, dated 18th February, 1947.

Ministerial Representation:

At the commencement of the discussions, the United Kingdom Delegation was led by Sir Stafford Cripps, but he has now returned to the United Kingdom and will not be present in Geneva until some progress has been made in the tariff negotiations. The Hon. Walter Nash has arrived to lead the New Zealand Delegation and spoke on their behalf at the opening Plenary Session. At this stage I think it is possible to continue without the presence of a Minister from Australia although there may be developments relating to the form of the negotiations which would make his presence very desirable.

I shall, however, keep you closely informed about this by cable.

Non-Governmental Advisers:

The Non-Governmental Advisers have arrived in Geneva and I have had a number of discussions with them. The U.S.A. Delegation raised some objections to the presence of non-governmental representatives from various countries being present in the block of offices wherein are located the secret documents relating to the tariff negotiations. After consultation with the Secretariat and the U.S.A. Delegation I thought it best to meet the objection and we have arranged for suitable office accommodation in Geneva where it is possible for the non-governmental advisers to maintain their headquarters. They will also have a room in another section of the Palais des Nations. I have discussed with them in broad outline the problem with which we are faced in considering the possibility of a reciprocal Trade Agreement with the United Kingdom and other countries upon whom we have few requests to make. I have asked them to submit their advice on this problem, if possible jointly, or should they prefer to do so, as individual advisers. I have also informed them of the acquiescence of other Delegations, including the U.S.A., in our views upon the scope and application of the procedural memorandum.

1 Document 94.

[AA : A1068, ER47/1/13]