408 Australian Government to Commonwealth Relations Office

Cablegram 59, CANBERRA, 5 March 1948, 5.30 p.m.

SECRET

Your H43. H.44.

OCCUPIED COUNTRIES We opposed at Havana the United States proposal for amendment to Article 99 of the draft Charter, on the ground that we could not support any proposal which would oblige us to give most-favoured-nation treatment to Japan. We considered that any proposal concerning the application of the Charter provisions or G.A.T.T. should be a matter for discussion by the F.E.C.[1] in the case of Japan and the Allied Control Council in the case of Germany.

We would feel obliged to maintain the same attitude to such a protocol as you suggest since it does seem to overlook the reference of the matter to the F.E.C. and the A.C.C. which we consider is a proper first step in any proposal of this nature. We should consequently feel embarrassed if such a proposal were introduced into the I.T.O. Conference. It seems to us that that Conference is not the proper place to discuss the future trade relations of Germany and Japan, at least until the question has been fully discussed by the appropriate policy-making bodies having competence over such areas.

It may be that United States feel that reference to the F.E.C. may involve difficulties with the U.S.S.R. who may veto any proposal of this nature, but this fear, we feel should not be regarded as justifying a departure from the usual procedure, which we have consistently advocated.[2]

[1] Far Eastern Commission.

[2] Subsequent documents on Australia's refusal to grant most-favoured-nation treatment to Japan are published in Volume 14, Documents 344 - 9. In August 1949 Australia softened its attitude towards West Germany and agreed to invite it to attend the tariff negotiations in September 1950.

[AA : A1068, ER47/1/34]