We have been considering the position of our proposed Trade
Agreement with the United States of America, and the possible
developments arising out of the present Washington conversations
between United Kingdom and United States of America.

The advices in your telegram 1094 of 25th September [1] indicate
reluctance on the part of the United Kingdom to proceed with
bilateral trade talks at the present time. We feel that
Australia's position has not been given full weight nor do we
agree as to the tactical merit of shelving the bilateral
negotiations at this stage.

It has to be remembered:

(a) That United Kingdom and Canada already have agreement with
United States of America.

(b) That Australia assisted in facilitating agreement between
United States of America and U.K.

(c) That the conclusion of a bilateral agreement between United
States of America and Australia will not prejudice a subsequent
broader or a multilateral agreement and may actually assist in
such objective.

(d) That unless agreement can be completed shortly bargaining
power of Australia will be materially impaired.

In the circumstances, every endeavour should be made by McCarthy
and Fletcher [2] to reach an agreement as soon as possible. You
will, of course, actively assist them.

It is expected by us that, in view of our past co-operative
attitude, United Kingdom and Canada will be prepared to make
concessions necessary to our agreement with United States of
America.

New Zealand is being advised of our views regarding existing
preferences granted to Australia by New Zealand. [3]

On Raisins, we would probably be prepared to concede a reduction
to 1/2d. per lb. provided United States of America makes a
satisfactory response on butter in her agreement with New Zealand
and the proposed United States agreement with Australia is
acceptable to us. However, you will do your utmost to obtain the
most favourable terms and before agreement is finalised, Cabinet
here will be asked to approve of all details.

Customs Department have forwarded schedule to Fletcher by air
mail, September 17th, under cover of Trans Note No. 2 [4] and we
take it that he and McCarthy can proceed immediately towards
completion of negotiations.

Please inform Law of decision to continue with negotiations which
have already been very protracted. [5]