The Australian Government is much perturbed at the position of the
Trade Agreement discussions in Washington because of the time now
available for completion of the negotiations. It is apparent that
further delay will make impossible the negotiation of an agreement
between Australia and the United States of America before the end
of January, by which time, we are advised, the Agreement should be
out of the way in view of the commencement of the Presidential
Election Campaign.

2. In this connection your attention is invited to the relevant
passages of your cablegrams D.467 [2], 244 [3] and 272 [4] and our
cablegrams 199 [5] and 230. [6] You will recall that while you
stated your proposals were not in fact incompatible with bilateral
negotiations and acknowledged our interest in leaving room for
bilateral discussions if this proved desirable, you desired the
bilateral negotiations between Australia and United States to be
deferred pending conclusion of the broader approach by the United
Kingdom to the United States on Article 7.

These talks have now been completed. The Australian Government has
therefore given instructions to its Delegation to pursue
vigorously negotiations for a Trade Agreement without further
delay as unless agreement can be completed shortly our bargaining
power with the United States will be materially reduced. [7]

3. The Australian Government is firmly of the opinion that the
successful conclusion of as many bilateral agreements as possible
between members of the British Commonwealth and the United States
will materially strengthen the position of the Empire when Article
7 has been more fully discussed. In this connection it is our
understanding that the two other Dominions concerned are equally
interested in this bilateral discussion.

4. We gather from our representatives at Washington that you did
not contemplate continuing bilateral discussions with the United
States, but the Australian Government would appreciate advice in
confirmation of this.

Having in mind the assistance we were able to render you in making
your Agreement with the United States in 1938, at which time we
had an understanding that you would assist us in the exploratory
discussions then in progress, we would be grateful if you could
see your way to advise the State Department that you welcome our
bilateral negotiations and are ready to give all possible
assistance to facilitate agreement.

In this latter connection we would appreciate your formal
concurrence to the modification of United Kingdom preference in
Australia on those tariff items which have been under discussion
by Australian and United Kingdom officials.