Your S.132. Extraterritorial treaty. [1]

1. Minister desires you to negotiate treaty at Chungking and he
wishes you to know you have his complete confidence in respect of
this matter. He desires a short treaty dealing with abrogation of
extraterritorial rights, avoiding the contentious clauses six and
eight of the United Kingdom draft. [2]

2. The views of other Dominions, except New Zealand, indicate they
also will negotiate separate treaty without inclusion of these
clauses. [3]

3. At the same time there should be provision in Australian treaty
for future negotiations without definite time limit for trade
arrangements so important to our respective countries.

4. It is suggested negotiations commence without delay, with view
to simultaneous announcement of U.S.A., United Kingdom and
Australian signatures.

5. As to your question of interpretation Article 1, paragraph 2
[4], it should be made very clear, to remove any doubts, that
British subjects as well as protected persons must belong to
territories in respect of which treaty is made. This point should
be raised with United Kingdom negotiators.

6. You will of course keep us informed of course of conversations
and telegraph your draft texts before final commitments.

7. We are telegraphing London for full powers for you to be sent
direct to Chungking. [5]