Your telegram of 25th September No. 312 [1] has received very
careful consideration.

The United Kingdom Government fully realise that the establishment
in Australia during the war of new industries lacking tariff
protection raises difficult problems for Australia and they would
not wish to insist on an unduly rigid interpretation of rights
under the Ottawa Agreement where such an interpretation might in
the present circumstances unwarrantably embarrass the plans of the
Commonwealth Government for an orderly transition to a well-
balanced peacetime economy.

2. The Commonwealth Government for their part will, we feel sure,
equally realise the vital importance, in the interests of our two
countries, of the earliest possible restoration and expansion of
the United Kingdom's export trade which alone can maintain the
position of the United Kingdom as a great import market. The
United Kingdom Government recognise that the arrangement suggested
in paragraph 8 of your telegram is intended for temporary
application only but they would be bound to feel great difficulty
in the present circumstances in accepting an arrangement expressed
in general terms, since this in effect would commit them to waive
for an unspecified period, and with no indication of the range of
industries in question, or degree and form of protections which
are contemplated, the rights secured by the Ottawa Agreement in
regard to the imposition of protective duties.

3. While, therefore, the United Kingdom Government are anxious to
go as far as possible to meet the Commonwealth Government in this
matter, they feel that the only satisfactory approach to the
problem would lie through the consideration between us of each
individual case. They would suggest, therefore, that as and when
the question of giving emergency protection to any particular
Australian industry arises, the Commonwealth Government should
indicate to the United Kingdom Government the precise degree and
form of protection envisaged. The United Kingdom Government would
then as a matter of urgency, consider sympathetically in
consultation with the appropriate United Kingdom industry, whether
they could, in the particular case in question, forego temporarily
their rights under the relevant articles of the Ottawa Agreement.

4. In view of the observations of the Tariff Board quoted in your
telegram under reference we should hope that, in the majority of
cases, the emergency protection proposed would be such that we
could agree for the present to forego full Tariff Board enquiries.

Our understanding would be that in such cases the question would
be reconsidered after a period to be agreed between us, with a
view to full Tariff Board enquiries being instituted.