Your I.T.O. 241 and 250-
Cabinet Sub-Committee considered your telegram in detail at
considerable length and expressed the following views:

[matter omitted] [1]

2. The preamble to your proposed letter to the United Kingdom was
thought satisfactory.

3. It was considered that specific mention should be made of
United Kingdom preferences in New Zealand as well as those
operating in South Africa and India. Sub-Committee fully
appreciated purely bilateral aspect of Australia - New Zealand
trading relations but the result of negotiations must be assessed
on a multilateral basis and immediate problem is to obtain
balancing concessions from the United Kingdom. The elimination or
reduction of United Kingdom preferential margins in New Zealand on
items such as woollen goods is more important to us than similar
concessions in the other Dominions mentioned in your telegram. It
was agreed, therefore, that you should explore the possibilities
of securing parity of entry into New Zealand for some of the more
important items in which we are directly competitive with the
United Kingdom.

4. Sub-Committee concurred in approach to reduction or elimination
on specified products of preferential margins enjoyed by United
Kingdom in Australia.

5. In regard to United Kingdom agricultural policy, the Sub-
Committee appreciated your efforts to find means alternative to
tariff arrangements which might help to effect a more balanced
arrangement but regarded the suggested United Kingdom undertaking
in this connection as of little or no practical value in itself
and did not consider that it would have any appeal here as a
balancing factor. It was agreed that there would be little point
in your pursuing that line of approach.

6. Similar views were expressed by the Sub-Committee in connection
with your proposal for an understanding relating to United Kingdom
support for intergovernmental commodity agreements.

7. Breen's views were sought as requested by you concerning an
undertaking by United Kingdom in regard to industrial development.

While in sympathy with the idea and ready to enter discussions on
the subject with the United Kingdom in the near future he would
appreciate a clearer idea of what Delegation has in view before
commenting in detail. Meanwhile he will consider the matter
further. Cabinet Sub-Committee, however, was of the opinion that
an undertaking of this kind would not be of any practical or
political significance in the context of the Geneva trade
negotiations.

8. Sub-Committee approved in principle that within the framework
of a reciprocal arrangement with the United Kingdom concessions by
the British colonies might be offset to the extent necessary by
concessions by Australia to the United Kingdom.

9. In the search for balancing factors of practical value the
suggestion was made that it might be possible to secure an
undertaking in relation to the continuance on a favourable basis
to us of long term contracts for the purchase by the United
Kingdom of Australian primary produce which would offer some
security to particular primary industries here for a reasonable
period ahead.

Cabinet Sub-Committee felt that this also would not have much
selling value and it was realised that such an undertaking could
not be included in a tariff agreement and many other difficulties
were foreseen. However, it was thought worthwhile to seek your
comments. [2]