ARTICLE 24 I.T.O. CHARTER

1 Your 1615. You may give Clayton the strongest assurances that
the position of the Australian Government on Article 24, paragraph
2 of Draft Trade Charter is not influenced in the slightest by the
failure of United States to support our eligibility to participate
in the election of a thirteenth director of the Fund, and that the
Government fully appreciates the attitude taken up by the United
States in relation to the fourteenth directorship.

2. The objection of the Commonwealth Government has been confined
to last sentence of paragraph 2 [1] which was inserted on the
initiative of the United States at a comparatively late stage in
the Geneva discussions.

3. For your own information, acceptance of this clause by the
United Kingdom was gained in the course of bargaining on
relaxation of non-discrimination clauses. A French delegate
intimated confidentially to our delegation that, while they were
unable to oppose the provisions openly themselves, they would be
glad to see us keep up our opposition at Havana.

4. The clause as it stands places the administration of one of the
vital provisions of the Charter under the ultimate control of the
Fund, on which the United States has a predominating influence. We
have maintained that while the Fund should be fully consulted by
the Organisation on matters such as exchange restrictions which
affect its special responsibilities, it would be wrong in
principle for the final decision on issues arising under the Trade
Charter to rest with another Organisation parallel but not
superior in status.

5. We have had in mind that the still active opposition in
Australia to the Bretton Woods agreements might easily extend to
the trade Charter if it were found that a key clause in the latter
document was to be administered in the last resort by the Monetary
Fund.

6. Since under our proposed amendment it is provided not merely
that the Fund would have a right to be consulted but that special
weight would be given to its opinions we think that the Fund would
have all the protection it could reasonably ask for its own
interests and status.

7. Again, if the Fund were given the responsibilities prescribed
in paragraph 2 amended as we propose [2], we cannot see how a need
would arise for the Trade Organisation to create any additional
machinery or Organisation for handling matters arising in this
connection.

8. We think that besides giving Clayton the assurance referred to
in first paragraph above you might put it to him that as members
of the Fund we are anxious to promote its success; but we feel
that more harm than good might be done by attempting to expand its
authority at the expense of other organisations.

9. You could emphasize that while we recognise Clayton's own
difficulties with Congress, we also have a Parliament and a people
which have been induced to accept the Bretton Woods agreements
only with great difficulty. We are most anxious that the prospects
of Australian adherence to the Trade Charter should not be
prejudiced by an unnecessarily close tying up of the Charter with
the Bretton Woods agreements. At the same time we feel that in our
proposed amendment we have gone a long way towards meeting the
United States point of view.

10. It also seems necessary to make clear that in proposing our
amendment we have no idea of requiring machinery to be set up
within the Trade Organisation which would duplicate machinery
available to the Fund.

11. A statement of our attitude on this issue is contained in
United Nations document E/PC/W/T/279 which was circulated by our
delegation at Geneva.

12. Would you please arrange for your cablegram 1615 and this
reply to be repeated to High Commissioner, London and Trade
Delegation at Havana.