TRADE AND EMPLOYMENT CONFERENCE : FIRST PROGRESS REPORT

I. INTRODUCTION

1. The following report reviews the work which has been done both
in Australia and overseas since the departure of the Australian
Delegation to the Trade and Employment Conference in London and
Geneva.

[matter omitted]

III. EXCHANGE OF TARIFF REQUESTS WITH OTHER COUNTRIES

5. Detailed lists of requests for concessions in the Australian
tariff have so far been received from the United States, United
Kingdom, France, Norway, India, South Africa, Czechoslovakia,
China and Chile. No requests have yet been received from Brazil,
the Benelux Customs Union, Cuba or Lebanon. Both Canada and New
Zealand have stated that they do not propose to make requests upon
Australia.

6. When received, the requests are investigated by the Industries
and Tariff Revision Branch and by the Trade Treaties Branch of the
Department of Trade and Customs. Each tariff item is considered in
detail, all relevant information is collated (including the views
expressed in reports of the Tariff Board) and where necessary
special industry investigations are made. After inter-Departmental
examination, the requests are considered by the Cabinet Sub-
Committee on Trade and Employment which determines the
instructions to be given to the Delegation.

7. It must be emphasised that the instructions given by the
Cabinet Sub-Committee in no way commit the Government to make any
tariff change. They merely provide the Delegation with a
negotiating brief to use as a guide to their discussions with
other countries on a non-committal basis. Before Australia is in
any way committed, it will be necessary for the Government to
consider the outcome of the negotiations and to decide whether or
not the tariff concessions which we are asked to make are fully
balanced by the concessions which we will receive from other
countries.

8. Up to the present time all of the U.S. requests have been dealt
with in this way together with most of the requests made by
France, Norway, Chile and some of the requests by the U.K., South
Africa and India.

9. In considering these requests, the Sub-Committee has had in
mind the following principles:-

(a) Account has been taken of the reciprocal concessions which we
may obtain as a result both of our direct requests and of the
operation of the Most-Favoured-Nation principle-particularly the
concessions we hope for in the U.S.A. tariff. The offer of
concessions by our Delegation within the limits authorised for
negotiation will of course depend on the responses which we
receive to our requests on other countries.

(b) Concessional offers authorised for negotiation have been
relatively generous where revenue rather than protective
considerations are involved-e.g. elimination of primage [1],
reduction or elimination of duties on goods of which there is not
and is not likely to be any Australian production.

(c) In the case of protective items, negotiation of concessions
has been authorised where it is believed that the industry can
operate satisfactorily with a lower tariff either because of
increased technical efficiency since the duties were last fixed or
because the balance of Australian and overseas costs has moved so
substantially in our favour as to justify some degree of tariff
revision.

(d) In an important number of cases the Delegation has been
advised that rates of duty cannot be bound and that we must retain
the right to increase them for protective purposes at a later
stage and after report by the Tariff Board.

10. Although in cases of doubt the Sub-Committee has adopted a
conservative attitude, it fully realises that under a policy of
full employment the pressure of social and private needs on our
labour and other resources will continue to be heavy, and that
therefore in the interests of our national development we should
pursue a more selective policy towards the sheltering of high-cost
industries behind prohibitive or near-prohibitive duties. The Sub-
Committee also realises that the course of negotiations may reveal
some cases in which the present instructions to the Delegation
will need to be revised if we are to obtain worthwhile concessions
from other countries. It will be particularly important to ensure
that the maintenance of unnecessarily high protection for
Australian manufactures does not prevent the negotiation of tariff
reductions by other countries which would open up export
opportunities for the Australian manufacturing industries
themselves, many of which have considerable export prospects if
the conditions of international trade are satisfactory.

11. Lists of requests for tariff concessions have already been
presented by Australia to the Governments of the United States,
France, Norway, Belgium, Czechoslovakia, South Africa and Malta.

Further request lists will be ready for presentation to India,
Ceylon and Netherlands in the next week or so and the balance will
follow shortly thereafter. It is not proposed at this stage to
lodge requests on Canada and New Zealand, while the position with
respect to requests on the United Kingdom hinges on the question
of a basis for agreement and has still to be clarified.

The Australian requests have been prepared following research into
past trading relations, statistical analyses and industry
consultations. In addition, the lists of requests exchanged
amongst countries other than Australia are being closely examined
in order to gauge how far Australia may benefit under the Most-
Favoured-Nation principle.

IV. CONCLUSION

12. The position of the negotiations is still completely fluid.

The British Commonwealth talks in London provided a useful
opportunity for the exchange of views and revealed a welcome
measure of agreement on many topics. The bigger issues will emerge
only gradually at the Geneva Conference-particularly when the
initial responses of U.S.A. and other countries to our requests
are made known, and the negotiations reveal the bargaining
attitude of the various parties on particular items. In the
meantime our best course is to continue participation on an
exploratory basis, avoiding all commitments, implied or expressed,
which might tic our hands in the course of the negotiations or in
making a final decision.

V. SUBMISSION

Submitted for the information of Cabinet.

J.B. CHIFLEY
for the Cabinet Sub-Committee on Trade and Employment