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31 Statement by Evatt at Prime Ministers' Meeting

LONDON, 13 October 1948


1. In the preliminary remarks which I made on Monday I expressed
my admiration for the clarity of the analysis which the Chancellor
of the Exchequer had given us as well as for the achievement which
it represented. I may say that subsequent more detailed
consideration of the content of that statement has confirmed our
first impressions of its quality.

[matter omitted]

4. This being said I should like now to turn to one or two major
issues with which the Paper deals. Firstly, we have studied, with
great interest, the plans which the United Kingdom has for its
purchases abroad by 1952/1953. Naturally we have looked to the
United Kingdom market as certainly the most important market for
Australian products, and we have viewed with concern the
limitations which it is been found necessary to impose on United
Kingdom purchases abroad and particularly in Australia. I am bound
to say that we do not find very great comfort in the forecasts
embodied in this Paper of those purchases in 1952/1953. I think I
am right in saying that you do not anticipate any very substantial
increase in your overall purchases, and I also believe that you
expect your future purchases in Australia, to remain at about the
present level. At the same time you have indicated that you wish
us to increase our production for you of certain staple foodstuffs
and raw materials. In these circumstances it is apparent that we
would have to expand production of the classes of goods which you
need at the expense of some of our smaller primary industries. The
industries concerned, while not large in the total value of their
production, are of very great importance in the structure of our
agricultural and rural life, and, furthermore, they are industries
whose market has been in the past almost exclusively in this

5. You will, I hope, forgive me for saying that in this respect
the picture to be drawn from the forecasts which have been
presented to us in a very unattractive one, and, indeed, one in
which my Government, for economic as well as for political
reasons, would be unwilling to concur.

[matter omitted]

extraordinary United States' aid by 1952/1953. It does not,
however, hope to establish normal trade and payment relations
between dollar countries and the rest of the world. It assumes
that after 1952/1953 continued restrictions against United States'
products will be maintained. Despite this, the Chancellor
emphasised in his statement to us on Monday the hope that the
United Kingdom has of the full restoration of multilateral trade.

He apparently, therefore, anticipates that at some stage it would
be possible to remove restrictions against dollar purchases. We
would be glad to hear him amplify his views as to the steps by
which this result would be achieved and any views he has as to the
period over which progress towards their removal must be spread.

It would also be of interest to know what reaction is expected
from the U.S.A. to prolonged continuation of discrimination
against their exports, particularly in view of various
undertakings to the contrary in international agreements.

14. The fact that discrimination against U.S. goods is expected
still to be necessary after 1952 emphasises the fact that further
measures including action by the U.S. within its own economy may
still be necessary if multilateralism is to be restored. It would
be interesting to know whether the Chancellor has views as to how
the consideration of such measures is to proceed.

15. judgment as to the speed and certainty with which
multilateralism is likely to be restored affects measures which
our Governments may be called upon to take in the immediate
future. The United Kingdom Government has suggested to Australia,
as well as to other sterling area countries, that we should
undertake developments designed to supply the United Kingdom with
goods previously purchased from the Western Hemisphere. We
ourselves have plans of the same kind to reduce our own dependence
on supplies from dollar countries. Many of these developments are
natural and economic. They fit into the normal developments which
would in any case occur. In some cases it may mean lifting a
project in the order of priority so as to give it attention at an
earlier date than it would otherwise have been considered.

17. But in some cases projects which have been brought forward are
economic only if we assume a long continuance of restrictions
against dollar goods. There are products which at present the
United Kingdom of necessity buys from dollar countries which we
could produce although not at prices which would be fully
competitive with the normal dollar sources. For some developments
this might not be important. For others major diversions of
productive effort, and major capital developments may be
necessary. It would clearly be unwise for us to embark on
developments of this character if in the long run after capital
had been expended, and people's lives redirected in new channels
we were to find the market on which we had relied disappear in
favour of the original and possibly cheaper source.

18. My Government is anxious to expedite development in Australia
to the maximum in ways which will assist the United Kingdom.

Insofar as this can be done for industries which are natural and
economic to Australia, we will of course proceed with these as
part of our programme of development, but in cases where
production is of a kind which would compete with normally cheaper
supplies from dollar countries, it must be clear that we could not
embark upon major developments without very precise long-term
assurances as to the security of our market here.

[matter omitted]

[AA: M448, 1371]

[13.] The plan, as we have it outlined to us, aims to do without
Last Updated: 11 September 2013
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