611.4781/95
The Chairman of the United States Tariff Commission ( O’Brien ) to the Secretary of State
My Dear Mr. Secretary: I have your letter of August 917 with its enclosures. I have gone carefully through the proposals of the Prime Minister of Australia and preliminary responses made by our Consul General there.
You ask for comments on the proposal and in response I am compelled to say that it does not appear to me nor to Mr. Page with whom I have been able to discuss the situation, as at all feasible. You have, of course, observed that the items proposed in the communication of the Prime Minister are exclusively agricultural in origin. The present condition of our agricultural population would scarcely be helped by the removal of duties on competing products from Australia. Under different circumstances, as you are well aware, the removal of the duties on wool and perhaps also on beef might be justified economically. I may remind you that when these products were on the Free List the domestic producers, with few exceptions, fared better than they have done under the high duties that have existed since the Tariff Act of 1922.18
We realize, of course, that the arguments against accepting the proposals of the Australian Prime Minister are at present in large measure political rather than economic, but political arguments in this instance have a very high degree of economic significance.
The further proposal of the Australian Prime Minister that we should limit the exports of our agricultural products to the United Kingdom and to the Continental countries of Europe in order to enable the Australians to find a better market for their competing products in those countries is, so far as I am aware, unexampled in commercial negotiations. We could not, in my judgment, safely give serious consideration to such a proposal.
I am also deeply impressed with the fact, to which the Consul General has already called attention, that in order to secure these very notable advantages in their export trade to the United States, the Australians offer absolutely nothing in return. They vaguely propose tripartite agreements under which conceivably the United States might at some future date find some advantage. Such an advantage, however, is not specified in the Prime Minister’s communication; it is merely suggested as a vague possibility.
[Page 844]May I add, in conclusion, that his proposal that we should receive without duty, or at least at a nominal rate of duty, 50,000 tons of meat and 50,000 tons of butter from Australia, if adopted by this country, would completely upset the market conditions that the Agricultural Adjustment Administration has been attempting to stabilize.
I include with this the duties on the list enumerated by the Prime Minister as requested in your letter.
If more specific comments on particular aspects of the proposal are desired we shall be glad to prepare them for you.
Very sincerely yours,