Memorandum by Mr. William A. Fowler of the Division of Trade Agreements

Conversation: Mr. H. O. Chalkley, Commercial Counselor of the British Embassy;
Mr. Grady;30
Mr. Hawkins;31
Mr. Culbertson;32
Mr. Fowler.

Mr. Chalkley called at Mr. Grady’s request for the purpose of discussing the progress of the exploratory studies of trade relations between [Page 667] the United States and the United Kingdom. He was informed that our studies had progressed to the point where we believed that a comprehensive trade agreement of great value to both countries could be consummated provided the British Government would be prepared to consider modifications of imperial preferences affecting a very substantial portion of our export trade with the United Kingdom. Mr. Chalkley was assured that this did not mean that we would request the abolition of imperial preference, but that we would like to have the assurance that requests for modifications of preferences on particular commodities of major interest to us would be the subject of discussions during the course of the negotiations. If his Government should take the position that the question of imperial preferences would have to remain outside the scope of the discussions, it was pointed out that only a very limited agreement, if indeed any agreement at all, could be negotiated.

During the course of the ensuing discussion, it was pointed out that it would be possible to provide for deferred concessions in respect of products now covered by the Ottawa agreements33 to take effect when those agreements expire in August 1937; and that unless it is renewed, the Trade Agreements Act will expire before that time.

Mr. Chalkley was told frankly that we were somewhat concerned about the preliminary negotiations between representatives of his Government and of the Governments of certain of the Dominions reported to be about to take place in London. It was pointed out that we would regard it unfortunate if these conversations should result in commitments to the Dominions which would make it impossible for the British Government, later on, to entertain our requests in respect of particular products of interest to us which are now covered by the Ottawa agreements, and hence preclude the possibility of a really worthwhile agreement with the United States.

Although Mr. Chalkley did not show much enthusiasm in regard to these suggestions, but on the contrary expressed skepticism as to the extent to which we might be prepared to reduce our tariff on British goods (he said that his people had been thinking in terms of six or seven concessions from us), he gave the impression that he might expect his Government to agree to include within the scope of the negotiations the consideration of particular rates or preferences in those cases in which we can show that they are “excessive” or have caused a diversion of trade. He also gave the impression, however, that it was his opinion that his Government would not be in a position to know what to do about preferences in a trade agreement with the United States until it knows on what basis the Ottawa agreements will be extended.

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As to the next step to be taken, Mr. Chalkley stated that it was his understanding, based on reported conversations in London between Mr. Ryder34 and Sir Frederick Leith-Ross,35 that we would prepare both a list of requests for concessions and a list of possible concessions to the United Kingdom; and that in view of this understanding his Government had undertaken no studies of its own but had awaited the results of our study. The unusual nature of such a procedure was pointed out to Mr. Chalkley, and it was explained that in advance of public hearings it would be very difficult if not impossible for us to give them, even informally, a list of specific concessions which we might be able to grant under a trade agreement with the United Kingdom.

After some further discussion, it was agreed that we would continue our studies with a view to presenting informally through the Embassy to the British Government, as soon as possible, a tentative but fairly complete and detailed list of the products on which we would request concessions and an indication of the nature of the concession (reduction or binding of duties or preferences); together with a general statement in regard to the concessions which we might be in a position to grant. Mr. Chalkley offered to come in again for the purpose of suggesting how this material might be set up in such a way as to be most helpful to his Government in reaching a decision as to whether a promising basis exists for a trade agreement.

  1. Henry Grady, Chief, Division of Trade Agreements.
  2. Harry Hawkins, Assistant Chief, Division of Trade Agreements.
  3. Paul T. Culbertson, Assistant Chief, Division of Western European Affairs.
  4. Signed August 20, 1932, British and Foreign State Papers, vol. cxxxv, p. 161.
  5. Oscar B. Ryder, Commissioner, U. S. Tariff Commission; American representative on League of Nations Joint Committee for the Study of Clearing Agreements in 1935. See Foreign Relations, 1935, vol. ii, pp. 1 ff.
  6. Chief Economic Adviser to the British Government.