The Second Secretary of the British Board of Trade (Overton) to the Commercial Counselor of the British Embassy at Washington (Chalkley)38
Dear Chalkley: I enclose our reply39 to the memorandum handed to you by the United States authorities on 2nd March. In communicating it to them we should be glad if you would say how much we appreciate the remarks made by the Assistant Secretary of State when he handed the memorandum to you. It was in no spirit of oriental bargaining that we considered it here. We have gone as far as we possibly can on the items in the United States lists. We have ruled nothing out of consideration purely on the ground that (a) the United States is not the principal supplying country, (b) the reduction asked for exceeded 50 per cent, of the existing duty, or (c) a transfer from the dutiable to the free list is involved, although the United States Executive is not itself, we understand, in a position to offer such concessions. The fact that we have been unable to go further towards meeting the United States’ requests arises from the inherent difficulties of which you are well aware and which we have tried to explain in our reply. For example, the attitude of some of the Dominions is bound to be affected by the difficulty they have experienced in developing their exports to the United States. The United States authorities will realise that outlook and opinion vary greatly in the different Dominions and that proposals which might serve as a basis of discussion in some would be entirely unacceptable in others.
We appreciate the political importance which would attach to a trade agreement between this country and the United States. We also concur in the view that an agreement of very narrow scope would be scarcely worth negotiating. But we think that the present United States proposals go far beyond what is politically and economically possible both here and in the Dominions. We are not of course, in a position to judge the political and “publicity” value within the United States of America of the proposals which, as indicated in our reply, we should be prepared to put forward to the Dominions, but they go very much further than anything we have previously contemplated in negotiations with a foreign country. We should have thought that a good deal might be made of this (it certainly will be in this country) and a good deal also of conventionalisation, the practical value of which, as it seems to us, has never been fully recognised. [Page 24] It assumes a greater significance if our duties on the items in the United States’ memorandum are compared with their own on the same items. Such a comparison shows that our own duties on these goods, which are for the most part staple exports from the United States, are in the main on a much lower level than the American.
In view of the fact that Dominion Ministers are already beginning to arrive, it would be helpful if we could as soon as possible have the United States replies on the matters on which further information is sought and learn whether they would desire us to approach the Dominions on the lines we now indicate.
We have not yet had the detailed United States desiderata on the one other “essential” item, namely, hog products, and we should wish to have them at the present stage in order to see whether they are practicable. It would be no good raising matters with the Dominions if there is afterwards going to be an impasse on some other point.
We should like to see what the picture as a whole looks like before approaching the Dominions. For that purpose we should be glad to have some amplification of the information in the Ambassador’s telegram No. 85 of 19th March, with perhaps figures, showing the value of the imports from the United Kingdom likely to be affected by the various reductions which the United States have got in mind.
With regard to the note on raisins in our reply, you may think it well to explain orally that having regard to the very substantial interest which Greece and Turkey have in this commodity and to the fact that it is impossible to distinguish between the various classes of dried fruit which are comprised in this tariff specification, it seems doubtful whether the United States would derive any substantial benefit from a reduction in the duty.