Memorandum of Conversation, by Mr. John H. Fuqua of the Division of Trade Agreements

Participants: Mr. Officer,
Mr. Hawkins,
Mr. Minter,
Mr. Fuqua.

We went over with Mr. Officer steps to be taken in the exploratory trade-agreement discussions. It was pointed out that two aspects of the situation require attention, as follows:

1. The first problem is to determine whether definitive negotiations would result in a mutually satisfactory agreement. This involves an examination of the General Provisions, and of the nature and extent of the concessions to be offered by each country.

Copies of our standard general provisions23 were given to Mr. Officer with the suggestion that he study them and that whenever he is ready he will come to the Department and go over them with us. (He later telephoned to say that they are acceptable.)

In regard to the schedules, we said that we had given some consideration to the list of products recently submitted to us on which Australia seeks concessions from the United States. Except in the case of butter, we were not, of course, in a position to speak definitively in regard to them. In regard to butter, we could safely say that, in accordance with the chief-source rule, the granting of a concession on this product to Australia is precluded. Mr. Officer said that he had expected this and raised no question on it. With reference to wool, we stated that a concession on this product would, of course, involve difficulties, and we were not now in a position to indicate even tentatively what could be done. In view of the difficulties involved in granting a wool concession, it is impossible to consider this question as an isolated one. Whether any concession could be granted would depend upon a number of attendant circumstances, notably the nature and extent of the concessions which would be offered by Australia [Page 135] for the benefit of American exports. For this reason, it seems essential that we obtain from Australia an indication of how far it was prepared to go in granting concessions to us and suggested that, with this end in view, we submit to Mr. Officer in the very near future a list of our requests. When we had received the Australian Government’s reply to our requests, we would be in a position to consider the question of a concession on wool in the light of the benefits to American interests which would result from the agreement. Mr. Officer agreed to the procedure outlined above.

2. In the event that it is found that the initiation of negotiations would result in a mutually satisfactory agreement, the question of the timing of the negotiations would have to be considered. We pointed out to Mr. Officer that, to announce negotiations of such a controversial character between now and next fall might present serious difficulties. Consequently, if a satisfactory basis for negotiations were found to exist, it might be necessary to consider whether actual negotiations or any announcement in regard thereto should not be deferred. We said that we did not need to consider this question now, however, as there is no need for doing so until the problem of finding a basis for negotiations had been disposed of.

Mr. Officer expressed serious concern over the possibility of any delay in making public announcement of negotiations. He said that Canada had succeeded in bringing about negotiations with us simultaneously with our negotiations with the United Kingdom and that it would create political difficulty in Australia if the Australian Government were unsuccessful in doing likewise. More specifically, he said that the Australian Government would be seriously embarrassed if an announcement of contemplation of negotiations were not made before the Australian Parliament meets, presumably about March 15. Mr. Officer agreed, however, the “timing” question does not arise until the question of finding a basis for negotiations has been disposed of and indicated that since the matter had been discussed only tentatively and informally he did not think it necessary even to bring the matter to the attention of his government at this time.

We impressed upon Mr. Officer the importance of avoiding any publicity whatsoever in regard to these exploratory discussions. He said that he would do everything possible to prevent leaks and would telegraph his government again stressing the importance of this. He indicated, however, that despite these precautions he could not be absolutely sure that no leaks would occur at the Australian end, since Ministers, when questioned in Parliament, might hedge and evade all they could but still be unable to deny that conversations are proceeding.

  1. For text of original standard general provisions, see Foreign Relations, 1935, vol. i, p. 541. Minor changes in these standard provisions were made from time to time.