Memorandum of Conversation, by the Chief of the Division of Trade Agreements (Hawkins)

Participants: The British Ambassador;
Mr. A. E. Overton;29
Mr. Keith Officer;
Mr. Francis B. Sayre;
Mr. John D. Hickerson;
Mr. Harry C. Hawkins.

The Ambassador stated that he wanted to take up again the situation with respect to the negotiation of a trade agreement with Australia. He said that the Australian parliament will reconvene shortly after Easter and the Government may be asked embarrassing questions in regard to the justification of giving up of preferential treatment in the United Kingdom when it has no compensatory benefits to show in the form of a trade agreement, or a prospective trade agreement, with the United States. The Ambassador said that it would greatly relieve the difficulties of the Australian Government if it were possible for us to indicate definitely just when we would be in a position to announce trade-agreement negotiations with Australia. He said the Australian Government is anxious that such an announcement be made before, or at least concurrently, with the signature of the agreement between the United States and the United Kingdom. He asked whether we could not give definite assurances that this would be done.

Mr. Sayre replied that we were always ready, of course, to consider any proposition which the Ambassador wished to present. Before giving an answer to the question presented he would wish to discuss [Page 144] it fully with his associates and possibly the Secretary, and when this had been done, he would let the Ambassador know this Government’s position. He said, however, that while he was not attempting to give an answer now, certain considerations bearing upon the question at once came into his mind and he would give the Ambassador the benefit of his off-hand observations. In the first place, he hoped that the Ambassador and the Australian Government realized that we are just as anxious to conclude the trade agreement with Australia as is the Australian Government; that Australia is an important commercial nation with which our trade relations represent interests of considerable magnitude; that the trade-agreements program has as its ultimate objective the improvement of trade relations with all of the important commercial countries of the world; and that this program would not be complete if an agreement were not consummated with Australia. He went on to say, however, that the question of when negotiations should be instituted is one of the greatest importance. The situation in this country at the present time is such that if we take on too great a load we may jeopardize not only an Australian agreement but the agreement with the United Kingdom and the whole trade-agreements program. He said that while we want to go ahead as soon as the propitious time arrives, we cannot foresee just when that time will be. We will have to watch developments and move when the time is ripe. Hence it is impossible to state now that an announcement will be made at any particular time in the future because we cannot determine in advance when the moment will be opportune. An undertaking now to make the announcement at any particular time would be more or less meaningless because if when that time arrived, it were found that developments were such as to make the announcement unwise, Australia would not want us, in its own interests and in the interest of the successful conclusion of the agreement with the United Kingdom, to go ahead. Mr. Sayre repeated that these were his off-hand observations and did not constitute an answer to the question presented; that the answer would be communicated to the Ambassador after Mr. Sayre had had an opportunity to think the matter over and discuss it further with his associates. He promised to get in touch with the Ambassador in the course of the next few days.

April 2, 1938.

Today (Saturday, April 2) the British Ambassador called again at Mr. Sayre’s request. Mr. Sayre said he had asked him to come in in order to tell him that he had followed out his intention of discussing with his associates the question of the answer to be made to the Australian Government, and that his view had been confirmed that [Page 145] there was really no other answer to make than that which he had personally indicated at the previous interview. Mr. Sayre reiterated this answer by saying again that we are very anxious to enter into negotiations with Australia at the earliest feasible opportunity, but that at the present time it would not be wise to do so and that we could not make prior commitments as to when it would be found wise. The British Ambassador evinced no surprise at this and showed that he understood the answer by resuming it in the following terms: that we found it neither wise nor feasible to make a commitment as to when we would be prepared to announce the opening of negotiations. Mr. Sayre emphasized again the fact that we are anxious to take advantage of the earliest desirable opportunity to do so and said that when the Australian officials came here Easter Week, we would seek to make our position and intentions clear to them.

  1. Second Secretary of the British Board of Trade and member of the British Trade Delegation in the United States.