611.4131/2560
The British Ambassador (Halifax) to the Secretary of State
My Dear Mr. Secretary: You will remember that soon after the initiation in November of the informal discussions which have been proceeding on the possibility of a supplementary trade agreement between our two countries certain suggestions as to a basis of negotiation were made. It was proposed inter alia that, as a counterpart to certain named concessions to be made by the United States, the [Page 120] United Kingdom should reduce the margins of Imperial preference on raisins, prunes, canned peaches and pears and fresh apples and pears. It was also proposed that the United Kingdom should undertake to reduce the existing margin of preference on tobacco in 1942.
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- The United Kingdom Government, who are most anxious to maintain and expand their trade with the United States, have carefully considered these proposals. As a contribution to a satisfactory agreement they would be prepared to entertain the suggestion for a reduction in the tobacco preference on the expiration of their existing obligation to maintain it until August 1942, and they trust that you will share their view that the present informal discussions should be continued with a view to finding as soon as possible a mutually satisfactory basis of negotiation.
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- With regard to the preferences on the dried, canned and fresh fruits mentioned above, the United Kingdom Government asked me to point out that they are not free to reduce the margins of preference which are guaranteed to the other Empire Governments concerned without the consent of those Governments. Nor are they in a position to compensate those Governments for the loss of valuable trade in the United Kingdom market which any waiver of their contractual rights would inevitably involve. If, however, the United States Government were disposed to enter into negotiation with some or all of those Governments, the way would be open for a series of arrangements analogous to those made in 1938 between the United States, the United Kingdom and Canada, with results which the United Kingdom Government believe to have been satisfactory to all the parties. Should the United States Government be prepared to consider negotiations on such a basis, the United Kingdom Government would for their part be glad to do everything in their power to contribute to a successful consummation.
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- They feel that a series of agreements covering the widest possible range of trade between the United States and the various parts of the British Commonwealth would make a contribution of vital significance not only to the solution of some of the difficulties created by the war but also to the reconstruction of world trade after the war on a sound and liberal basis. Subject to the views of the United States Government, they would suggest that the wider possibilities envisaged above should be kept prominently in mind in future discussions on the feasibility of a supplementary agreement between the United Kingdom and the United States.
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- Should you see no objection, the United Kingdom Government would like to communicate copies of this letter to the Governments of Canada, Australia, New Zealand, the Union of South Africa, India, Burma; Southern Rhodesia and of the Colonial Empire.
Believe me [etc.]