641.0031/133: Telegram

The Ambassador in the United Kingdom ( Winant ) to the Secretary of State

4355. Personal for the Secretary. Department’s 3683, June 14, 6 p.m. Meetings between economic representatives of Canada, Australia, New Zealand, South Africa, India and the appropriate British authorities have been concluded. They were treated in Whitehall as particularly confidential and no publicity of any kind has been given to them.

From reliable sources we learn that the object of the meetings was to give Great Britain an opportunity to explain to the Dominions and India the policy which it proposes to follow with respect that [to?] the [Page 1103] implementation of article VII of the Lend-Lease agreement in the field of commercial policy. It seems likely that in the near future Halifax will be instructed to approach the Department on the subject of discussions regarding postwar commercial policy.

It is believed that the British Government will suggest as a basis for discussion a plan for some form of international union on commercial policy. The development of such a plan in British Government circles was foreshadowed in a confidential memorandum which I brought with me in December dealing with questions relating to article VII. Pasvolsky14 has a copy. The plan is understood to include suggestions for a ceiling on tariffs; possibly some form of agreed reduction of tariffs, regulations governing the use of quantitative limitation of imports in cases where such limitation might be resorted to in emergency conditions, principles to be observed with respect to cases of state trading (as in the case of Russia).

It is believed that other points in the policy of Great Britain are as follows:

(1)
Britain will take the position that, while it welcomes the prospect of reciprocal trade agreements on the basis of our Reciprocal Trade Agreement Act, it will not regard such agreements as constituting in themselves a complete fulfillment of obligations under article VII with respect to commercial policy.
(2)
Britain will reserve the right to resort to limitation of imports during the emergency immediately following the war insofar as it is considered that such limitation is essential to prevent serious disequilibrium in its international balance of payments. It will however propose safeguards against discrimination in the application of such emergency measures, and it considers that the period in which imports may have to be limited will be greatly reduced if a satisfactory international monetary plan can be established.

The timing of conversations on commercial policy was discussed. Great Britain appears to be anxious to put forward its general suggestions on postwar commercial policy to us before negotiations are started on reciprocal trade agreements. The Dominions do not wish to delay unduly the resumption of negotiations on reciprocal trade pacts. It seems probable that the outcome will be that Britain at a fairly early date will put forward its general proposals to us and that very shortly thereafter Britain and the Dominions will be ready to enter fully into negotiations with respect to the reciprocal trade agreements, so that the discussion of both phases of the subject would go on simultaneously.

Beyond some possible tentative understanding on this question of timing no commitments were entered into at the meetings. Britain is now considering its proposals in the light of the informal comments of the economic representatives of the Dominions and India. It is [Page 1104] ascertained reliably that no commitments of any kind were made respecting the contents of the reciprocal trade agreements between us and Britain and the Dominions and it does not appear that such details were discussed at the meetings.

Hence when the draft agreements come up for negotiation Britain and the Dominions will have to consult one another at the appropriate times when reductions which affect prior agreements among them are proposed in negotiations between us and them.

As most of this information comes from other than British Government official sources I need hardly emphasize the importance of having it treated as most confidential.

Winant
  1. Leo Pasvolsky, Special Assistant to the Secretary of State.