Office of the Historian

840.50/12–1544: Telegram

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

London, December 15, 1944—6 p.m.
[Received December 15—5:38 p.m.]

11114. Continuing the conversation reported in Embassy’s 10831, December 7, Liesching, Bobbins, Eady and Fergusson today outlined to Hawkins, Penrose and Steere tentative United Kingdom views on agricultural policy in relation to the commercial policy convention. Discussion was confined to elucidation of these views and we did not comment on the merits or demerits of the United Kingdom position. The conversation will be continued next Tuesday23 when Liesching will outline United Kingdom views on discrimination. The substance of United Kingdom views on agriculture follows:

1.
The United Kingdom have abandoned the idea of bringing agriculture wholly within the general provisions of the multilateral convention on commercial policy and instead have framed a plan for multilateral provisions for trade in food products which would be included in a multilateral convention on commercial policy. They support this stand on the ground that agricultural production is particularly subject to wide fluctuations and that ideas developed at Washington are not adequate for dealing with this problem.
2.
Special stress is given to the need for stability. The United Kingdom will require large imports after the war. They also wish to maintain a balanced agriculture with assurance against price collapse. The problem is how to reconcile large imports with conditions for domestic farmers sufficiently stable to permit long-term plans to be made.
3.
Their conclusion is that such stability cannot be attained unless imports are regulated, that no single method is adequate for the purpose of such regulation, and that either tariffs or subsidies or quotas or a combination of two or all of them might have to be used in particular cases. They have therefore, as far as primary foodstuffs go, departed from the views expressed in Article VII talks in Washington favoring the use of subsidies instead of quotas and tariffs and do not wish to be restricted as to method of controlling imports, but will accept certain limitations on their use such as those outlined below.
4.
They recognize the dangers of excessive protection and wish to limit the total amount of protection of primary foodstuffs. The central part of their plan which would be applicable both to state and private trading is as follows. In respect of any primary foodstuff entering into international trade, the multilateral convention would provide (1) that any assistance to domestic producers should be related [Page 103] to a prescribed level of production which would be a given percentage of production in a representative period (we think the United Kingdom have in mind a higher percentage than that in the representative period), (2) that the amount of protection given should be such as not to raise the domestic price above a given percentage of the world price. This percentage would be the subject of international agreement and would be based on a moving average. If production goes above the prescribed level, the amount of protection must be reduced. In other words, production targets are set and provision is made for the reduction of protection if these are exceeded, as in the prewar United Kingdom wheat act.
5.
The United Kingdom officials hold that for export countries this plan would have the advantage that production and protection of the products in question in the import countries would be limited. This would involve limitation of subsidies along with limitation of other forms of protection. In addition, while the plan provides for assistance up to a certain level of protected domestic production in the importing countries, the advantage of any expansion in the market above that level would go to lowest cost producers.
6.
The United Kingdom officials believe that this approach would have a more favorable reception not only within Great Britain but also within the continental European countries than the approach made in the Article VII talks in Washington.

Winant
  1. December 19.↩