Lot 122, Box 13147

Memorandum by the Assistant Secretary of State ( Clayton ) to Mr. Harry C. Hawkins, Minister-Counselor of Embassy for Economic Affairs at London 93

The informal exploratory discussions you have been having with British officials on economic policy have been useful in revealing the trend of British thinking and will help us greatly in formulating our position for the negotiation of any arrangements that may later be undertaken. These discussions should be continued but it will be well to keep in mind the fact that the introduction in Congress with Administration support of the bill for the renewal of the Trade Agreements Act94 has now determined the line of policy which the Executive Branch of the Government favors and, if enacted, would provide the means for implementing it. Under the bill, if enacted, this Government would negotiate trade agreements in which varying degrees of tariff reduction would be made in the light of careful selective commodity by commodity studies. This is a quite different idea than the horizontal non-selective reduction of tariffs by a uniform percentage, which was examined in discussions with foreign experts over a year ago and which has been looked into here since that time. This latter would be a much more drastic approach to the trade barrier problem than that provided for in the present Trade Agreements Act and in the pending legislation for renewing and strengthening it; such a program could not be carried out either under the present Act or under the proposed amendments. And even if that were not so there are serious objections and difficulties both of a technical and policy nature to such a policy.

In view of the fact that all these questions will have to be discussed in preparation for the proposed trade and employment conference, I suggest that in your discussions in London you endeavor to the extent you consider feasible to influence the thinking of your British conferees toward a policy that would be practicable under the pending Trade Agreements Bill, in the hope that we may make progress toward an agreed policy before the proposed trade and employment conference becomes imminent.

I should also like to urge that you explore informally with the British as soon as possible cartel policy and commodity policy, in order that we may be kept up to date on British thinking on these [Page 46] subjects. I should also like to have you exchange ideas with them on the international trade organization, so far as may be consistent with what I have said above.

All of these questions will have to be considered at the proposed trade and employment conference, on which we must begin intensive preparatory work as soon as the trade agreements legislation has been disposed of and the San Francisco Conference is over. The more we can learn of the trends of thinking in other countries, and particularly in a key country like the United Kingdom, the better we shall be able to visualize the problems confronting us and the more intelligently we can shape our own position. It is clear that the future direction of world commercial policy will depend to a large extent upon the policies that we and the British can agree upon.

W. L. Clayton
  1. File copy attached to minutes of the meeting of the Secretary of State’s Staff Committee, May 2, 1945. William L. Clayton was Assistant Secretary of State for Economic Affairs.
  2. For a brief legislative history of the Trade Agreements Act of 1945, see Leland M. Goodrich and Marie J. Carroll, eds., Documents on American Foreign Relations, 1944–45, vol. vii (Boston, World Peace Foundation, 1947), p. 480.