Office of the Historian

611.4131/10–245: Telegram

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

Washington, October 2, 1945—6 p.m.

8703. The U.S.–U.K. Committee on Commercial Policy met today and agreed upon a) the inclusion of India among the principal trading nations which would meet in March 1946 for the purpose of conducting negotiations preliminary to the general conference on trade and employment to be held in June 1946, and b) the treatment which should be accorded to the trade of countries which fail to carry out the obligations of the proposed multilateral arrangements on trade barriers.62 After agreeing upon the order in which the principal issues (tariffs and preferences, subsidies, state trading and exchange control, and cartels) should be taken up, the Committee began discussions regarding the American proposal to eliminate tariff preferences. This discussion, which was inconclusive, revealed a wide divergence between American and British viewpoints which may be difficult to bridge.63

Acheson
  1. It was agreed, subject to further scrutiny, “that new members adhering to the proposed multilateral arrangements on trade barriers would be required to make adequate tariff reductions in order to receive the benefits of the arrangements”. (611.4131/5–146, Folder 3)↩

  2. The British delegation protested that elimination of preferences would leave the United Kingdom defenseless in trade negotiations, since margins of preference provided the basis of the principal concessions which the United Kingdom could make in return for other countries’ tariff reductions. Mr. Clayton replied that he felt that the U.S. proposal did not call for unilateral sacrifices by the United Kingdom and proposed the following statement regarding tariffs and preferences put forth by the U.S. side for inclusion in its “Proposal to Establish an International Trade Organization” (ECEFP D–108/45):

    “1. Import tariffs and preferences. Members should undertake to take effective and expeditious measures, in accordance with methods to be agreed upon, for the substantial reduction of import tariffs and the elimination of tariff preferences. In the light of the principles associating the two which are set forth in Article VII of the Mutual-Aid Agreements, the rule should be that the reduction of tariffs and the elimination of preferences should be dealt with together, as follows:

    • “a) Margins of preference on any product should in no case be increased.
    • “b) Whenever most-favored-nation tariffs are reduced, such reductions should operate automatically to reduce or eliminate margins of preference.
    • “c) In order to carry out the foregoing, existing international commitments to maintain margins of preference should be abrogated and no new commitments should be entered into.
    • “d) As a part of the negotiations regarding tariffs and preferences, suitable arrangements will be made for the early elimination of such tariff preferences as are not eliminated by the application of the foregoing principles.”

    For subsequent alteration, see p. 160.

    ↩