Foreign Relations of the United States, 1947, General; The United Nations, Volume I

Lot 65A987, Box 99

Minutes of a Meeting of the United States Delegation, Geneva, Switzerland, May 5, 1947

Geneva, May 5, 1947

[Extract]
secret

[Here follows a discussion of other subjects.]

6. Summary of Status of Conference. At the end of four weeks, Mr. Wilcox said that negotiations with the Commonwealth countries were either dragging or stalemated. It is evident that we can expect to get ahead with only a limited number of negotiations. Furthermore, we cannot sit around Geneva indefinitely, for a failure to move ahead with reasonable despatch will have a cumulatively bad effect.

Mr. Wilcox suggested, therefore, that Mr. Clayton should call in the Heads of the Empire Delegations … He should note the unsatisfactory lists of offers and the failure to pay any attention to the automatic rule on preferences. He conjectured that they would note the requirement that the negotiations should be mutually advantageous and point out the US failure to act on wool. Such failure would free them from any obligation and therefore excuse the weakness of their offers. Mr. Wilcox proposed that then Mr. Clayton could call their bluff with an offer on wool which should put the US in an excellent position to move the conference along to a successful conclusion.

In addition to the tariff aspects of the conference, Mr. Wilcox reminded the delegates that the Chapters on Employment, Economic Development and Commodities had all been vigorously attacked in the US by business groups. On the other hand the Australians state that these Chapters are the only sections of the Charter which hold attraction at home. Therefore, where the US might hope to make changes or insert new provisions, it may be expected that Australia will be in opposition and included in that opposition will be a sizable group of underdeveloped countries. As a consequence, the changes which the Australians and the US groups desire will throw these two much wider apart. Mr. Wilcox concluded that without action on wool, he did not see how the US had the slightest chance of getting the necessary changes in the Charter which would make the document acceptable to Congress, and indeed we might have difficulty in holding the ground gained at London.

Mr. Schwenger¹ said that he agreed in general with Mr. Wilcox’s analysis, but that he wished to suggest another course of action. He observed that we would not have a clear answer from Washington for a couple of months on the wool question and suggested that we put this item to one side for that period and proceed as rapidly as possible with the other elements of the tariff negotiations and the Charter. He suggested further that we make use of the Wool Study Group and use that medium for resolving, if possible, the wool problem. He referred in this connection to his memorandum on this subject of May 2.²

Mr. Wilcox replied that he could not see how it was possible to get anywhere on the conference without breaking the Empire bloc and that this could only be done by taking action on wool. Mr. Schwenger stated that he felt all the countries hoped for success at this meeting and would make a serious effort to see that it did not fail. It was Mr. Hawkins’ observation that this was a dangerous assumption, that indeed, from a review of circumstantial evidence, the contrary conclusion could be drawn, that the British were making considerable effort to see that the meeting would not succeed. Mr. Wilcox said that if we should go ahead on the Charter negotiations without a decision on wool, we may inevitably expect a weakening of various important provisions of the Charter and a failure to achieve the changes we desire, which, in turn, would mean that if action should be taken on wool at a later time, we could not then reopen those sections of the Charter for improvement.

Mr. Ryder,³ Mr. Evans⁴ and Mr. Brown agreed in general with Mr. Wilcox. It was their view that if the conference should fail due primarily to wool, it would be difficult for the US to defend itself from foreign accusations that it had ruined the Conference. It was suggested that by publishing after the Conference the entire US list of offers we could defend ourselves from this attack. It was the consensus, however, that the excellent overall US offer list could be easily obscured by our failure to take any positive action on wool. Mr. Hawkins observed that pressure groups in all countries had continuously pointed out that it is the US which stands to gain the most from this meeting and the wool question would play right into the hands of these critics.

The Delegation was in complete agreement that a change in the wool duty was of no particular trade importance, but had great political significance to the Australians and to us. Mr. Evans inquired as to whether it was possible to make an offer on wool. It was agreed there was no constitutional restriction. Mr. Wilcox recalled that Mr. Clayton had never pressed the matter with Mr. Anderson nor with the President. The procedure required would be for TAC approval of a reduction; Mr. Clayton would take such a proposal to Mr. Anderson and the President; and it would, of course, be necessary for the President to veto contrary legislation.

Mr. Evans then asked that if the British failed to live up to the letter and the spirit of the Anglo-American financial agreement, could we deny them the balance of the British loan. Mr. Hawkins said that unless action is taken on wool, and in the face of a fair Australian position that they must have a reduction in the wool duty, there is no possibility of accusing the British of bad faith. Furthermore, he said, it would be absolutely impossible to cancel the British loan in any event. Mr. Ryder observed that it would be extremely difficult to prove that the British were not living up to their commitments.

Returning to the possibilities of getting congressional approval of the Charter, Mr. Evans said that he felt the Charter as drafted could be sold to Congress. Mr. Wilcox commented that on the basis of his experience he had considerable reservations about the possibility of doing so without including some of the changes which had been suggested. Mr. Schwenger said that he was inclined to agree with Mr. Evans.

Mr. Wilcox went on to say that if the US took action on wool then we would be in a perfect position to demand that the Empire improve their offers and negotiate in good faith. Mr. Hawkins said that then the Conference could be pushed ahead, that an elimination of all preferences of importance to the US could be demanded, and that if the Empire countries were unwilling to do this, the US could then modify its offers accordingly. Mr. Ryder said that he would only approve a reduction of the wool duty if it were conditioned on decisive action by the Commonwealth countries on their preferences. Mr. Hawkins reminded the Delegation that we had used a rifle and not a shotgun on the preferences and had not demanded action on preferences of no importance to US trade.

It was Mr. Ryder’s opinion that a reduction in the wool duty might well lose 10 or 15 senators on a Charter vote and that furthermore we would increase the difficulties of a renewal of the trade agreements legislation. Mr. Wilcox agreed with the latter point, but Mr. Hawkins questioned whether we would actually lose more than 2 or 3 senators on the wool question.

Mr. Schwenger reiterated the advantages of turning the wool question over to the Wool Study Group, and it was tentatively agreed that if a reduction should be offered on wool, it would be of considerable value to have the Study Group carrying on simultaneously. He argued that a wool agreement would counteract to a large extent the US reaction to a cut in the duty by reducing the wool growers fear of a flood of imports. The Delegation agreed with Mr. Schwenger’s conclusions. Mr. Wilcox wondered, on the basis of recent experience, whether we can expect a wool agreement to result in the near future, if at all. It was agreed that a wool agreement should be easier to negotiate.

Mr. Schwenger suggested that it would be better, if we should decide to follow Mr. Wilcox’s proposed line of action, to call the countries in one by one, thereby ignoring as far as possible the existence of a bloc. Mr. Hawkins said, in this connection, Canada was anxious to move away from the Australian position. The Delegation accepted Mr. Schwenger’s suggestion.

In conclusion Mr. Wilcox said that the matter had been thoroughly discussed by the Delegation and the next step was to take the problem up with Mr. Clayton.

1. Robert Schwenger, Special Assistant to the Director, Office of Foreign Agricultural Relations, Department of Agriculture.
2. Not found in Department files.
3. Oscar Ryder, Chairman, United States Tariff Commission.
4. John W. Evans, Trade Barriers Policy Officer, Office of International Trade, Department of Commerce.