Lot 65A987, Box 99

Memorandum of Conversation, by Mr. Robert M. Carr of the United States Delegation Staff

Present: Mr. Nash, New Zealand; Mr. Clayton and Mr. Carr, US.

Mr. Clayton referred to the chart,1 a copy of which had been given to Mr. Nash earlier, showing the scope of United States offers of tariff concessions and the depth of the duty reductions involved. He observed that these concessions would bring the U.S. tariff down to about the lowest level of any tariff in the world, that they would result in a great increase in dollar exchange for the world-wide purchase of commodities, including wool, and thus would contribute substantially to improvement of world economic conditions and the promotion of economic peace. He hoped that the Southern Dominions would not stand in the way of this prospect because of the failure of the United States to offer a reduction of the duty on wool, which, he argued, would be of only limited benefit in view of the financial assistance given by the United States Government to domestic wool growers.

Mr. Nash recognized that the United States offers were very substantial. [Page 945] Much credit was due the United States for its persistence in pressing forward with its trade program over a period of many years in the face of great political obstacles at home and abroad. Had it not been for this persistence the Geneva Conference would not have been possible. He appreciated, too, the generosity of the United States in extending to New Zealand reductions in duty, especially on wool of the coarser grades, which had been given to Argentina, especially since New Zealand had not reciprocated in extending to the United States its intermediate rates.

Mr. Nash disagreed however that a reduction of the duty on the finer wools would not be of great value and elaborated in this connection on the threat of competition from synthetic fibres and fabrics and the need of keeping wool prices as low as possible. New Zealand is the world’s third largest exporter of wool; its wool production last year exceeded that of the United States. Except for a reduction of the U.S. duty on wool, it has little to gain from the Geneva negotiations, although its position in this respect is not as bad as that of Australia and South Africa.

If the surplus wool stocks of the CCC were a factor accounting for the failure of the United States to offer a duty reduction and if in view of the surplus stocks of the British Joint Organization it was feared that a duty reduction would make it difficult to dispose of the CCC stocks in competition with the British stocks, he was sure that a satisfactory arrangement could be worked out to allay such fears and he was prepared, as a member of the Joint Organization, to see that such an arrangement was made.

Mr. Clayton informed Mr. Nash that he was leaving Saturday for Washington to fight the inclusion of the import-fee provision in pending legislation for extension of the wool price-support program. Pie would return before June 1. Mr. Nash said that he was leaving Europe for New Zealand, via New York, about May 29. They agreed that arrangements should be made for another meeting in Geneva if Mr. Clayton returned before the 29th, or else possibly in Washington.

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