Lot 65A987, Box 101

Mr. Harold Wilson 1 to Mr. Clair Wilcox

Dear Mr. Wilcox: Mr. Clayton’s letter of the 16th May to Mr. Helmore has in his absence been brought to my notice. As Mr. Clayton is now not in Geneva I am addressing to you this reply to Mr. Clayton’s letter.

The suggestion made by Mr. Clayton is that the passage in Mr. Helmore’s letter of the 16[14?]th May which he quotes represents a fundamental inequity and a radical departure from understandings previously reached between the United States and United Kingdom Governments, and implies that your negotiators should proceed in violation of the United States Trade Agreements Act.

If I may take up the first part of this suggestion, I should like to point out that the basic understanding between the two Governments has always been that we should engage in negotiations for the purpose of achieving a mutually advantageous agreement directed towards the substantial reduction of high tariffs and the elimination of preference. I do not think that there is any doubt on this point, and it is well that there should not be since it is essential to the considerations advanced in Mr. Helmore’s letter. What is much more important, however, is that it is essential to the success of the discussions on which representatives of our two countries are concerned and thus of the whole work now in hand here in Geneva.

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With this end in view we have started upon tariff negotiations in which you have made an offer in reply to our requests and we have made an offer in reply to your requests. But I must point out that before the negotiations started, or even requests were made by either you or us, we had made a very signal contribution the effect of which must not be discounted in any attempt such as Mr. Clayton has been anxious to have made, to reach some sort of relative assessment of the two offers. This contribution is the undertaking that no new preference shall be established and no preferential margin, whether as it exists today or as it may exist in a reduced form after the present negotiations, will be increased. There is no corresponding undertaking in respect of tariff rates except such as may be included as part of the multilateral agreement to which we are looking. This undertaking alone, though it does not in itself provide for the reduction or elimination of preferences, goes a very remarkable way along that road.

But it is of course the end result that matters, the achievement of a mutually advantageous agreement. If the result of the negotiations were that your exports were still to exceed your imports by the same proportion as they now do, I suggest that it would not be to your advantage any more than to ours or that of the world at large. A result which would merely leave a large part of the rest of the world, (including the United Kingdom) permanently short of dollars, and unable to provide that market for your goods which as a great trading nation you must have, would be a disappointing outcome of all our labours of the last few years and of the present discussions of the Preparatory Committee.

As regards Mr. Clayton’s reference to the United States Trade Agreements Act of 1934, the only suggestion was that the United States should consider the two points numbered (1) and (2) in the fourth paragraph of Mr. Helmore’s letter. There was no implication that the United States Government should go beyond its legislative authority. It is not of course for us to attempt to interpret your legislation but we have always understood that that Act too was designed to facilitate mutually advantageous results. Since that is what we of the United Kingdom are hoping to cooperate with you in securing, our negotiations should be well within the spirit of that Act. What we must avoid, or rather what, in prospect would jeopardize the present tariff negotiations and, I believe, the whole Charter, are mutually disadvantageous results.

I greatly hope that, on further study of Mr. Helmore’s letter on this point and as a whole, you will see the position in the same light as we see it.

Yours sincerely,

Harold Wilson
  1. Secretary for Overseas Trade, British Board of Trade; and member of the United Kingdom Delegation, Second Session of the Preparatory Committee of the U.N. Conference on Trade and Employment.