Lot 65A987, Box 98
Memorandum by the Chairman of the Committee on Trade Agreements (Brown) to President Truman
Subject: Action at Geneva with Respect to British Preferential System
One of the major problems at Geneva has been to obtain from the United Kingdom substantial action for the reduction or elimination of preferences in fulfillment of their commitments on commercial policy made at the time of the Anglo-American financial agreement in December 1945. The details of the action taken at Geneva for elimination or reduction of such preferences on particular products is contained in the schedule of United Kingdom offers attached to my memorandum of today’s date requesting your approval of the recommendations [Page 1015] of the Committee on Trade Agreements as a result of the Geneva negotiations. Eliminations and reductions of preferences enjoyed by the United Kingdom in the Commonwealth and Empire have been secured on products accounting for an appreciable dollar volume of United States exports to the: Commonwealth and Empire, although this dollar amount is small in relation to the total United States exports on which the United Kingdom enjoys preferences.
In addition, however, the United Kingdom and Canada will exchange notes at the time of the signature of the General Agreement on Tariffs and Trade whereby each agrees to bind the preferential rates which it gives the other on products included in the schedules to the General Agreement, and to release each other from the contractual obligation assumed at Ottawa to maintain existing margins of preference. The notes will state that their agreement was reached in the light of the signing of the General Agreement on Tariffs and Trade and will become effective when that Agreement becomes effective.
This will mean that in all future tariff negotiations between the United States and Canada or between the United States and the United Kingdom, either of those two countries can negotiate with us with respect to their most-favored-nation tariff rates free of any contractual obligation to the other to maintain preferential margins. It amounts to the abrogation of the, most important part of the Ottawa Agreements, and can fairly be considered to be substantial action with respect to preferences.