560.AL/1–148: Telegram

The Chargé in Cuba ( Mallory ) to the Secretary of State

secret

1. For Clayton and Brown from Wilcox. Prospects negotiations Havana as follows:

I. Issues

(1)
For Clayton and Brown from Wilcox. Prospects negotiations commodities.
(2)
Probably negotiable without important changes: cartels, economic development, investment, tariffs, technical articles, state trading, special provisions, organization chapters except relations with nonmembers.
(3)
No work done yet on subsidies, state trading, disputes nonmembers, Germany and Japan.
(4)
Should be possible reach acceptable compromise on nonmembers.
(5)
Defeat on subsidies could render charter unacceptable in US. Opposition of Canada this issue might prove fatal. Agreement between Washington and Ottawa should prevent defeat. Unlikely we could get US amendment adopted but should be able obtain compromise acceptable to US.
(6)
One of two main issues of conference is QR for industrialization. Firm US stand prevented heavy vote against charter provisions. Cannot compromise on principle of prior approval but should be able to obtain majority with minor changes in text of Article 13.
(7)
Opposition of Australia on fund determination balance of payments exception threatens loss of ground gained Geneva. This might be fatal in US. Could easily be defeated this issue. Will attempt prevent decision until Clayton can talk with Dedman.
(8)
Other major issue is prior approval for new preferences. By splitting off regional groups might win general support from Arab states, from Central American states, but difficult to obtain concession there. If we went further would alienate British Commonwealth, Brazil. Have promised make no concession preferences without consulting them.

II. Countries

(1)
Prepcom countries who generally support Geneva draft and would adhere GATT if Havana Conference failed: US, UK, Canada, South Africa, Australia, New Zealand, Southern Rhodesia, Belgium, Holland, Luxembourg, Norway, Brazil, Cuba.
(2)
Prepcom countries who support Geneva draft but say Havana charter prerequisite to adherence to GATT: France, Czechoslovakia.
(3)
Non-Prepcom UN countries generally supporting Geneva draft: Sweden, Denmark, Liberia.
(4)
Non-UN countries supporting Geneva draft: Italy, Austria, Finland.
(5)
UN countries probably supporting Geneva draft: Greece, Turkey, Philippines, Peru, Afghanistan.
(6)
Prepcom country probably opposing Havana chapter and unlikely to adhere to GATT without charter: Ceylon.
(7)
UN countries probably opposing Havana charter: Argentina, Uruguay, Bolivia, Dominican Republic (opposes Cuban preferences), Poland (not vocal at conference).
(8)
Non-UN country opposed to Havana charter: Switzerland.
(9)
Prepcom countries whose ultimate position on charter and adherence to GATT is uncertain: Chile, China, India, Burma, Pakistan. Opposition of Chile has softened this week. China remains an enigma. India will probably hold out for weak charter until last minute and then accept final draft; without charter, will probably adhere to GATT. Pakistan more cooperative than India. Also in this group: Lebanon, Syria.
(10)
UN countries whose support could be purchased with concessions on regional preferences: Lebanon, Syria, Egypt, Iraq. Also Costa Rica, San Salvador, Guatemala, Nicaragua and perhaps Panama.
(11)
UN countries whose final position remains doubtful: Mexico (continues difficult); Colombia (effective, may be reasonable); Venezuela (hostile); Ecuador (ignorant); Haiti (no evidence); Iran (opposes US on QR but might come around).
(12)
Non-UN countries whose final position is uncertain: Ireland (speaks against US, but may accept draft); Portugal (no evidence).

III. Are 49 UN countries and altogether 59 countries at conference. Would need 25 UN countries or 30 at conference for majority. Foregoing report indicates negotiating possibilities on charter. Also likelihood strong nucleus could be retained in GATT if no charter obtained Habana. [Wilcox.]

Mallory