693.003/5–2049: Telegram

The Consul General at Shanghai (Cabot) to the Secretary of State

1759. Consulate General Shanghai cordially concurs in tolerant approach to GATT problem set forth Deptel 107, May 17, 7 p. m., to Tientsin, repeated Shanghai 969, and believes Smyth and Clubb might emphasize Department’s restraint in continuing GATT benefits to US imports from China despite Communist abrogation GATT benefits on US exports entering China. We believe No[rth] Chinese colleagues should stress action Communists themselves has afforded us [Page 944] opportunity and possibly even provocation for withdrawal GATT benefits, and [had?] we chosen engage in economic warfare tactics which we seeking to avoid but which they apparently applying under pretext lack recognition, for instance their noncooperative attitude re Brown’s74 temporary detail Peiping (Tientsin’s 331, May 17 to Department,75 repeated Shanghai 229) and failure afford US, other foreign consular officers within their jurisdiction usual treatment in conformity accepted international practice.

Communists might also wish consider field for withdrawal GATT benefits has been materially enlarged by their occupation Hankow and prospective Shanghai takeover where benefits from reconsideration their hasty action would be materially enhanced or where they might eventually be penalized in case they insist upon abrogation GATT commitments, not by US alone but by all other signatories.

Suggest Smyth and Clubb be authorized inform Communists our willingness to be patient for time being while they familiarize themselves with GATT scope, purposes and its specific provisions applicable China and that temporarily we are prepared defer presentation question their abrogation Chinese Government commitment to cosignatories now engaged further GATT negotiations Annecy, France,76 and our willingness explain our viewpoint as expressed Deptel under acknowledgment in event question raised by other signatories for purpose temporary postponement action. However, Communists will appreciate recent and prospective enlargement areas over which they claim jurisdiction will increase adverse effect their unilateral abrogation GATT tariff rates will have on foreign imports entitled to preferences and may jeopardize trade in considerable number of major Chinese export commodities entitled to benefits in GATT countries.

Sent Department 1759, repeated Nanking 971, OffEmb Canton 509. Department pass Peiping as 154 and Tientsin as 510.

  1. Willard O. Brown, Consul at Tientsin.
  2. Not printed.
  3. Third Session of Contracting Parties to the GATT which began on April 11. Direct negotiations were completed by August 27.