560.AL/7–349: Telegram

The Ambassador in China (Stuart) to the Secretary of State

1429. Re Shanghai telegram 2493 [2492,] June 25 to Department, repeated Canton 803, Peiping 182, Tientsin 80, and previous.

Embassy suggests desirable obtain more positive evidence actual implementation reported intention authorities Shanghai abrogate GATT rates. Specifying cases where importations Shanghai subject agreement rate but actually charged pre-agreement rate or else official proclamation or indication some sort seems needed provide firmer ground for actual counter-moves by GATT signatories.

Embassy fully supports recommendation reftel contracting parties should not hesitate proceed with complicated procedures required adjust agreement rates vis-à-vis exports Communist China if Communists definitely adopt policy abrogation such rates. At same time, Embassy would like point out importance of timing in any retaliatory moves contemplated. Sudden retaliation against Communist at this point in time could hardly be expected have immediate adverse visible effects Communist exports on important scale because action Nationalists in closing ports has resulted in insignificant volume exports, imports moving in China trade today. Believe full significance such move on our part this particular moment would be lost to Communists.

Sent Department, repeated OffEmb Canton 605, Shanghai 794, London (for Martin89) 10, Peiping 249. Department pass Tientsin 49.

  1. Edwin M. Martin, Deputy Director of the Office of International Trade Policy, who was engaged in technical-level discussions with British representatives regarding imposition of trade controls on exports to China. For correspondence on this subject, see pp. 817 ff., passim.