394.31/11–850: Telegram

The Secretary of State to the United States Delegation to the Fifth Session of the Contracting Parties to GATT, at Torquay


148. 1. Reurtel 146, Nov. 8. Martin informed Rowan substance of para 4 ourtel 138.1 Subsequent conversation revealed Rowan did not fully understand that in US view Fund reports did not attempt to decide question of common criterion for trade policies of sterling area countries. Brit evidently interpret Fund reports as positively rejecting this principle. We believe this is primary reason why they are attempting to prevent formal acceptance by CP’s of IMF reports or conclusions of those reports. We think pressure toward relaxation as such is secondary importance in their view. We would still hope that their resistance to formal acceptance of IMF reports and conclusions similar to those reports would be lessened if we could get across to them our view concerning relationship these reports to question of common criterion. We urge you emphasize this point along lines ourtel. US view that Fund reports do not attempt decide question common criterion may be stated in GATT Sessions if appears desirable.

2. Brit here appeared not fully conversant with basic issues and asked that further consultations be held Torquay. May be advisable to review with Brit Torquay substance para 4 ourtel 138.

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3. We would prefer formal presentation to CP’s IMF report since maintenance of proper relationship Fund and GATT assisted by Fund giving written answer to GATT request. However, do not object to oral presentation providing Fund reports including conclusions read verbatim and complete reports appear in records of Session.

4. We retain preference for some indication that majority CP’s consider that time for beginning progressive relaxation by certain of sterling area countries has come. As minimum would like to see Working Party report state that majority Working Party agrees with Fund findings. Since substance of Fund reports has already reached public press, becomes difficult for US to avoid pressing for vote in GATT after doing so in Fund. Do not consider Annecy consultation parallel case since Fund report still not complete at termination Annecy consultations and US took position at Geneva that consultations were not completed at Annecy. May not be desirable that Annecy WP report be established as satisfactory prototype for GATT consultations. Appreciate your numbered para 5 indicates awareness this point. However, will leave to discretion Del extent to which wise press for indication in WP report majority support for US and Fund position.

5. Do not consider Brit view indicated your numbered para 3 re purpose consultations entirely consistent language Article 12 para 4(a) particularly proposition that such consultations should explore “alternative practical measures which may be available and the possible effect of such measures on the economies of other Working Parties”.

6. Assume re your numbered para 6 you will maintain principle of separate reports for individual countries and separate statements re individual countries. We note that IMF conclusions vary for different countries.

7. Uncertain what may be implied Brit proposal that Contracting Parties “take note” sterling area membership consulting countries. Would see no objection factual statement re sterling area arrangements along lines Fund report on Australia providing language neutral on question validity such arrangements but language suggested ur fourth unnumbered para appears dangerously close to acceptance common criterion principle. Might wish to include language similar to that of Fund report relating to importance of convertibility of sterling holdings of these countries but consider this is as far as US should go in recognizing relationship individual countries to sterling area. Statement of this nature may in fact be preferable to explicit statement in Working Party report that no effort is made to deal with question of common criterion principle, since latter statement might focus too much attention on this question.

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8. Would hope that unnecessary to go as far at this time in appearing to meet Brit views as language numbered para 9 urtel might imply. We should be in better position appraise prospects of obtaining acceptance Fund’s reports as Working Party proceeds in views other dels becoming apparent.

  1. November 8, 11 a. m., p. 761.