394.31/12–1550

Memorandum by the Director of the Office of International Trade Policy ( Brown )1 to the Secretary of State 2

confidential

Subject: British Preferences and Torquay

At your September meeting with Mr. Bevin,3 he expressed the hope that there would not be a major wrangle about Imperial preferences at Torquay. You said you would look into the matter.4

Mr. Wilson, President of the Board of Trade,5 expressed a similar view to Mr. Thorp at Torquay,6 but said the United Kingdom would be willing to consider negotiations with respect to individual preferences.7

[Page 1264]

There has so far been no real difficulty with the British at Torquay on this subject. Our requests on them made no broadside attack on preferences, but rather asked for reduction or elimination in a reasonable number of specific cases, offering appropriate compensation. The British offers are most unsatisfactory on this point, but we are trying to handle the problem by negotiation on an item-by-item basis.8

For your information, the Canadians have been prevented from making a number of important offers to us, which they would like to make, because of Australian insistence on maintaining their preferential advantage in the Canadian market. We are handling this on an item-by-item basis also.9

Winthrop G. Brown
  1. Winthrop G. Brown, Alternate Chairman of the United States Delegation at Torquay, and Chairman of the United States Delegation to the Fifth Session of the Contracting Parties of GATT at Torquay, November 2–December 16, 1950, had returned to Washington by this time. (For documentation regarding the Fifth Session of the CP’s, see Foreign Relations, 1950, vol. i, p. 692 ff.)
  2. This memorandum was sent to Secretary Acheson through the Assistant Secretary of State for Economic Affairs, Willard L. Thorp.
  3. Ernest Bevin, British Secretary of State for Foreign Affairs.
  4. See memorandum of conversation by Lucius D. Battle, September 26, 1950, Foreign Relations, 1950, vol. i, p. 802.
  5. Harold Wilson. Mr. Wilson was head of the British Delegation to the Torquay Conference.
  6. Thorp was the designated Chairman of the United States Delegation to the Torquay (tariff negotiating) Conference and attended the opening sessions.
  7. Mr. Wilson expressed his views at a dinner held between the principals of the United States and British Delegations on September 28, 1950, the opening day of the conference. He said in part:

    • “The British find the problem of offering further reductions in Empire preferences extremely difficult. During the Torquay negotiations, they will be willing to effect ‘some’ reductions in exchange for tariff concessions in cases where such an exchange appears to be advantageous, but any ‘general’ effort to reduce or eliminate preferences would confront the British with very serious difficulties. The question of Empire preferences has important political significance in the United Kingdom. The maintenance of the system of preferences is not only a major policy of the Labor Party but is favored by a majority of the British people. If the Conservatives should come into power, the policy would probably be advocated by them even more strongly than by the Laborites. . . .
    • “The desire of the United States Congress and of the American people to obtain concessions from the British to match concessions granted was quite understandable but it was hoped that United States authorities would also understand the delicate position in which the British Government found Itself with regard to the matter of preferences.” (International Trade Files, Lot 57 D 284, Box 138, “UK 1950 TN/8100/Preliminary Negotiations”)

    This general position had been spelled out in some detail in exchanges between the British Embassy in Washington and the Department of State in July, August, and September 1950; see Foreign Relations, 1950, vol. i, p. 791 ff.

  8. Detailed information as to requests and offers both by the United States and the United Kingdom, much of it in tabular form, is located in the International Trade Files, Lot 57 D 284, Boxes 133 and 138. The contents of Box 138 consists entirely of matters relating to the negotiation with the United Kingdom. The Delegation submitted to the Department of State 22 weekly reports between October 9, 1950 and March 27, 1951, which not only contain much information in convenient summary form with regard to the United Kingdom negotiation (inter alia) but also information which was not otherwise reported.

    By this time (December 15, 1950) there had been only two full-dress meetings between the United States and the United Kingdom negotiating teams, on November 17 and December 11, a situation viewed with some misgiving by the United States Delegation. A preliminary analysis of the U.K. offer list by the U.S. team had been that the British offers were “very meager”. The Delegation reported to the Department on November 20, 1950 that “Offers have been made on 30 items out of 137 requests. Fourteen of these offers are for bindings of the present rates. Ten reductions are offered, but in amounts less than our requests; and our requests for reductions are met on only 6 items. The only reductions in preference are the minor ones incidental upon these reductions in duties.” At the meeting on December 11, the British were informed that their offers “did not constitute an adequate basis for negotiation.” It was at this time that the U.S. negotiators “in order to cooperate” agreed to hold item-by-item discussions “on a strictly informal and experimental basis.” (Weekly Report No. 7, Part 2, November 20, 1950, 394.31/11–2050)

  9. There is considerable documentation in the Department of State’s central indexed files (394.31) on the Canadian negotiation, which is not printed here. The bargaining involved such important items in United States-Canadian trade as aluminum, plywood, canned salmon, and cheddar cheese, but was essentially a “nuts and bolts” operation. Basic documentation on “Southern Dominions” negotiations (Australia, New Zealand, South Africa) is located in Lot 57 D 284, Box 137, with particular reference to the Australian negotiation.