394.31/3–3151
The Australian Embassy to the Department of State
Aide-Mémoire
The Australian Government has carefully studied the aide-mémoire presented to the Australian Ambassador, Washington, on 26 March [Page 1308] 1951,1 and has given full consideration to the views of the United States Government expressed therein.
Australia fully shares the desire of the United States of America that satisfactory agreement emerge from the current tariff negotiations at Torquay.
As regards the negotiations between Australia and the U.S.A., the United States Government is aware that the basis of the original Australian offers of tariff concessions was broadened considerably during the course of negotiations to embrace a substantial volume of the United States’ trade with Australia and within the last few days a substantial offer was made on films following special representations by the U.S.A. delegation. The concessions in the Australian tariff which have been offered cover approximately 22% of Australian imports from the United States in 1949–50. Some of the main commodities on which concessions have been offered are a wide range of machinery including dredging and excavating machinery, iron and steel plate and sheet, artificial silk cord and tyre fabric, aeroplane parts and pneumatic tyres and tubes. In addition to the comprehensive list of direct tariff offers to the U.S.A., Australia has indicated to the United Kingdom and Canada that no objection would be raised to reductions in the tariffs of those countries on a wide range of items in respect of which preferential treatment is accorded to Commonwealth countries and on which the U.S.A. has sought some reduction of the preference margins. These items include certain agricultural products, namely, fresh grapefruit and dried eggs in the United Kingdom and fresh apples, fresh peaches, fresh vegetables, cheddar cheese and sausage casings in Canada. The United States Government is no doubt aware that even though Australia concurs in the reduction of a preference margin in the United Kingdom or Canada it still remains for the country according the preference to consider the views of other countries enjoying the preference. Furthermore, in the case of some items even though the preference margins are not bound to Australia, Australia may have a particular trade interest and Australian concurrence in the reduction of the relevant preference margin represents a concession in real terms by Australia.
Australia, like the U.S.A., is guided in tariff negotiations by the principle of reciprocity and a balancing of offers and concessions. Australia considers that her present offers constitute reasonable compensation for the concession offered by the U.S.A. While the Australian Government appreciates the decision of the United States Government to offer the maximum reduction on the duty on wool which is permitted under present United States legislation, the Australian [Page 1309] Government does not consider that a reciprocal agreement based on the United States offers warrants additional concessions of the type requested in the United States aide-mémoire.
The Australian Government accordingly regrets that it cannot meet the United States request for reductions in the present preference margins enjoyed by Australia in the United Kingdom on cheddar cheese, unsweetened milk powder, raisins, and preserved fruits, and in Canada on raisins, dried currants and canned peaches. The Australian delegate at Torquay had already informed the United States delegate prior to the receipt of the United States aide-mémoire that Australia is prepared to agree to some modification of the preference in the United Kingdom on unsweetened condensed milk. As indicated above, Australia has raised no objections to reductions in many items in the United Kingdom and Canadian tariffs in order to facilitate agreement between the U.S.A. and those countries. The items on which Australia has withheld her concurrence to reductions in preference margins are important items for Australia and the trade in them so far as the United States is concerned is much less than the trade in the other items on which tariff reductions have been offered by the United Kingdom and Canada.
The preferences on automotive equipment and tobacco on which concessions are also sought are enjoyed by the United Kingdom and Canada, (in the case of automotive equipment) and Southern Rhodesia (in the case of tobacco) and those countries would have to be compensated by the United States for any preference concessions to which they consented. However as has been emphasised it is considered that a reasonable balance has already been achieved and the Australian Government is not prepared to undertake to negotiate further with those countries.
Notwithstanding the Australian Government’s view regarding the balance between the present offers, it is prepared to make some additional concessions in order to reach agreement at Torquay. These offers have been conveyed to the Australian delegation and cover approximately 7% of Australian imports from the United States in 1949/50, making a total coverage of 29.15%. The additional offers proposed which include offers on commodities such as tinplate, certain electrical equipment, miscellaneous vehicles and centrifugal separators are in the main concessions relating to the margins of preference and some of them require the concurrence of the United Kingdom Government. They are however being made in the form that it is considered will be most acceptable to the United Kingdom and it is not expected that the difficult items will account for more than 0.6%. These additional offers are being made in a conscientious endeavour to meet present difficulties.