Cablegram unnumbered LONDON, 15 October 1945, 10.36 p.m.
IMMEDIATE PERSONAL SECRET
1. A meeting was called this morning by the Chancellor of the Exchequer and attended by myself, other Dominion representatives, the President of the Board of Trade and Secretary of State for the Dominions. The meeting discussed further the present stage in the Washington talks.
2. Dalton [1] confirmed that no firm offer of financial aid had yet been made by the Americans. In reply to my question Dalton said that aid is to cover requirements of sterling area with some ‘readjustment of sterling area arrangements’, but at present the United Kingdom has nothing concrete to put to the Dominions.
3. On commercial policy Cripps [2] believes there is prospect of American acceptance of the United Kingdom compromise proposal for joint treatment of tariffs referred to in D.1909. [3]
4. A telegram is being sent by the Dominions Office to-day advising the latest proposals for procedure and treatment of state trading, export subsidies, shipping subsidies and similar detailed matters. Both Dalton and Cripps confirm that the United Kingdom will not accept any limitation on the right to make bulk purchase arrangements with regular suppliers, which would also retain rights of bulk acquisitions and sale by the exporting country.
5. Cripps then put the proposition that it is necessary to decide within a few days whether the Dominions and the United Kingdom will agree to make preference reduction a matter for negotiation as part of general tariff… [4] At the same time it is admitted that the American time table for a conference in June is unrealistic in view of the likely long duration of the work of the proposed drafting committee.
6. My feeling is that the United Kingdom, under pressure from the United States, is using hustling tactics which we should resist.
The fact is that, although the United Kingdom claim that they will not permit financial aid from the United States to be made a consideration in commercial policy negotiations, the United States do not take this view, and the hastening of commercial discussion increases the danger of the United Kingdom making unwarranted concessions on financial grounds. The danger from our point of view is the greater because of the conflicts in the industrial and agricultural interests of the United Kingdom and Australia. I regard both Cripps and Dalton as being only remotely concerned with the agricultural and industrial interests of the Dominions.
Canada is, of course, in a special position.
7. I insisted that these discussions have been carried to an advanced stage with only limited consultation with Dominions. It is not certain that we are prepared to make commitments even to negotiate about preference and tariff reductions at this stage.
Moreover, we would insist that trade policy is governed by the obligations concerning maintenance of employment which all countries, including the United States, accepted in the San Francisco Charter. My feeling is that the time is coming when you will have to take a strong public stand.
8. Of course, nothing was determined except to report to our Governments.
I am leaving in a few hours for Washington by ship and expect to arrive there in time for the first meeting of the Far Eastern Commission.
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1 U.K. Chancellor of the Exchequer.
2 President of the U.K. Board of Trade.
3 Dispatched 13 October. On file AA : A1066, ER45/1/5. It referred to the U.S. Govt’s aim to secure total elimination of tariff preferences, and set out the U.K. Govt’s alternative proposals to ban new or increased preferences after a fixed date, to achieve automatic reduction of existing preferences in accordance with general tariff reductions, and to open all margins of preference to negotiation, with possibility of further steps towards reductions being considered at a conference convened by the international trade organisation. U.K. negotiators had been authorised to explore these suggestions informally, subject to certain provisos, including a freedom to reduce revenue duties without reducing preferences, and an understanding that any reductions in preferences should not be regarded as quid pro quo for financial aid.
4 A sign here indicates ‘word mutilated’.
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[AA : A1066, A45/2/5/4]