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Australia, it is suggested that the mission should have some other stated purpose so as to minimize publicity.

In view of the scope of the Empire preferences and their relation to a possible United States-Australian agreement, it seems obvious that such an agreement could be considerably more comprehensive if the United States' negotiated simultaneously with other British Empire Governments, such as the Governments of the United Kingdom, New Zealand and the Union of South Africa. However, there appears to be no reason on this account for delaying confidential exploratory talks between representatives of our two Governments. In fact, concrete progress in United States-Australian exploratory conversations would tend to expedite and facilitate possible simultaneous negotiations with other British countries. You know, of course, that confidential discussions regarding the possibility of a supplementary trade agreement between the United States and the United Kingdom have been in progress for some time.

In closing, I should like to emphasize again my concern regarding the basically unsatisfactory state of commercial relations between the United States and Australia and my conviction that the present uniquely favorable conditions for rectifying the situation should not be allowed to pass without the most serious efforts being made to reach an understanding. It would have been most unfortunate if the acrimony engendered by the state of virtual "trade war” between our countries during 1936 and 1937 had not subsided prior to the outbreak of the present war.

I wish to express my pleasure at having had the opportunity of meeting you and discussing questions of mutual interest. Mr. Hull has requested that I take this opportunity to reiterate his, as well as my own, best personal wishes. I am [etc.]

DEAN ACHESON

611.47H31/115 : Telegram

The Consul at Wellington (Cox) to the Secretary of State

WELLINGTON, May 15, 1941–7 p. m.

[Received May 15—10:30 a. m.] My May 10, 11 a. m.40 I yesterday suggested to the Acting Prime Minister 41 desirability of amplifying New Zealand Government's objectives in despatching a trade mission to the United States and have today received a statement bearing his approval which states that the intention of the delegation is to resume the trade conversations undertaken by Nash with the Department in July, 1937. The statement continued "it is considered that the discussions held at that time made useful progress although it was found necessary to defer further negotiations until an agreement between the United States and the United Kingdom had been reached. This agreement having since been finalized New Zealand Government is of the opinion that immediate resumption of negotiations might well prove mutually advantageous.

40 Not printed. 4 Walter Nash, Minister of Finance and Customs.

In view of the understanding then reached and of Mr. Hull's subsequent suggestion in reply to a proposal from New Zealand that the discussions might be usefully continued when the time was considered by both Governments to be opportune, New Zealand Government is hopeful that it may now be possible to agree upon a procedure for the extension of trade between the two countries.

New Zealand Government is also of the opinion that in the special circumstances brought about by the war it is desirable that there should be the maximum consultative cooperation between the United States and the Dominions in the economic field and that trade between the two countries should be facilitated and increased to the greatest possible extent.

It is therefore considered, after consulting with the British Ambassador to Washington, that an opportune time for continuing the discussions which have already taken place has now arrived.

The memorandum ends with the statement that the delegation is expected to arrive Washington May 24th.

There are indications of some official anxiety concerning the abrupt press announcement and members of the mission have informed me they hope that it has not caused (apparent omission). I am sure the announcement was made through inadvertence due to increased work caused by the departure of the Prime Minister.

The following additional members of mission are Lieutenant Colonel Williams, Technical Adviser to Coates and Messrs. Officer and Turner, private secretaries.

Cox

611.4131/2560

The British Ambassador (Halifax) to the Secretary of State

WASHINGTON, May 16, 1941. MY DEAR MR. SECRETARY: You will remember that soon after the initiation in November of the informal discussions which have been proceeding on the possibility of a supplementary trade agreement between our two countries certain suggestions as to a basis of negotiation were made. It was proposed inter alia that, as a counterpart to certain named concessions to be made by the United States, the United Kingdom should reduce the margins of Imperial preference on raisins, prunes, canned peaches and pears and fresh apples and pears. It was also proposed that the United Kingdom should undertake to reduce the existing margin of preference on tobacco in 1942.

2. The United Kingdom Government, who are most anxious to maintain and expand their trade with the United States, have carefully considered these proposals. As a contribution to a satisfactory agreement they would be prepared to entertain the suggestion for a reduction in the tobacco preference on the expiration of their existing obligation to maintain it until August 1942, and they trust that you will share their view that the present informal discussions should be continued with a view to finding as soon as possible a mutually satisfactory basis of negotiation.

3. With regard to the preferences on the dried, canned and fresh fruits mentioned above, the United Kingdom Government asked me to point out that they are not free to reduce the margins of preference which are guaranteed to the other Empire Governments concerned without the consent of those Governments. Nor are they in a position to compensate those Governments for the loss of valuable trade in the United Kingdom market which any waiver of their contractual rights would inevitably involve. If, however, the United States Government were disposed to enter into negotiation with some or all of those Governments, the way would be open for a series of arrangements analogous to those made in 1938 between the United States, the United Kingdom and Canada, with results which the United Kingdom Government believe to have been satisfactory to all the parties. Should the United States Government be prepared to consider negotiations on such a basis, the United Kingdom Government would for their part be glad to do everything in their power to contribute to a successful consummation.

4. They feel that a series of agreements covering the widest possible range of trade between the United States and the various parts of the British Commonwealth would make a contribution of vital significance not only to the solution of some of the difficulties created by the war but also to the reconstruction of world trade after the war on a sound and liberal basis. Subject to the views of the United States Government, they would suggest that the wider possibilities envisaged above should be kept prominently in mind in future discussions on the feasibility of a supplementary agreement between the United Kingdom and the United States.

5. Should you see no objection, the United Kingdom Government would like to communicate copies of this letter to the Governments of Canada, Australia, New Zealand, the Union of South Africa, India, Burma, Southern Rhodesia and of the Colonial Empire. Believe me [etc.]

HALIFAX

611.4181/2560
The Secretary of State to the British Ambassador (Halifax)

WASHINGTON, May 21, 1941. MY DEAR MR. AMBASSADOR: I refer to your note of May 16, 1941, regarding the possibility of negotiating a supplementary trade agreement between our two countries. I share your view that a series of agreements between the United States and various British Empire Governments, on the lines proposed, would make a contribution of vital significance not only to the solution of some of the difficulties created by the war but also to the reconstruction of world trade on a sound and liberal basis. Furthermore, I feel strongly that, if world trade is to be reconstructed on a sound basis, the fundamental problems must be attacked now while circumstances are perhaps uniquely favorable for a reasonable solution.

While it would not be feasible to enter into simultaneous negotiations with all the Governments of the British Empire, the United States Government would be prepared to commence immediately confidential exploratory conversations with the Governments of Australia, New Zealand and the Union of South Africa. I propose therefore to communicate in the very near future with those Governments suggesting that they designate officials to explore in detail with American representatives the feasibility of undertaking the negotiations of the suggested trade agreements.

I have no doubt your Government will agree with me that it is very important that confidential exploratory conversations should precede any formal negotiations. Under present circumstances, it would be particularly undesirable to commence formal negotiations without the maximum possible assurance that such negotiations would be concluded successfully in the shortest possible time. I thus concur in the view that exploratory talks between our two Government[s] should be continued most actively.

As regards the desire of your Government to transmit to the various British Empire Governments copies of your note to me of May 16, 1941, I have, of course, no objections to such procedure. I am [etc.]

[File copy not signed]

611.4781/432a

The Secretary of State to the Australian Minister (Casey)

WASHINGTON, June 11, 1941. SIR: I have the honor to refer to a note of May 16, 1941, sent to me by the British Ambassador regarding the possibility of negotiating a supplementary trade agreement between the United States and the

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United Kingdom. It is understood that a copy of this note has been transmitted to your Government.

I share the view expressed in the Ambassador's note that a series of agreements between the United States and various British Empire Governments, on the lines proposed, would make a contribution of vital significance not only to the solution of some of the difficulties created by the war but also to the reconstruction of world trade on a sound and liberal basis. I feel strongly that if world trade is to be reconstructed on a sound basis, the fundamental problems must be attacked now while circumstances are perhaps uniquely favorable for a reasonable solution. Furthermore, it is believed a trade agreement between the United States and Australia could, in itself, provide important benefits to both our countries.

This Government envisages discussions between the United States and the various British Empire Governments along the lines of those which culminated in 1938 in trade agreements between the United States and the United Kingdom and between the United States and Canada. It appears, however, that it would be inadvisable to undertake formal negotiations for a trade agreement between the United States and Australia prior to a detailed confidential examination of questions bearing on the practical feasibility of successful negotiations. Under present circumstances, it would be particularly undesirable to commence formal negotiations without the maximum possible assurance that such negotiations would be concluded successfully in the shortest possible time. I should also mention that United States trade-agreement procedure requires that public notice be given of intention to negotiate and that an opportunity be given all interested parties to express their views in writing and at public hearings prior to the undertaking of any formal negotiations or any definitive commitments. While exploratory talks would naturally have to be on an ad referendum basis so as to insure that the highest quarters in both Governments are in agreement with the possible contents of a trade agreement, and also in order to conform with procedure required in the United States, I feel certain that both our Governments would be in a better position to judge the situation after exploratory talks had reduced the generalities involved into comparatively definite terms.

This Government has already begun the necessary statistical and other work in preparation for such detailed exploratory discussions and hopes that the Government of Australia, if it is favorably inclined toward the general project, will initiate without delay such similar preparatory work as it considers necessary. It is hoped that at the appropriate time your Government will find it convenient to designate officials to carry on the proposed exploratory discussions at Washington.

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