Office of the Historian

611.4731/250: Telegram

The Secretary of State to the Consul General at Sydney (Wilson)

Washington, December 17, 1937—7 p.m.

Your telegram received Dec. 17th. You may proceed to Canberra as suggested.

[Page 156]

After studying the text of the official statement and the list of unrestricted products29 the following is submitted for your guidance in conversations:

(1)
The present Australian move appears to be a step in the right direction but we are unable at this stage to say whether it constitutes removal of discriminations. It does not now appear, as it did after Lindsay’s and Officer’s first visits, that the Australian Government expects us to take any action before we shall have obtained ample evidence that the granting of licenses on the so-called competitive products is on a non-discriminatory basis. In this connection you are requested to collaborate with Squire in obtaining the kind of evidence which would help us in defining the present treatment of American goods. We realize that this may require some time, and since the Australians are not pressing we would expect your report to be made only after a thorough investigation.
(2)
The proposal now appears to be that the Australians desire us to satisfy ourselves in due course that Australia should be restored to the most-favored-nation list of countries. Within a reasonable time after that they would come forward with overtures for the negotiation of a trade agreement, and would expect us to hold informal conversations and perhaps informally exchange lists of desiderata.
(3)
Officer stated that it was his belief that the unrestricted list bears in amount of trade a ratio of about 3 to 1 over the competitive list. We have told him that this does not agree with Department of Commerce preliminary analysis which indicates that they are at a ratio of about 1 to 1, each representing about 5 million dollars of trade in the year ended April 30, 1936. Can you and Squire give us a more accurate estimate?
(4)
I made no comment to Lindsay when he delivered the official statement. Department officials, however, have recited our position again to Officer about as follows:
(a)
The Australian Government has communicated nothing concrete to us and we must therefore await evidence which will enable us to say to the President that there is no longer discrimination.
(b)
It would be impossible for us to certify as a fact to the President that there was no discrimination so long as any form of discrimination was practiced. We cited Australia’s failure to extend to our products its trade agreements rates and we queried whether Australia was now asking that we extend to them our trade agreements rates when they do not seem prepared to reciprocate.
(c)
When Casey inquired last summer whether it would be satisfactory if Australia substituted a system of higher tariffs for the licensing system, Mr. Welles explained to him and Officer that we would [Page 157] expect equality of treatment in tariff rates. He added, however, that the question of negotiating with Australia would be made more complicated if Australia should indulge in “tariff padding on items of interest to the United States.” See Department’s telegram of February 12, 1937, and if you see no objection, or if an opening presents itself, you might say that we have at all times stood ready to conclude a modus vivendi with Australia with mutual guarantees of most-favored-nation treatment.
(5)
If Australian officials should contend that the United States is now interpreting more strictly in the case of Australia than of some other countries what constitutes discriminatory treatment of American goods, you could use the following explanation: once the President has found that single or combined discriminations are so flagrant as to leave him no alternative than to withdraw most-favored-nation treatment, a reversal of his official declaration cannot be predicated on half measures. In the case of those countries whose discriminations have not been the cause of Presidential action, we are not called upon officially to define their treatment of American goods until that treatment becomes so flagrant as to make Presidential action necessary.

Hull
  1. On December 15, 21, 22, and 27, 1937, the Counselor of the British Embassy transmitted to the Department detailed lists of unrestricted products.↩