611.4131/409½

The British Embassy to the Department of State

Memorandum

1.
The United Kingdom Government have been anxiously considering the desire of the United States Government for a more precise indication than it has hitherto been possible to give them as to how far the “essential” requirements set out in their memoranda of March 2nd and May 18th might be met.
2.
The United Kingdom Government are deeply impressed with the imperative need for finding a basis of negotiation within the next few weeks if the present opportunity for concluding a trade agreement is not to pass. They cannot of course commit other British [Page 79] Commonwealth Governments concerned to any proposals involving modifications of duties guaranteed to them under existing trade agreements. Nevertheless they believe that a decision as to whether it is possible for the United States Government and themselves to proceed to formal trade negotiations could most rapidly be reached if the former would indicate whether they would accept as a basis proposals which, though necessarily provisional, are as specific as it is possible to make them at the present stage.
3.
With this object the United Kingdom Government accordingly submit for the consideration of the United States Government the attached statement85 showing duty reductions and other concessions which they would be prepared to make on items specified in the United States “essential” requests provided (a) that adequate concessions were made by the United States (b) that the proposed agreement was in other respects satisfactory (c) that where necessary the British Commonwealth Governments concerned subsequently concurred.
4.
In view of the importance which they understand the United States Government attach to removal of the existing duty on wheat the United Kingdom Government would, subject to the same provisos, be prepared to consider its abolition. As the United States is by no means the principal supplying country the United Kingdom Government would in the event of their making this concession expect the United States Government to consider sympathetically any reasonable requests which they may wish to put forward for reduction of duties where the United Kingdom is not the principal source of supply to the United States, particularly in cases where other parts of the British Empire are also interested.
5.
In the opinion of the United Kingdom Government the foregoing proposals represent the greatest common measure of agreement which there is any hope of securing among the British Commonwealth Governments concerned. They would involve in varying degree sacrifices by all the countries affected on a scale which would never be contemplated in trade negotiations with any other country. The United Kingdom Government see no prospect that the other Governments concerned would consent to proposals which would involve greater sacrifices on the part of producers who have no large home market and are consequently almost wholly dependent upon export.
6.
The only “essential” requests (apart from those for conventionalization of existing duties) put forward by the United States Government on which the United Kingdom Government are free to offer the concessions set out in the attached statement without the consent of [Page 80] other Empire Governments are items numbered 7, 10, 16 and 17 in the statement.
7.
Then there are several products on which duties are protective in character as well as being guaranteed under Ottawa Agreements. On these requests namely numbers 4, 9 (berries), 11 and wheat the United Kingdom Government can at this stage indicate only their own attitude.
8.
The proposed reduction in duty on tinned loganberries would it is believed substantially meet the United States request on tinned berries. If however there are other varieties of canned berries in which the United States has an important interest the United Kingdom Government would be ready to consider any further request which the United States Government may wish to put forward under this heading.
9.
The United States requests for conventionalisation of existing duties are also being met practically in full.
10.
The United Kingdom Government have gone to the extreme limit on these items and will have to face acute economic and political difficulties to which their offers will unquestionably give rise.
11.
There remain “essential” requests for concessions which affect only other parts of the Empire than United Kingdom. These so far as Canada is concerned have already been the subject of informal conversation between United States and Canadian officials. Australia and the Union of South Africa, are closely affected by the requirements on dried fruits and tinned apricots, pears and peaches. The United States authorities have already had some discussions with Mr. Casey about the possibilities of finding an acceptable solution on these items. Owing to the general election in Australia the United Kingdom Government have been unable to carry the matter any further but for their part they would do their best to facilitate any arrangement which might be reached at a later stage between the United States and the Commonwealth Governments. The United Kingdom Government feel sure that the Government of the Union of South Africa would on their side to do their best to facilitate a solution.
12.
The position with regard to apples presents special features. It is understood that in the informal conversations between United States and Canadian officials referred to above it has been intimated that the greatest modification of the United Kingdom duty which Canada will consider would be a reduction to three shillings and sixpence per cwt. The United Kingdom Government would for their part be ready to accept this figure.
  1. Not printed.