Office of the Historian

611.0031 Executive Committee/8–1145: Telegram

The Ambassador in the United Kingdom (Winant) to the Secretary of State

London, August 11, 1945—4 p.m.
[Received 5:25 p.m.]

8132. Part I.

1.
Clayton, Hawkins, Stinebower, Fowler67 and Penrose had a meeting with Liesching, Eady, Keynes, Robbins, Brand and Shackle at Board of Trade, August 4.
2.
Clayton said US determination to move towards objectives of article VII had been shown by recent action in Bretton Woods and Reciprocal Trade Act. It was now time to move forward with something concrete in commercial policy and to take the opportunity while it lasted. Substantially enhanced powers had been obtained under new act but the US is not in a position to go into conference with object of making horizontal cuts in tariffs. Both language of act and assurances given in hearings prevented use of act for horizontal cut. Any such cut would have to be submitted to Congress and pressure would be too strong. Clayton thought however that we had a way to negotiate number of tariff agreements quickly and then call an international conference to deal with other restrictions.
3.
Clayton, Hawkins and Stinebower explained Proposal D (ECEFP D–104/45).68 Copy of Proposal D as approved by committee, with part on advantages and disadvantages omitted, was given to the British.
A discussion followed in which UK officials expressed substantially the views summarized below.
4.
UK officials were particularly concerned regarding the number of bilateral negotiations involved in the US proposal. Keynes considered the bilateral procedure impracticable. Liesching said that it would be impossible to find enough teams of qualified officials to negotiate with a number of countries simultaneously. Shackle thought [Page 91] that if the discussions were bilateral they would “drag on interminably.” Liesching said bilateral pacts had taken from 5 to 29 months with average of 12 months.
5.
Keynes, Eady, Liesching and Robbins took position that even if it had to be assumed that tariff cuts must be selective and not uniform percentage cuts, it did not necessarily follow that the negotiations must be carried on by separate bilateral discussions. Keynes said that each country should come into a conference of the nuclear group prepared to say what concessions it would make to the other countries and on what conditions. Robbins said there was all the difference in the world between separate discussions in pairs and negotiations in a combined group on a selective basis.
6.
UK officials maintained that tariff and non-tariff restrictions should be discussed simultaneously and in part at least by the same officials. If they were dealt with separately the assumptions made in non-tariff restrictions during the tariff discussions might not be borne out in practice and tariff cuts agreed tentatively would have to be renegotiated and revised. UK officials thought the nuclear group should all be assembled together for both tariff and non-tariff discussions, which might be taken up at separate meeting in the same conference, Liesching emphasized that many of the trade obstacles facing UK were non-tariff and it was difficult to take any action on tariff without knowing what was to be done on the other aspects of trade restrictions.
7.
Liesching asked what approaches could be made to non-nuclear countries pending a conference. The UK had been embarrassed by frequent inquiries from European countries as to its general views on post-war trade. He did not think they could remain tongue-tied much longer.

Part II.

8.
A second informal meeting was held on August 9 between Hawkins, Stinebower, Fowler and Penrose and Liesching, Robbins, Hall-Patch,69 Stirling70 and Shackle. Views expressed by UK officials on the latest US suggestions were substantially as follows:
9.
The UK officials spoke in strong terms against the idea of separating the discussion of preferences from the tariff discussions and taking them up along with non-tariff restrictions. Liesching said they had hoped in view of previous explanations of the position in UK this would not have been suggested. They had always made it clear that preferences were a part of a context involving tariff negotiations. If the horizontal treatment of tariffs went overboard then horizontal treatment of preferences must go too.
10.
Robbins said the central point was the relation of the proposals to the political situation here. The proposed separation of tariffs and preferences increased the difficulty. He added that “the brute fact of the political situation on this point is not affected by any change of governments”. Liesching added that these US proposals had put the whole matter into “a quite unmanageable position”. He referred to Bevin’s speech at the Labor Party conference71 and said that UK officials were now placed in a most embarrassing position from the point of view of getting ministers to agree to commercial policy measures.
11.
UK officials strongly criticized US proposals on quotas, maintaining that the provisions would permit quotas on the whole front. They did not agree that the provision that corresponding domestic restrictions must be imposed was a satisfactory check on the undue use of quotas. Shackle and Robbins maintained that it was most difficult to ascertain by how much domestic production was effectively restricted and whether such restriction was equivalent to the import restriction.
12.
Liesching, Robbins and Shackle objected to the proposals for subsidies on commodities in world surplus. Robbins said the main objection was to the idea that once it was agreed that a burdensome world surplus existed there should be a “free-for-all” struggle with the use of export subsidies as a bludgeon to compel agreements that might not be satisfactory to all parties. Shackle said that distress at home should not be relieved by creating disturbances in other countries.
13.
The general attitude of UK officials at this meeting was extremely pessimistic.
14.
A full meeting will be held on August 13.72 Officials have not been able to place these questions before the new cabinet. In conformity with a proposal made at Potsdam73 UK suggests sending a delegation to Washington in September on trade, financial and related matters. Clayton has indicated that he will arrange after his return to have this proposal considered.
Winant
  1. William A. Fowler, First Secretary and Consul, London.↩
  2. ECEFP D–104/45 not printed; for text of accompanying memorandum as well as an explanation of Proposal D, see p. 74.↩
  3. Edmund L. Hall-Patch, Assistant Under Secretary of State, British Foreign Office.↩
  4. Presumably John A. Stirling, Assistant Secretary, British Board of Trade.↩
  5. Reference is to a speech made by Ernest K. Bevin at the Annual Conference of the British Labor Party at Blackpool on May 23, 1945; for text, see the London Times, May 24, 1945, p. 2, col. 2.↩
  6. Presumably this meeting was postponed until Wednesday, August 15; see telegram 8289, August 16, 5 p.m., from London, p. 94.↩
  7. See Conference of Berlin (Potsdam), vol. ii, p. 1181.↩