Foreign Relations of the United States, 1947, General; The United Nations, Volume I

Lot 65A987, Box 101

Memorandum by the Director of the Office of International Trade Policy (Wilcox) to the Under Secretary of State (Lovett)

[Washington,] October 10, 1947.

Win Brown just called from Geneva to tell me Mr. Bevin has instructed Lord Inverchapel to call upon the Secretary and inform him that the United Kingdom is prepared to conclude a tariff agreement with us on the terms worked out during the last two weeks in Geneva with one exception.¹

The British negotiators had tentatively agreed to reduce the preferences that the U.K. enjoys in the Colonies by 25 percent. This reduction was to be contingent upon our holding synthetic rubber production in the United States to a figure below 250,000 tons or 25 percent of our consumption. Mr. Clayton today reluctantly agreed to this arrangement.

The British Cabinet has now refused to agree to the reduction in Colonial preferences. The U.K. desires, however, to retain the restraint on our production of synthetic rubber. They therefore propose to tie it to the reduction they had promised us in their tariff on canned fruits. Under present circumstances this would amount to the withdrawal of the canned fruit concession.

The synthetic rubber provision would be embarrassing to us in any case. In the context previously proposed (as a string on the reduction of Colonial preferences) it might have been accepted and defended. In the new context (as a string on the canned fruit concession in the U.K.) it is utterly indefensible.

The Ambassador should be told that we) cannot accept this particular arrangement in the tariff agreement. The door to the completion of the agreement, on other terms, should not be closed. The British should be invited to conclude the negotiation in Geneva where all the facts are in hand.

Since this is the only issue still outstanding, the completion of the agreement should clearly be possible, even if we reject the British proposal on this point.

1. Lord Inverchapel met Secretary Marshall in New York on October 10, and handed him an aide-mémoire that covered the British objections to the plan of concessions that had been worked out in Geneva by Brown and Helmore. “Lord Inverchapel stated the British belief that continuation of negotiations was of first importance. I [Secretary Marshall] reminded him of my previous promise to make no decision until the British were afforded opportunity to make further proposals.

   “There followed a brief discussion of the British area of disagreement as covered in the aide-mémoire, with neither Lord Inverchapel nor myself making any commitments or decisions, except to agree that the British ‘Board of Trade’ language was difficult to comprehend.” (Secretary Marshall’s memorandum of conversation and the British aide-mémoire are in the 560.AL/10–1047 file.)