560.AL/12–447: Telegram

The Ambassador in Cuba (Norweb) to the Secretary of State

confidential   us urgent

709. For Clayton from Wilcox State Department distribution only. Australians had reserved position on Article 24 Paragraph Two Geneva draft which established finality monetary fund determinations on balance of payments escape clause. They have now introduced amendment destroying finality fund determination.1 I told Coombs2 existing provision imperative if administration is to recommend charter to Congress. He promised to write Chifley3 in detail on matter but says delegation under strict instructions cannot change position without Chifley’s approval, says Australian Government opposing us because US used political influence in fund to prevent election Australia as director. Luthringer4 says however we agreed elect Australia to subsequent vacancy. Suggest (1) you inquire as to situation in fund, (2) take question up with Australian Ambassador in Washington and (3) instruct American Ambassador Canberra to see Chifley before latter leaves for Christmas in New Zealand and inform him US Government believes Australian position this issue most serious threat to success Habana conference and may destroy any prospect ratification charter in US.

When we agreed to relax provisions against discrimination in charter and trade agreement Geneva French Cabinet consented to support US on finality fund determinations as quid pro quo. Did not reserve position of Article 24 Paragraph Two yesterday without warning French Delegation attacked this provision in open meeting. I saw [Page 806] Philip Richard and Royer5 today told them US regarded attack as breach of Geneva understanding, said we would oppose France on every point in charter unless position reversed, said there would be no charter and no ITO if Australia and France defeated us on this point. Philip replied he was under instructions. I informed him I would report immediately to you and matter would probably be taken up directly with his government.

Australia and France are both bound by finality fund determination in corresponding article general agreement tariffs and trade.6 If charter defeated they can escape from this provision only by repudiating general agreement. In this case they lose all concessions made to them by twenty other countries. This issue is crucial. Believe we should use all possible pressure to whip them into line. [Wilcox.]

Norweb
  1. For a more complete exposition of this point see: Deptel 4419 to Paris infra.
  2. Dr. Herbert C. Coombs, Director General, Ministry of Post War Reconstruction and Head, Australian Delegation at Habana.
  3. Joseph B. Chifley, Australian Prime Minister.
  4. George F. Luthringer, United States Alternative Executive Director, International Monetary Fund.
  5. André Philip, formerly French Minister of National Economy; Jean Richard, Deputy Director, Ministry of National Economy; and Emile Royer, Ministry of National Economy.
  6. For the text of the Protocol of Provisional Application of the General Agreement on Tariffs and Trade (GATT) concluded at Geneva, Switzerland on October 30, 1947, see Department of State Treaties and Other International Acts Series (TIAS) No. 1700 (two volumes), or 61 Stat. (pts. 5 and 6). For a brief description of the General Agreement and related documents, see Foreign Relations, 1947, vol. i, pp. 10211024.