FOREIGN ECONOMIC AND COMMERCIAL POLICY


duty-free importation .of supplies for use in emergency relief work,
it would, in my opinion, be most inappropriate to offer to take such
action in connection with tariff negotiations and as an alternative to
a tariff concession. 'There is, of course, no question as to the appro-
priateness of making a concession on wool with the right reserved to
withdraw that concession by a Presidential Proclamation stating that
the abnormal situation regarding wool had ceased to exist. There is
no reason to believe, however, that Australia and New Zealand would
con-sider that such 'an offer by the United-States provided a basis for
negotia'tions. Alt the present time the success of the Torquay confer-
ence is being seriously endangered by insistence on the plart of 'a num-
ber of countries, in particular France, on withdrawing a substantial
number of the concessions negotiated by those countries at Geneva. and
Annecy. The United States has taken the lead in urging that such
withdrawals be held to 'a minimum. Our influence in guiding the con-
ference to a successful conclusion would, in my opinion, be greatly
reduced if we were to offer to Australia and New Zealand 'a purely
emergency concession on an item which is of such vital impoitance
to these countries. Such action would greatly discourage the confer-
ence 'at a very critical stage. At best it would prolong the negotiations
with Australia and New Zealand, as well as with the other Common-
wealth countries involved in the preferential system. Insistence on
maintaining a limited offer on wool would, in my judgment, eventually
result in failure to conclude negotiations with Australia 'and New
Zealand (wool finer than 44's accounted for 98 percent of United
States imports in 1948 of items on the offer list for Australia). Fur-
thermore, if in ;the circumstances it w'as possible to conclude nego-
tiations with the United Kingdom, only very limited results could
be expected. It should also be noted that the Australians have only
recently agreed, after extended negotiations, to participate in a set-
aside arrangement for wool which is designed to; ensure adequate
supplies of wool for United States military requirements.
   Should the suggestion be made that the United States make an
 initial offer to the Australians along the lines proposed by the De-
 partment of Agriculture with authority to recede to the concession
 already approved by the President, it is believed that this course of
 action would be undesirable. It is the view of the Chairman of the
 United States Delegation at Torquay that such tactics would be wholly
 unproductive and would only serve .to dishearten the conference, to
 prolong the negotiations and to endanger their successful outeome.
   I therefore recommend that no change be made in the offer approved
 by the President.
                                                    DEAN ACHESON


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