FOREIGN RELATIONS, 1950, VOLUME


  The British and the Australians have been doing a good deal of
needling of us on the question of the sterling area. For example,
yesterday they said that if they had made clear to the Working Party
the supreme importance of the sterling area, they would be content,
and the Australian said he was glad to note -that we said we recog-
nized the existence of the sterling area. The impression, however, of
their continued needling on this point is, in the minds of observers
and other members of the Working Party, problably that we either
agree or do not care very much about fighting the battle about the
sterling area.
  So, this morning I went over to see Stephen Holmes2 and told him
we were getting fed up with this needling, -that, consciously or un-
consciously, the impression was being given by our refusal to be
drawn into battle that we were tacitly 'accepting their point of view,
and that if this went on very much longer I would have to make a
very strong statement. In any event, I was going to make our views
quite clear in connection with the report. I asked him to pass this
on to the New Zealanders -and to the others in his group. He said he
would do so and that he did not think there would be any more said
on that point by his group.
  We are going to have difficulty, of course, when we come to the
report, and I think we will have to say definitely that while we recog-
nize the existence of the sterling area, we do; not give it anywhere
near the same weight in coming to our conclusions that the British
and the Commonwealth do.
  . We are going to have some difficulty in the Delegation as to whether
we press for a vote of 'the Working Party. Our instructions leave it to
the discretion of the Delegation. George Bronz is inclined to feel that
we should press for a vote. We will not get support even from the
Canadians on this, but we will get support from them on having the
countries identified in the views they express.
  My own feeling at this stage is that if we press for a vote now we
will gain very little and we will have put a very severe strain on the
GATT ,without being in a very strong position to do so. It is certainly
clear that a consultation under 4(b) does not require a vote, although
we have made it clear that 4(b) does not prevent a vote. However, I
think a good argument can be made, and one that would appeal to the
Contracting Parties, that the purpose of 4(b), consistent with the
general pattern of the GATT, is to afford an opportunity for pre-
liminary consultation at which views can be expressed and the Con-
tracting Party to whom admonitions are directed can have a chance to
  2 Sir Stephen Lewis Holmes, Second Secretary, British Board of Trade.


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