FOREIGN RELATIONS, 1950, VOLUME I


  Our study of the facts lead us to the conclusion that there are cer-
tainly restrictions which are now no longer really effective nor neces-
sary because of changed circumstances of price and supply. We are
convinced, with respect to those which are now effective, that the
degree of the current gold and dollar surplus of the United Kingdom
-and the prospects for the future as they can be estimated, with due
regard to the admitted serious uncertainties in the picture, are such
that a significant measure of relaxation of restrictions against imports
from the dollar area is now feasible. *We recognize that the defense
programs may become a highly important factor bearing on the net
dollar earnings of the (United Kingdom and, of course, that priority
under today's circumstances must be given to defense considerations.
Caution in the degree and rate of relaxation is therefore justified.
Nevertheless, my Government is convinced that, with all due caution,
it is possible for the United Kingdom now to begin the progressive
-yelaxation of its restrictions against imports from the dollar area.


International Trade Files, tot 57D28-4, Box 165, Folder "Balance of
Payments"
The Chairman of the United States Delegation to the Fifth Session
   of the Contracting Parties to GATT (Brown) to the Acting
   Director of the Office of International Trade Policy (Leddy)

 PERSONAL AND CONFIDENTIAL           [ToRQUAY,] November 18, 1950.
   DEAR JOHN: The status of the Fifth Session, taking the Agenda,
 GATT/CP.5/1/Rev. 4 of November 10, which I hope you have by
 now, is approximately as follows.
   [Here follows discussion of certain agenda items.]
   We got to the meat of our consultations with the United Kingdom
 yesterday. I opened the discussion by making the enclosed statement.1
 It was greeted with very appreciative remarks by the United King-
 dom delegate and by very friendly comments from the Australian
 and New Zealand delegates in the corridors. The New Zealander said
 that he felt that it was a perfectly proper comment and they had no
 criticism of it whatever.
   We were supported by the Cubans and the Canadians, but nobody
 else around the .table said anything. Almost the whole of the rest of
 the day- was taken up, as much of the previous day's discussion was,
 by an unseemly wrangle about whether or not the Fund was justi-
 fied in presenting the conclusions which it did. The British have
 pressed this point ad nausean?, and are very angry-about it.

   Supra.


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