FOREIGN ECONOMIC AND COMMERCIAL POLICY


a basis which does not discriminate against imports from  . . [the
United States] 1 in respect of any product" with certain exceptions.
In view of this commitment the Delegation should make clear that
the United States regards the discussion of discrimination as being
solely for the purpose of determining the consistency of the restric-
tions in question.with the obligations of GATT, without prejudice to
the obligations any of the countries involved may have under other
international agreements. Also, although key Congressmen have been
consulted regarding the Financial Agreement and its relation to
measures taken by the United Kingdom for balance-of-payments
reasons, it would be desirable to conduct any discussion of the extent
of British discrimination with a minimum of publicity.2
  British intensification of restrictions on dollar imports is the case
about which the most information is available, but even in this case
we lack information of the kind needed to determine whether British
practice conforms to GATT, and particularly to Annex J (the Geneva
option). We do not even know to what extent there will be substitution
of imports from soft-currency countries. We do not know, moreover,
at what prices such increased imports are being purchased or the
extent to which they may be paid for under arrangements providing
for increased exportation of products which cannot compete on world
markets or which otherwise might be available for earning convertible
currencies.
  Because the original British import program was presumably drawn
up with a view to obtaining from the United States and other hard-
currency countries mainly commodities not obtainable from sterling
areas, some of the intensification may result in reduction in consump-
tion rather than in new discriminations. Furthermore the one class of
commodities which the British might most easily replace from soft-
currency countries, namely agricultural commodities, is the class
which has been cut the least of all, so that there would be little ground
for contending that our interests have been unnecessarily damaged
in this area.
  As concerns prices, early in 1949 considerable effort was made by an
NAC working group and by the Embassy at London to proving cases
of this sort at the request of the Department of Agriculture, with
very little success. The plan to hand the British a note on the subject
was dropped.

  Brackets appear in the source text.
  2For documentation on the negotiations at Washington leading to the con-
clusion of the Anglo-American Financial Agreement of December 6, 1945, see
Foreign Relations, 1945, vol. vi, pp. 1 ff.: for text see 60 Stat (pt. 2)
1841, TIAS
No. 1545. For discussion of the section 9 problem within the GATT context,
see
Foreign Relations, 1949, vol. I, footnote 9, p. 656, and footnote 2, p. 658.


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