PZ 1070/40(2) ‘Transmission of F.O. secret packets to & from Consulates etc. abroad’ [‎151v] (303/835)

14
after the war; and the United Kingdom officials put forward arrangements for
a two-phase transitional period which took account of this fact. (See Section I
of Annex G.) This view was stressed by the United Kingdom officials at
Washington, and the United States representatives recognised the need for some
exceptional provision to meet the necessities of the transitional period. (See
Annex H, Section III. paragraph 3.) The United States officials, however,
made it clear, both to the United Kingdom and to the Canadian officials, that it
would not be feasible for the United States to reduce her tariffs unless there were
to be some definite commitment as to the time at which, or conditions on which,
countries would abandon the use of quantitative restriction of their imports.
58. There are two currents of thought on the question whether the conven
tion should provide for an early and drastic cut or for a gradual and step-by-
step reduction in trade barriers. On the one hand, there is the view, shared by the
majority of the delegations, that adjustment to a lower level of protection could
best be effected at the same time as the radical reorganisation which would be
inevitable in the transition from war to peace, so as to avoid the necessity for
conducting reconversion in two stages; that the time would then be ripe and
public opinion ready for the introduction of sweeping measures for the reduction
of restrictions on trade; that the early reduction of tariffs, particularly in the
United States, would make it easier for other countries to dispense with
quantitative restrictions; and that for tariffs to be cut before quantitative
restrictions were abolished would constitute rough and ready justice between
countries which possess well-organised tariffs and those which have hitherto
placed great reliance upon quantitative restrictions.
59. On the other hand, the view is advanced by the Australian representa
tives. that the convention should provide for trade barriers to be reduced
Gradually, in order to allow countries time to adjust themselves to lower levels
of protection. It is argued that the objectives of the Washington proposals
could not be achieved without affecting some industries very seriously indeed;
that Governments would not be willing to face the risk of serious unemployment
at the time when demobilisation was proceeding; that the simultaneous adjust
ment from war to peace conditions and from high to low protection would be
more than many countries could stand, particularly those whose industries have
been dislocated by the war; that smaller countries would need time to see whether
larger countries were willing and able to maintain full employment; and finally,
that the gradual assumption of the more drastic obligations would not interfere
with the attainment of the objectives of the convention, because the transitional
period would be one of scarcities, which would, in any case, encourage importing
countries not to place obstacles in the way of imports.
60. Subject to the above points raised by the Australian delegation^ it has
been agreed that the following might prove a suitable procedure for bringing the
commercial policy convention into force :
(i) A conference of Governments would be held as soon as practicable for
the signature of the convention. 1 he convention would come into
force as soon as it had been accepted by the Governments of countries
which accounted for not less than, say, two-thirds of pre-war world
trade
(ii) Certain obligations under the convention would then become operative.
For example, immediate steps would be taken to build up the inter
national institutions contemplated by the convention. There would
be an immediate obligation on the part of member-States to consult
with each other about their transitional commercial policy arrange
ments, with the two-fold object of ensuring that these arrangements
led as’easily as possible towards the final objectives of the convention,
and that any member-State which felt aggrieved by the action of
another member might have an opportunity of expressing its com
plaint. Finally, there would be certain immediate obligations for the
collection of statistics and the provision of other information on an
agreed basis. The statistical information so collected might pro\e of
great value when the stage was reached for the application of a
multilateral formula for the reduction of tariffs.
(iii) The obligations of the Commercial Convention covering tariffs, pre-
V ferences, export subsidies and State trading should come into force
at the earliest date after the armistice with Germany or Japan, which
ever is the later, that could be agreed upon when the convention is