Taoiseach
I attach copy of Mr. Hearne's memorandum on the Trade Agreement.

POINTS ON FORM OF TEXT OF DRAFT TRADE AGREEMENT¹

1. It is decided to retain the word 'Éire' in the draft Agreement?
2. The expression 'any country not within the British Commonwealth of Nations' occurs throughout the draft Agreement conveying the implication that Éire is a country within the British Commonwealth. The text does not actually mean that Éire is a member of the British Commonwealth; it merely implies it. It is difficult to get any way out of the expression referred to. The British alternative would be 'foreign country' as in the Ottawa Agreements and that would be more objectionable from our stand-point. We could, of course, suggest a Schedule of countries following our own Aliens (Exemption) Order 1935. But this would not really remove the implication. In addition, a device suitable to our own law might not be suitable to an international agreement and presumably would not be acceptable to the other party to this particular Agreement. It is suggested that in the last paragraph of the Letter on the subject of Zinc there is a more definite implication that Éire is a member of the British Commonwealth of Nations than elsewhere throughout the text. This could be remedied by deleting the word 'other' in that paragraph.
3. Article 2 provides for a preferential rate of duty in respect of goods (of Irish origin or consignment) mentioned in Schedule 1 of the draft Agreement. These goods are amongst those covered by the general right of free entry into the British market conferred by Article 1. It would seem at first sight, therefore, that the effect of Article 3 might be to limit, as regards the goods covered by Article 2, the right of free entry secured for those goods, amongst others, by Article 1. This, however, is not the intention². The intention, it is understood, is, that the rate of duty on the goods mentioned in Schedule 1 shall always be nil. It is suggested, therefore, that this intention would be made clearer if Article 2 were so worded as to leave no room for doubt on the form of the text that the rate of the duties of customs chargeable on the goods mentioned in Schedule 1 produced or manufactured in and consigned from Éire on importation into the United Kingdom will be nil.
4. The formal emphasis on the powers of the United Kingdom Government in Articles 3 and 4 is, no doubt, the result of a desire on the part of the United Kingdom Government to reassure British agricultural interests (as a matter of policy) against the possibility of the dumping by Irish producers. Presumably no restriction of Irish trade with the United Kingdom, arising out of the said powers of the United Kingdom Government, is likely to take place. It is not worth while therefore seeking any change in the form of the Articles, or the deletion of any provision of one or the other at this stage.
5. With a view to reducing the number of times in which the expression 'the Government of Éire undertake' appears, would it be desirable to delete Articles 12 and 13 and insert them as additional paragraphs in Article 8 to which they relate?