You will be aware that towards the end of September we received an enquiry from the interim Commission for the International Trade Organisation as to whether we would be prepared to participate in tariff negotiations under the General Agreement on Tariffs and Trade scheduled to begin in September 1950. This enquiry arrived at the same time as the Minister for Industry and Commerce had circulated to Departments for their observations a Draft Memorandum to the Government covering the reports of the Foreign Trade Committee on the Havana Charter. The Foreign Trade Committee had been instructed by a decision of the Government of the 31st December last to examine the Charter and prepare a report on the effect of its entry into force on our economy in the event of its being accepted by us and of its not being accepted by us. The Committee formulated two recommendations, viz., that we should accept the Charter if and when it is clear that it will come into force with a substantial membership, including Britain and the U.S.A., and that, if the Trade Organisation does not in the meantime come into being, we should accept an invitation to take part in the next round of tariff negotiations under G.A.T.T. These recommendations were adopted by the Minister for Industry and Commerce and incorporated in his Draft Memorandum to the Government.

The enquiry received from the interim Commission for the International Trade Organisation asked us to indicate our attitude by the end of October. The Government has not yet, however, as you know, had an opportunity of considering the problem, as the Memorandum from the Minister for Industry and Commerce has not come before it. I understand that the reason for the delay in submitting the memorandum is that your Department as well as the Department of Agriculture and the Industrial Development Authority have not so far furnished their observations thereon.

It seems to me that the recommendations reached by the Foreign Trade Committee and adopted by the Minister for Industry and Commerce are, on the whole, sound. We can hardly expect to stand aside, without detriment to our foreign trade, from the main current of developments in the field of international trade. We know that the Americans are particularly keen on having the principles in G.A.T.T. extended to the widest possible area of international trade and we have, of course, undertaken, both under the Convention for European Economic Co-operation and under the Economic Co-operation Agreement with the U.S.A. to reduce barriers to international trade. It seems to me that if we do not soon display some active interest in the question of succession to G.A.T.T. we are likely to find ourselves at variance with the trading policies and trends in Western European countries as well as in countries of importance to us for various reasons, such as the U.S.A., Canada and Australia. We are bound, I think, to be subjected to some pressure to take action in the direction laid down in G.A.T.T. and it would seem to be in our own interests to ensure that we take such action in an atmosphere which would tend to limit the extent of the concessions to be made. Tariff negotiations under G.A.T.T., at which no country will be anxious to go further than necessary and one may therefore reasonably rely on support for an attitude of limiting concessions to the minimum while preserving the appearance of willingness to co-operate, would seem to provide the most suitable context. We must remember, on the other hand, that, whereas we have hitherto had the benefit of the tariff reductions negotiated at Geneva by the contracting parties (including Britain, Belgium, France and the Netherlands), we may not continue to enjoy them much longer unless we become a party to G.A.T.T. Most Western European countries have indeed already subscribed to the Agreement. There is, however, a time element involved in the whole question, as the next round of negotiations under G.A.T.T. may conceivably provide the last opportunity for discussing the subject around the Conference Table and if we wish to participate in those negotiations it is necessary that we make known our attitude without delay. Perhaps in the circumstances you will be so good as to have the observations of your Department on the Draft Memorandum circulated at the end of September furnished to the Department of Industry and Commerce as soon as possible.