Discussions Concerning Post-war Trade Policy
     (Article VII of the Mutual-Aid Agreements)
 
                          Summary
 
        In Article VII we and the British and the Russians
pledged ourselves to early agrees action to reduce 
trade barriers as part of a broad program to maintain 
high levels of employment and expand the production, 
consumption and exchange of goods.
 
        The pledge on trade barriers was put in Article VII 
because it is essential to all the rest: to carry out our 
own and Britian's full employment programs, to assure the 
success of the Monetary Fund and International Bank, to 
make possible eventual repayment of the large loans we will 
need to extend, directly and indirectly, to the rest of the 
world.
 
        Unless we and the British get together urgently, while
the political and trade situation is favorable, on. ade-
cuate measures in the field of commercial policy (lnclud-
ing cartels and commodity arrangements), there is grave
danger that our whole foreign economic program may be
undermined. While satisfactory exploratory talks on a
commercial-policy plan were held with the British (on the                                 
technical level) in late 1943, the British have not ap-
peared eager to resume discussions.
 
        We are convinced that unless you bring your strong 
personal influence to bear on the Prime Minister and urge 
him to get these discussions started promptly, on the min-
isterial level and on a more definitive basis than those 
held earlier, the British cabinet will continue to post-
pone these matters indefinitely. This would be fatal to 
all our hopes.
 
        To date, the Russians have not accepted any of our 
invitations to conduct exploratory Article VII conversa-
tions. We are prepared to hold such exploratory talks 
immediately and when we are ready to have formal discussions 
with the British we will be in a position to schedule
formal discussions with the Russians and others.
 
Recommendations
       It is strongly recommended (1) that you point out to 
Mr. Churchill and Mr. Stalin your personal interest in, and 
the critical importance and urgency of, commercial-policy 
measures to implement Article VII; and (2) that you urge 
them to facilitate the necessary intergovernmental discus-
sions preparatory to a United Nations international trade 
conference.