Memorandum by the Department of External Affairs on Commercial Treaties

The Executive Council decided on 10th July, 1928,¹ that the general basis on which Commercial Treaties should be negotiated was that of mutual most-favoured nation treatment, with a reservation of Commonwealth preference. On 11th December, 1929,² the Council approved the form of a Treaty which had been negotiated with Germany on that basis. In the German Treaty the specific matters in respect of which preferential treatment is reserved are expressly defined.

Further Treaties are now being negotiated and the question has arisen as to whether the Executive Council's decisions authorise their being negotiated, where the circumstances render it necessary, in the form adopted in the German Treaty. The particular point that arises is as to whether the Minister for Industry and Commerce is authorised to repeat the specific definition in the German Treaty of the matters in regard to which commonwealth preference is reserved where that course is necessary to secure the agreement of the other country with which a Treaty is being negotiated or whether a further decision of the Council is required to give him that authority.

It will be appreciated that with mutual most-favoured nation treatment as the basis of all Treaties the preference specifically reserved with one country, e.g. Germany, will be that which in effect will be reserved with others. While it is desirable, where agreement is possible, to reserve preference in general terms there is no prejudice to Saorstát interests if, in order to get a Treaty concluded which it is desirable to conclude in the interests of Saorstát trade, preference is defined in a new Treaty in the same specific terms as have been adopted in the previous Treaty approved by the Executive Council. A decision is therefore sought to the effect that it is a matter for the discretion of the Minister for Industry and Commerce in the circumstances of each particular case whether preference is reserved in general terms or in such specific terms as have already been approved by the Council in another case.