MacDonald retained his position after Baldwin and MacDonald's final retirements in 1937, when together with the new Prime Minister Neville Chamberlain he set about negotiating a new set of agreements with the Irish Free State to resolve disputes over trade, compensation and the Treaty Ports that the United Kingdom still retained.
MacDonald beholdt sin post, efter at Baldwin og Ramsay MacDonald endeligt havde trukket sig tilbage i 1937, da han sammen med den nye premierminister Neville Chamberlain forhandlede nye aftaler med Irland (tidligere Den irske fristat) om handel, kompensation og de havne, som Storbritannien fortsat beholdt.