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GATT Library | rn969sk7426 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, August 22, 1947 | United Nations. Economic and Social Council | 22/08/1947 | official documents | E/PC/T/TRF/101, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/rn969sk7426 | rn969sk7426_90260120.xml | GATT_154 | 127 | 852 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
SECRET
E/PC/T/TRF/ 101
22 A ugust, 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Tariff Negotiations
The following meetings have been arranged for Saturday, 23 August:
Negotiating Countries
Brazil - New Zealand
Number of
Meeting
3rd
Australia - Cuba
Time
9 30
10.00
Room
Number
101
435
DEUXIEME SESSION DE LA COMMISSION PREPRATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L'EMPLOI
DE L'ORGANISATION DES NATIONS UNIES
Négociations Tarifaires
Les rèunions suivantes ont été prévues pour le samedi 23 août:
Pays participant
aux négociations
Brésil - Nouvelle Zélande
Numéro de
la réunion
3ème
Numéro de
Heure la salle
9.30
101
Australie - Cuba
NATIONS UNIES
3 ème
10. 00 435 |
GATT Library | qn012yy2920 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, October 14, 1947 | United Nations. Economic and Social Council | 14/10/1947 | official documents | E/PC/T/TRF/146, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/qn012yy2920 | qn012yy2920_90260165.xml | GATT_154 | 173 | 1,277 | ECONOMIC CONSEIL E/PC/T/TRF/146
AND ECONOMIQUE 14 October 1947.
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Tariff Negotiations
No meetings have been fixed for Wednesday, 15th October 1847.
Nate The Secretariat has been advised that the following
additional meetings took place on Friday, 10 October,
Saturday, 11 October, Monday, 13 October and
Tuesday, 14 October:
Australia - Newfoundland 2nd meeting
Benelux - France 59th, 60th, 61st and
62nd meetings
France - United States 46th and 47th meetings
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE
DE LA CONFERENCE DES NATIONS UNIES SUR LE
COMMERCE ET L'EMPLOI.
Négociations tarifaires
Aucune séance n'a été fixée pour le mercredi 15 octobre 1947.
Remarque : Le Secrétariat a été avisé que les séances
supplémentaires suivantes ont eu lieu les vendredi
10 octobre, samedi 11 octobre, lundi 13 octobre et
mardi 14 octobre:
Australie - Nouvelle-Zélande 2ème séance
Benelux - France 59ène, 60ème, Clème et
62ème séances
France - Etats-Unis 46ème et 47ème séances
UNITED NATIONS
NATIONS UNlES
SECRET |
GATT Library | sd679hj1715 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, August 19, 1947 | United Nations. Economic and Social Council | 19/08/1947 | official documents | E/PC/T/TRF/98, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/sd679hj1715 | sd679hj1715_90260117.xml | GATT_154 | 254 | 1,583 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
E/PC/T/TRF/98
ET SOCIAL
19 August 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Tariff Negotiations
The following meetings have been arranged for Wednesday 20 August:-
Negotiating Countries
Brazil - South Africa
Brazil - Norway
Benelux - China
Australia - China
Benelux - France
Benelux - United Kingdom
Chile - India
Benelux - United Kingdom
Brazil - France
France - United Kingdom
Lebanon-Syria -- United States
Number of
Meeting
3rd 3rd 9th 5th
34th
27 th
4th
28th 5th 14th
12th
Time
10. 00
10. 30
10.30 10.30
10.30
10.45
3 .00
3. 00
3.30
3.30
5.00
Room
Number
400
400
435
Sténodactylo 3
18
400
402B
402A
402A
18
435
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L 'EMPLOI
DE L'ORGANISATION DES NATIONS UNIES.
Négociations Tarifaires
Les réunions suivntes ont ééé4 péevues pour le mercredi 20 oûi:;
Pays participant
aux éngoications
Bérsil - Unoin Sud Africaine
Bérsil - Norvege
Benelux - Chine
Australie - Chine
Benelux - France
Benelux - Royaume Uni
Chili - Inde
Benelux - Royaume Uni
Bérsil - France
France - Royaume Uni
Liban-Syrie - Etats Unis
Nuémro de
la érunion
3é3
mem
5
34
27
28é5é14ééé4
eec
me
éme
éme
éme
éme
éme
éme
éme
12éme
Heure
10.00
10.30
10.30
10.30
10 30
10.45
15.00
15.00
15.30
15 30
17.00
Numéro de
la salle
400
400
402A
435
Sténodactylo
18
400
402B
18
435
3
SECRET
NATIONS UNIES |
GATT Library | rr857yv6221 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, September 17, 1947 | United Nations. Economic and Social Council | 17/09/1947 | official documents | E/PC/T/TRF/123, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/rr857yv6221 | rr857yv6221_90260142.xml | GATT_154 | 229 | 1,566 | UNITED NATIONS' iA ! -,
ECONOMIC
AND
SOCIAL COUNCIL
CONS IL
E 'SOCIA
ET SCCIAL
E/9&/T/TRF/123
17 September 1947
SECOND SESSION OF THE PREPARAPTORY COMMITTEE OF THE
UNITED TRTIONS CONFERENCE ONT rADE AND EMPLOYMENT.
TARIFF NEGOTIATIONS
The following meetings have been arranged for Thursday,
18 September:
Ne~otiating Cotitries
Czechoslovakia - France
France - United States
Cuba - United States
Number rf
N Eetzin ,- '' ,. - ime
2Oth
26th
55tl
10 00
10.30
3,00
Room Number
Stenodactyl 3
402A
Salle de Comite
L-4.
NOTE: In gddition to the meetin,s listed in E/PC/T/TRF/122, the
Secretariat has been notified that the following additional
meetings were held on Wednesday, 17 September:
Cuba - United Statec
Czechoslovakia - United Kingdom
SECRET
E/PC/T/TRF/123
17 septembre 1947
DEUXMEME SESSION DE LA COM\ISSION PREPARATOIRE
MMERA CONFERELCEMDU CO>A4ECE ET DE l'E1PLOI
DE LEORGANISATION DES NATIONS UNIES.
NEGOCTATTONS TARIFAT-ES.
Les éeé prèv suivantes ont 6t6lrtvues pour le jeudi 18
septembre:
Pays prenant part
aux negociations
Tchdcoslovaquie - France
France - Etats-Unis
éuba - Etats-Unis d'Amerique
Num6ro d~ord3re
de la stance Heure Salle
2O6ni
26 6r.
5, o e
j. :.C
10,L
Stdnodactyl 3
402-A
Salle de Comite
L-4.
éOTE: En plus des seancues dont la liste figre au document
E/Pé/T/TRF/12é,éle Seér6tariat a et6 avise que les
s6ances supplementaires suivantus ont eu lieu le mercredi
17 septembre:
Céba- Etats-Unis d'Am6rique
ume-cos3 irevi..p' '.,.Uni
SECRET
NAT.'] I V r |
GATT Library | xg578pt7279 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, August 26, 1947 | United Nations. Economic and Social Council | 26/08/1947 | official documents | E/PC/T/TRF/104, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/xg578pt7279 | xg578pt7279_90260123.xml | GATT_154 | 161 | 1,091 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
SECRET
E/PC/T/TRF/104
26 August 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Tariff Negotiations
The following meetings have been arranged for
27 August:
Negotiating Countries
New Zealand - United States
Brazil - United States
Brazil - United Kingdom;
Norway - Burma
Number of
Meeting.
2nd
6th
7th
3rd
Wednesday,
Room
Time Number
9.30 Salle de
Comité L 4
10.00 402C
10.45 402B
3.30 0402A
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L'EMPLOI
DE L'ORGANISATION DES NATIONS UNIES
Négociations Tarifaires
Les réunions suivantes ont été prevues pour le mercredi
27. août:
Pays participant
aux négociations
Nouvelle-Zélande - Etats-Unis
Brésil - Etats-Unis
Brésil - Royaume-Uni
Numéro de
la reunion Heure
2 ème
6 ème
7 ème
Numéro de
la Salle
9.30 Salle de
Comite 14
10.00 402C
10.45 402B
Norvège - Birmanie
NATIONS UNIES
3 ème
1 5.30 402A |
GATT Library | xg598gh8813 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, September 12, 1947 | United Nations. Economic and Social Council | 12/09/1947 | official documents | E/PC/T/TRF/119, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/xg598gh8813 | xg598gh8813_90260138.xml | GATT_154 | 165 | 1,136 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
SECRET
E/PC/T/TRF/119
12 Septermber 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Tariff Negotiations
The following meeting has been arranged for Saturday, 13
September:
Negotiating Countries
Benelux - United States
Number of
Meeting
33rd
Time
10.00
Room
Number
Selle de Comite
L. 4
NOTE: The Secretariat has not been notified of any other
meetings held on Friday, 12 Septem.iber, in addition to
those listed in E/PC/T/TRF/118.
DEUXIEME SESSION DE LA. COMMSSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L'EMPLOI
DE L'ORGANISATION DES NATIONS UNIES
Négociations tarifaires
La séance suivante a été prévue pour le samedi 13 septemLre
Pays prenant Dart
aux négociations
Numéro de la
séance
Salle
Heure Numer;
Benelux - Etats-Unis
3èeme
10.00 Salle de
o miè6 L,4
NOTE : Le Secé6tariat n'a pasé6éA inforée que d'autres é6ances
aient eu lieu, le vendredi 12 septembre, en plus des
é6ancesé6nméaé6es dan's le document E/PC/T/TRF/18:.
NATIONS UI1ES |
GATT Library | wm989mf3295 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, September 23, 1947 | United Nations. Economic and Social Council | 23/09/1947 | official documents | E/PC/T/TRF/128, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/wm989mf3295 | wm989mf3295_90260147.xml | GATT_154 | 249 | 1,991 | UNITED NATIONS
ECONOMIC CONSEIL SECRET
AND ECONOMIQUE E/PC/T/TRF/128
SOCIAL COUNCIL ET SOCIAL 23 September 1947
SECOND SESSION OF THE. PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Tariff Negotiations
The following meetings have been arranged for Wednesday,
24 September 1947:
Number of
Negotiating Countries Meeting Time Room Number
Ceylon - China 4th 9.30 402B
Australia - Czecho- 5th 10.00 435
slovakia
Benelux - France 53rd 10.30 Stenodactyl 3
France - India 8th 3.00 400
France - United States 31st 5.00 402A
Note: The meeting listed in E/PC/T/TRF/127 between Benelux
and France was cancelled. The Secretariat has been
informed that in addition to the meetings listed in
E/PC/T/TRF/127 the following additional meeting was
held on Tuesday, 23 September:
China - Cuba
DEUXIEME SESSION DE L. COMMISSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L'EMPLOI
DE L'ORGANISATION DES NATIONS UNIES
Négociations Tarifaires
Les séances suivantes ont été prévues pour le mercredi,
24 septembre 1947:
Pays participant Numero de Numéro de
aux négociations la reunion Heure la salle
Ceylan - Chine 4ème 9.30 402B
Australie - Tchéco-
slovaquie 5ème 10.00 435
Benelux - France 53ème 10.30 Stenodactyl 3
France - Inde 8ème 15.00 400
France - Etats-Unis 31ème 17.00 402A
N.B. La séance prévue dans le document E/PC/T/TRF/127 entre
Benelux et France a été annulée. En plus des seances
dont la liste figure au document E/PC/T/TRF/127, le
Secretariat a été avisé que la stance supplémentaire
suivante a eu lieu le mardi, 23 septembre:
Chine - Cuba
NATIONS UNlES |
GATT Library | wd102bm5835 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, October 16, 1947 | United Nations. Economic and Social Council | 16/10/1947 | official documents | E/PC/T/TRF/148, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/wd102bm5835 | wd102bm5835_90260167.xml | GATT_154 | 75 | 525 | UNITED NATIONS.
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
16 October 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
Tariff Negotiations
No meetings have been fixed for Friday, 17 October 1947.
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE DE
LA CONFERENCE DU COMMERCE ET DE L'EMPLOI DE
L'ORGANISATION DES NATIONS UNIES.
Négociations Tarifaires
Aucune réunion n'a été prévue pour le vendredi, 17 octubre 1947.
NATIONS UNIES
SECRET |
GATT Library | rj665wj3407 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, September 30, 1947 | United Nations. Economic and Social Council | 30/09/1947 | official documents | E/PC/T/TRF/134, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/rj665wj3407 | rj665wj3407_90260153.xml | GATT_154 | 183 | 1,271 | UNITED NATIONS
SECRET
ECONOMIC
AND
SOCIAL COUNCIL
CONSElL
ECONOMIQUE
ET SOCIAL
E/PC/T/TRF/134
30 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
Tariff Negotiations
The following meeting has been arranged for Wednesday,
1st October 1947:
Negotiating Countries
Czechoslovakia - France
Number of
Meeting
22nd
Time Room Number
10.00 Stenodactyl 3
Note: The Secretariat has been informed that in addition to
the meetings listed in E/PC/T/TRF/134, the following
additional meetings were held on Tuesday, 30 September:
India - China 5th meeting
United States - China
DEUXIEME SESSION DEL LA COMMISSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L'EMPLOI
DE L'ORGANISATION DES NATIONS UNIES
Négociations Tarifaires
La séance suivante a été prévue pour le mercredi,
1 Octobre, 1947:
Pays participant
aux négociations
Numéro de
la réunicn
Tchécoslovaquie - France 22ème
10.00 Sténodactyl 3
Note: En plus de séances dont la liste figure au document
E/PC/T/TRF/133, le Secrétariat a été avisé que les
stances supplémentaires suivantes ont eu lieu le
mardi, 30 Septembre
Inde - Chine 5ème-réunion
Etats-Unis - Chine
Heure
Numéro de
la salle
NATIONS UNIES |
GATT Library | rd898tz7723 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Information Center Geneva, April 22, 1947 | United Nations Information Center Geneva | 22/04/1947 | press releases | Press Release No.71 and PRESS RELEASE NO.36-354 | https://exhibits.stanford.edu/gatt/catalog/rd898tz7723 | rd898tz7723_90260216.xml | GATT_154 | 788 | 5,832 | UNITED NATIONS
Information Center
Geneva.
Press Release No.71
22 April, 1947.
SECOND SESSION
OF THE
PREPARATORY COMMITTEE
OF THE-
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYEMNT
Tariff Negotiations
The schedule below shows the dates which it has been
possible to establish for the exchange of lists of offers
of tariff concessions between members of the Preparatory
Committee.
Tariff negotiations shall be deemed to have commenced
when on the dates established negotiating teems from any
two members meet and exchange such lists of offers.
Mr. .E Wyndham-White, Executive Secretary of the
Preparatory Committee, will hold this afternoon at 5 p.m.
in RoomH - 3 a press conference o nthis plan of work.
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
- Belgium-Netherlands-Luxemburg
- Brazil
- Canada
- Chile
- China
- Cuba
- Czechoslovakia
- France
- India
- Lebanon-Syria
- New Zealand
- Norway
30 May
20M ay
17 May
30 May
30 April
28 May
7 May Press Release No.71
Page 2.
Australia - Union f South Africa
Australia - United Kingdom
Australia - United States
Belgium-Netherlands-Luxemburg - Brazil
Belgium-Netherlands-Luxemburg - Canada
Belgium-Netherlands-Luxemburg - Chile
Belgium-Netherlands-Luxemburg - China
Belgium-Netherlands-Luxemburg - Cuba
Belgium-Netherlands-Luxemburg - Czechoslovakia
Belgium-Netherlands-Luxemburg - France
Belgium-Netherlands-Luxemburg - India
Belgium-Netherlands-Luxemburg - Lebanon-Syria
Belgium-Netherlands-Luxemburg - New Zealand
Belgium-Netherlands-Luxemburg - Norway
Belgium-Netherlands-Luxemburg - Union of
South Africa
Belgium-Netherlands-Luxemburg - United Kingdom
Belgium-Netherlands-Luxemburg - United States
Brazil - Canada
Brazil - Chile
Brazil - China
Brazil - Cuba
Brazil - Czechoslovakia
Brazil - France
Brazil - India
Brazil - Lebanon-Syria
Brazil - New Zealand
Brazil - Norway
Brazil - Union of South Africa
Brazil - United Kingdom
Brazil - United States
28 May
23 April
9 May
10 May
30 May
14 May
12 May
30 May
21 May
9 May
14 May
12 May
10 May
12 May.
21 May
9 May
8 May
30 May
8 May
9 May
26 May
15 May
9 May
30 May
17 May
30 April - Chile
- China
- Cuba
- Czechoslovakia
- France
- India
- Lebanon-Syria
- New Zealand
- Norway
- Union of South Africa
- United Kingdom
- United States
- China
- Cuba
- Czechoslovakia
- France
- India
- Lebanon-Syria
- New Zealand
- Norway
- Union of South Africa
- United Kingdom
- United States
- Cuba
- Czechoslovakia
- France
- India
- Lebanon-Syria
- New Zealand
- Norway
- Union of South Africa
Press Release No.71
Page 3.
14 May
5 May
5 May
23 April
25 April-
1 May
30 April
23
19
19
21
15
April
May
May
May
May
12 May
26
28
30
1
25
19
7
13
5
May
Aprie
April
May
April
May
May
May
May
Canaad
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
aCnaad
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
China
China
China
China
China
China
China
China Press Release No.71
Page 4.
China - United Kingdom 8 May
China - United States 9 May
Cuba - Czechoslovakia 30 April
Cuba - France 2 May
Cuba - India 21 May
Cuba - Lebanon-Syria
Cuba - New Zealand 13 May
Cuba - Norway 5 May
Cuba - Union of South Africa 15 May
Cuba - United Kingdom 30 April
Cuba - United States 12 May
Czechoslovakia - France 22 May
Czechoslovakia - India 9 May
Czechoslovakia - Lebanon-Syria 15 May
Czechoslovakia - New Zealand 30 April
Czechoslovakia - Norway 12 May
Czechoslovakia - Union of South Africa 5 May
Czechoslovakia - United Kingdom 27 May
Czechoslovakia - United States 23 April
France - India 12 May
France - Lebanon-Syria 29 April
France - New Zealand 10 May
France - Norway 30 April
France - Union of South Africa 25 April
France - United Kingdom 28 April
France - United States 24 April
India - Lebanon-Syria (subject to revision) 1 May
India - New Zealand 16 May
India - Norway 14 May Press Release No.71
Page 5.
India - Union of South Africa
India - United Kingdom 30 April
India - United States 28 April
Lebanon-Syria - New Zealand
Lebanon-Syria - Norway
Lebanon-Syria - Union of South Africa
Lebanon-Syria - United Kingdom 7 May
Lebanon-Syria - United States 2 May
New Zealand - Norway .9 May
New Zealand- Union of South Africa 5 May
New Zealand - United Kingdom
New Zealand - United States 30 April
Norway - Union of South Africa 6 May
Norway - United Kingdom 3 May
Norway - United States 2 May
Union of South Africa -United K domO 6 a
_ _ _ _ _ _ _ _ _ 16 M a y
Union of South Africa - United States 28 April
United Kingdom - United States 23 April |
GATT Library | rf829cm5981 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, October 22, 1947 | United Nations. Economic and Social Council | 22/10/1947 | official documents | E/PC/T/TRF/153, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/rf829cm5981 | rf829cm5981_90260172.xml | GATT_154 | 120 | 804 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
SECRET
E/PC/T/TRF/153
22 October, 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Tariff Negotiations
No meetings have been fixed for Thursday, 23 October 1947
Note: The Secretariat has been informed that the following
meeting was held on Saturday, 18 October:
India - United States
9th meeting
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE DE LA
CONFERENCE DU COMMERCE ET DE L'EMPLOI DE
L'ORGANISATlON DES NATIONS UNIES
Négociations Tarifaires
Aucune réunion n'a été prevue pour le jeudi, 23 octobre 1947.
Note: Le Secrétariat a été avisé que la séance suivante
a eu lieu le samedi, 18 octobre:
Inde - Etat-Unis
NATIONS UNlES
9ème réunion |
GATT Library | rm245rx4052 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, September 9, 1947 | United Nations. Economic and Social Council | 09/09/1947 | official documents | E/PC/T/TRF/116, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/rm245rx4052 | rm245rx4052_90260135.xml | GATT_154 | 246 | 1,646 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE,
ET SOCIAL
SECRET
E/PC/T/TRF/116
9 September 1947
SSION OF TTiB P PARATOY?Y COMkITTNII OF THTI?
SECOND SESSION OF THE PREPARATO"Y C0M-ITTEE OF THE
UNITED NATIONS CONFERENCE ON TRPDE AND EMPLOYMENT
Tariff Negotiations
The following meetings have been arranged for Wednesday,
10 September:
Negotiating Countries
Benelux - France
Benelux - India
Cuba - United States
Benelux - Czechoslovakia
Number of
MMetini.:
48th
5th
44th
7th
Time
10.30
11.00
3.00
4.oo
Room
Number
Stenodactyl 3
400
Salle de
Comite L-4
40o
NT0E: In addition to the meetings listed in E/PC/T/TRF/115 the
Secretariat has been notified that the following additional
meetings were held on Tuesday, 9 September:
Brazil - Czechoslovakia
Benelux - United States
Benelux - Norway
RELUXEi SESSION DE L7 CO!iiS6I01 PREPA-ATOIHL DE
LA C0NI-.ElCE DU COikERt3 ET DE L EiLO1 DB
1 ORGAirIbTIOl DES NATIONS UNIES.
Nzgociations tariifires
Tes seénces suivantes sont prdvues pour la journce du
mlrcredi 10 seotemore:
Pays nedociateurs
N, do I,
sdance -
Benelux - France 48 me
/ Benelux - Inde 5&me
Cuba - tats-Unis d'*eA-. 4&mb
rique
Benelux - Tch6coslovaouie 7tme
H1ure
10. 30
11 h.
15 h.
16 h.
1i.o do
salle
StUnoac l '3
400
Salle de Co-
dit-6 L-4
400
NOTE: Outre les stances dont la liste figure au document
E/PC/T/TéF/115, io Secretariat a Ctd avise cue les stances
muppl6mentapres suivantes ont 6t6 tenues le xardi ': seotembre:
Br6sil - Tchdcoslovaouie
Benelux - Etats-Unis d'd^irique
Benelux - Norvege
NATIONS UNlES |
GATT Library | rm377cf0913 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, October 23, 1947 | United Nations. Economic and Social Council | 23/10/1947 | official documents | E/PC/T/TRF/154, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/rm377cf0913 | rm377cf0913_90260173.xml | GATT_154 | 78 | 555 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNlES
SECRET
CONSEIL E/PC/T/TRF/154
ECONOMIQUE 23 October 1947
ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Tariff Negotiations
No meetings have been fixed for Friday, 24 October 1947.
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE DE LA
CONFERENCE DU COMMERCE ET DE L'EMPLOI DE
L'ORGANISATION DES NATIONS UNIES -
N goniatiris Taiifaires
Auéune reunioé é'a éte pr&vue pour le vendredi, 24 octo4re 1917. |
GATT Library | my159gt6795 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, October 6, 1947 | United Nations. Economic and Social Council | 06/10/1947 | official documents | E/PC/TRF/139, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/my159gt6795 | my159gt6795_90260158.xml | GATT_154 | 279 | 1,897 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
SECRET
ECONOMIQUE E/PC/TRF/139
ET SOCIAL 6 October 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Tariff Negotiations
The following meetings have been arranged for Tuesday, 7th
October:
Negotiating Countries
France - United Kingdom
(Palestine)
Australia - China
Australia - Benelux
Czechoslovakia - Beralux
Australia - France
Number of
Meeting
3rd
9th
6th
11th
14th
Time
10.30
2.30
3.00
3.30
4.00
Room Number
18
402B
435
400
402A
Note: The Secretariat has been advised that in addition to the
meetings listed in E/PC/T/TRF/137, the following additional
meetings were held on Saturday, October 4 and Monday,
October 6:
United States - France
United States - France
United States - Canada
United Kingdom - Brazil
Czechoslovakia - France
38th meeting
39th m. "
44th "
7th "
23rd "
DEUXIEME SESSION DE LA COMMISSION PREPARTOIRE
DE LA CONFERENCE DU COMMERCE ET DE L'RMPLOI DE
L'ORGANISATIONS DES NATIONS UNIES
Négociations Tarifaires
Les seances suivantes ont été prévues pour le mardi 7 octobre:
Pays Participant
aux négociations
Numéro de
la réunion
France - Reyaume Uni
(Palestine) 3ème
Australie - Chine 9ème
Australie - Benelux 6ème
Tchécoslovaquie - Benelux 11ème
Australie - France 14ème
Heure
10.30
14.30
15.30
15.30
16. 00
Numéro de
la salle
18
402B
435
400
402A
Note: En plus des séances dont la liste figure au document
E/PC/T/TRF/137, le Secrétariat a été avisé que les
seances supplémentaires suivantes ont eu lieu le samedi,
4 octobre et lundi, 6 octobre:
Etats-Unis - France
Etats-Unis - France
Etats-Unis - Canada
Royaume-Uni - Brésil
Tchécoslovaquie - France
38ème réunion
39ème réunion
44ème "
7ème "
23ème "
NATIONS UNIES |
GATT Library | nf354kn3784 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, October 7, 1947 | United Nations. Economic and Social Council | 07/10/1947 | official documents | E/PC/T/TRF/140, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/nf354kn3784 | nf354kn3784_90260159.xml | GATT_154 | 176 | 1,209 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
SECRET
E/PC/T/TRF/140
7 October 1947.
SESCOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
Tariff Negotiations
The following meeting has been arranged for Wednesday,
8th October:
Negotiating Countries
Australia - United
Kingdom
Number of
Meeting
2nd
Time
11.00
Room Number
435
Note: The Secretariat has been advised that in addition to
the meetings listed in E/PC/T/TRF/139, the following
additional meeting was held on Tuesday, 7th October:
Australia - United kingdom
1st meeting
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L'EMPLOI DE
L'ORGANISATION DES NATIONS UNIES
Négociations Tarifaires
La seance suivante a été prévue pour le mereredi 8 octobre:
Pays Participant
aux négociations
Australie - Royaume Uni
Numéro de
la réunion
2ème
Heure
11.00
Numéro de
la salle
435
Note: En plus des seances dont la listed figure au document
E/PC/T/TRF/139, le Sécrétariat a été avisé que la séance
supplémentaire suivante a eu lieu le mardi, 7 octobre.
Australie - Royaume-Uni
NATIONS UNIES
Iére réunion |
GATT Library | ng096zs8551 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, October 11, 1947 | United Nations. Economic and Social Council | 11/10/1947 | official documents | E/PC/T/TRF/144, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/ng096zs8551 | ng096zs8551_90260163.xml | GATT_154 | 121 | 829 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
SLCRET
E/PC/T/TRF/144
11 October 1947
SECOND SESSION
UNITED NATIONS
OF THE PREPARATORY COMMITTEE OF THE
CONFERENCE ON TRADE AND EMPLOYMENT.
Tariff Negotiations
No meetings have been fixed for Monday, 13th October 1947
Note: The Secretariat has been advised that the following
additional meeting took place on Saturday 11
October:
Canada - France 12th meeting
DEUXEME SESSION DE LA COMMISSION PREPARATOIRE
DE L.A CONFERENCE DU COMMERCE ET DE L'EMPLOI DE
L'ORGANISATONI DES NATIONS UNIES
Négociations Tarifaires
Aucune réunion n'a été prévue pour le lundi, 13 octobre 1947.
Note: Le Secrétariat a été avisé que la séance
supplémentaire suivante a eu lieu le samedi,
11 octobre:
Canada - France 12ème réunion
NATIONS UNIES |
GATT Library | mr186kv5800 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, September 11, 1947 | United Nations. Economic and Social Council | 11/09/1947 | official documents | E/PC/T/TRF/118, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/mr186kv5800 | mr186kv5800_90260137.xml | GATT_154 | 213 | 1,536 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
SECRET
E/PC/T/TRF/118
11 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
Tariff Negotiations
The following meetings have been arranged for Friday, 12 September:
Negotiating Countries
Number of
Meeting
China - Cuba 4th
France - New Zealand 6th
Czechoslovakia - United Kingdom 6th
Cuba - United States 46th
Cuba - United States
47th
Room
Time Number
9.30
10.00
10. 30
400
402B
18
11.00 Salle de
Comite L-4
3.00 Salle de
Comite L-4
NOTE: The Secretariat has not been notified of any other meetings
held on Thursday, 11 September, in addition to those listed
in E/PC/T/TRF/117.
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L'EMPLOI
DE L'ORGANISATION DES NATIONS UNIES.
Négociations tarifaires.
Les séancas suivantos ont été prévues pour le Vendredi 12 Septembre:
Numéro
d'ordre de
China - Cuba
France-Nouvelle-Zélande
Tchécoslovaquie-Royaume-Uni
Cuba--Etats-Unis
Cuba-Etats-Unis
Heure
Salle
la séance -
41me
6eme
6 me
46emo
9.30
10.00
10.30
ll-00
4.00
402 B
1B
solle de
002i1t L 4
15.00 Salle do
Comit6 L-4
N'TEé éLe Sccré6tariat nta 6ro infséanceaucune auto UancG
tenue le jeud'9l1 septembere, en dehors de cells qui
ont 6t6 cnumer6ee dans le dooumant E/PC/T/TRF/117
py!s en negociations
NATIONS VNIES |
GATT Library | kk384pd9686 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, August 29, 1947 | United Nations. Economic and Social Council | 29/08/1947 | official documents | E/PC/T/TRF/107, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/kk384pd9686 | kk384pd9686_90260126.xml | GATT_154 | 200 | 1,404 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
SECRET
ECONOMIQUE E/PC/T/TRF/107
ET SOCIAL 29 August 1947
SECOND SESSION OF THE PREPARATORV COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Tariff Negotiations
The following meeting has been arranged for Saturday, 30 August:
Number of
Meeting
Negotiating Countries
Czechoslovakia - United States
25th
Room
Time Number
10.00 Salle de
Comite
L-4
NOTE: In addition to the meetings listed in E/PC/T/TRF/106,
the Secretariat has been notified that the following
additional meetings were held on Friday, 29 August
Benelux - Lebanon/Syria
United States - Lebanon/Syria
United States - United Kingdom
United States - China (2 meetings)
DEUXIEME SESSION DE LA. COMMISSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L'EMPLOI
DE L'ORGANISATION DES NATIONS UNIES
Négociations tarifaires
La séance suivante aura lieu le samedi 30 août :
Pays participant aux
négociations
Tchécoslcvaquie - Etats-Unis
No d'ordre
de la séance Heure
25ème
No de la
salle
10.00 Salle de
Comité
L-4
NOTE: En plus des seances indiquées dans le document
E/PC/T/TRF/106 le Secrétariat a été informé que les
séances supplémentaires suivantes ont eu lieu le vendredi,
29 août
Benelux - Liban/Syrie
Etats-Unis - Liban/Syrie
Etats-Unis - Royaume-Uni
Etats-Unis - Chine (2 séances)
NATIONS UNlES |
GATT Library | hv478cq6430 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, September 13, 1947 | United Nations. Economic and Social Council | 13/09/1947 | official documents | E/PC/T/TRF/120, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/hv478cq6430 | hv478cq6430_90260139.xml | GATT_154 | 156 | 1,082 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
E/PC/T/TRF/120
13 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
Tariff Negotiations
The following meetings have been arranged for Monday, 15 September:
Negotiating: Countries
Australia - Czechoslovakia
Benelux - Czechoslovakia
Number of
Meeting
5th
7th
Room
Time Number
3.15
4. 00
435
402B
Note: The following meeting has been arranged for Sunday,
14 September:
Cuba - United States
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L'EMPLOI
DE L'ORGANISATION DES NATIONS UNIES
Négociations tarifaires
Les séances suivantes ont été prévues pour le lundi 15 septembre :
Pays prenant part
aux négociations
Numéro d'ordre
de la séance
Heure Salle
Numéro
Australie - Tchécoslovaquie
Benelux - Tchécoslovaquie
5ème
7 ème
15.15
16.00
Note : La séance suivante a été prevue pour le dimanche
14 septembre :
Cuba - Etats-Unis
435
402B
NATIONS UNIES
SECRET |
GATT Library | jd429kj5838 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, October 18, 1947 | United Nations. Economic and Social Council | 18/10/1947 | official documents | E/PC/T/TRF/150, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/jd429kj5838 | jd429kj5838_90260169.xml | GATT_154 | 124 | 825 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
COINSEIL
ECONOMIQUE
ET SOCIAL
SECRET
E/PC/T/TRF/150
18 October 1947.
SECOND SECTION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Tariff Negotiations
No meetings have beer. fixed for Monday, 20 October 1947.
Note : The Secretariat has been informeu that the
following meeting was held on Friday, 17 October:
France - United States
49th meeting
DEUXIEME SESCION DE LA COMMISSION PREPARATOIRE DE LA
CONFERENCE DU COMMERCE ET DE L'EMPLOI DE
L'ORNGANISATION DES :n's flT ci: Ta UNIES
Négociations Tarifaires
ducune réunion n'a élé prévue pour le lundi, 20 octobre.
Note : Le Secretariat a été avisé aue la séance suivante
a eu lieu le vendredi, 17 octobre:
France - Etats-Unis
49ème réunion
NATIONS UNIES |
GATT Library | gd770qx8497 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, August 14, 1947 | United Nations. Economic and Social Council | 14/08/1947 | official documents | E/PC/T/TRF/94, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/gd770qx8497 | gd770qx8497_90260113.xml | GATT_154 | 186 | 1,234 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
SECRET
ECONOMIQUE
E/PC/T/TRF/94
ET SOCIAL 14 August 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Tariff Negotiations
The following meetings have been arranged for Friday, 15 August:
Negotiating Countries
Australia - South Africa
Brazil - China
Czechoslovakia - France
Australia - Chile
Benelux - United Kingdom
Brazil - France
Chile - China
Number of
Meeting
4th
3rd
16th
3rd
25th
4th
2nd
Time
9.30
10.00
10.00
10.30
3.00
3.00
5.00
Room
Number
402A
436
402C
435
18
436
402B
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L'EMPLOI
DE L'ORGANISATION DES NATIONS UNIES
Négociations Tarifaires
Les réunions suivantes ont été prévues pour le vendredi 15 août:
Pays participant
aux négociations
Australie - Afrique du Sud
Brésil - Chine
Tchécoslovaquie - France
Australie - Chili
Benelux - Royaume-Uni
Brésil - France
Chili - Chine
Numéro de
la réunion Heure
4ème
3 ème
16ème
3ème
25ème
4ème
2ème
9.30
10.00
10.00
10.30
15.00
15.00
17.00
Numéro de
la salle
402A
436
402C
435
18
436
402B
NATIONS UNIES |
GATT Library | hm944hn3563 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, September 5, 1947 | United Nations. Economic and Social Council | 05/09/1947 | official documents | E/PC/T/TRF/113, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/hm944hn3563 | hm944hn3563_90260132.xml | GATT_154 | 233 | 1,588 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
SECRET
E/PC/T/TRF/113
5 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Tariff Negotiations
The following meetings have been arranged for Saturday, 6 September:
Negotiating Countries
Australia - Lebanon/Syria
Benelux - France
Canada - Cuba
China - United Kingdom
Australia - Newfoundland
Number of
Meeting
1st
45th
4th
9th
1st
Time
10.30
10.30
10.30
10.55
11.30
Room
Number
435
Stenodactyl 3
400
402B
435
NOTE: In addition to the meetings listed in E/PC/T/TRF/112 the
Secretariat has been notified that the following
additional meetings were held on Friday, 5 September:
Cuba - United States
France - United States (2 meetings)
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L'EMPLOI
DE L'ORGANISATION DES NATIONS UNIES
Négociations tarifaires
Les réunions suivantes ont été prévues pour le samedi, 6 septembre:
Pays participant
aux négociations
Australie - Liban/Syrie
Benelux - France
Canada - Cuba
Chine - Royaume-Uni
Australie - Terreneuve
Numéro de Numéro de
la réunion Heure la salle
lère
45 ème
4ème
9 ème
lère
10.30
10.30
10.30
10.55
11. 30
435
Sténodactyl 3
400
402B
435
NOTE: En plus des séances indiquées dans le document
E/PC/T/TRF/112 le Secrétariat a été informé que les
séances supplémentaires suivantes ont eu lieu le
vendredi, 5 septembre:
Cuba - Etats-Unis
France - Etats-Unis (2 séances)
NATlONS UNIES |
GATT Library | cn258vt9478 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, August 28, 1947 | United Nations. Economic and Social Council | 28/08/1947 | official documents | E/PC/T/TRF/106, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/cn258vt9478 | cn258vt9478_90260125.xml | GATT_154 | 304 | 2,020 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
SECRET
E/PC,/T/TRF/106
28 August 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Tariff Negotiations
The following Meetings have been arranged for Friday, 29 August:
Negotiating Countries
Australia - United States
Benelux - United States
Benelux - France
Brazil - China
Chile - India
Benelux - France
Cuba - India
Czechoslovakia - United States
Cuba - United States
France - Lebanon/Syria
Number of
Meeting
3rd
27th
40th
5th
5th
41st
4th
24th
34th
5th
Room
Time Number
9.30 435
9.30 Salle de Comite
L-4
10.15 Stenodactyl 3
10.30 436
11.30 400
3.00 Stenodactyl 3
3.00 400
3.30 Salle de Comite
L-4
4.00 402B
4.00 402C
NOTE: In addition to the meetings listed in E/PC/T/TRF/105, the
Secretariat has been notified that the following additional
meetings were held on Thursday, August 28th:
United States - Lebanon/Syriu
Benelux - Chile
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L'EMPLOI
DE L'ORGANISATION DES NATIONS UNIES
Négociations tarifaires
Les seances suivantes auront lieu le vendredi 29 août:
Pays participant aux
négotiations
Australie - Etats-Unis
Benelux - Etats-Unis
No d'ordre
de la séance
3ème .
27ème
Benelux - France
Brésil - Chine -
Chili - Inde
Benelux - France
Cuba - Inde.
Etats-Unis - Tchécoslovaquie
Cuba - Etats-Unis
France - Liban/Syrie
40ème
5ème
5ème
41ème
4ème
24ème
34ème
5 ème
No de la
Heure salle
9.30 435
9.30 Salle de Comité
L-4
10.15 Sténodactyl 3
10.30 436
11.30 400
15.00 Sténodactyl 3
15.00 400
15.30 Salle de Comité
16.00
16.00
L-4
402B
402C
NOTE: En plus des séances indiquées dans le document E/PC/T/TRF/10,
le Secretariat a été informé que les séances supplémentaires
suivantes ont eu lieu le jeudi 28 août:
Etats-Unis - Liban/Syrie
Benelux - Chili
NATIONS UNIES |
GATT Library | sw653yb1856 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, October 1, 1947 | United Nations. Economic and Social Council | 01/10/1947 | official documents | E/PC/T/TRF/135, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/sw653yb1856 | sw653yb1856_90260154.xml | GATT_154 | 217 | 1,476 | UNITED NATIONS A
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQU E
ET SOCIAL
E/PC/T/TRF/135
14October, 1917.
SECOND HESESSIARAOF T POMM.'AEORY C01'ITT7E OF THE
UNITED NAEIONS CONFER NCE ON TRADE AND EMPLOYMENT
Tariff Negotiations
The following meetings have been arranged for Thursday,
2nd O:tober, 1947;
Negotiating Countries
Czechoslovakia - France
Canada - United States
Canada - United States
Australia - China
Number of
?eeting
22nd
37th
38th
8th
Time Room Number
10.00
10.00
3.00
3.00
400
4023
402B
135
Note: The Secretariat has been informed that in addition to
the meetings listed in E/PC/T/TRF/131, the following
additional meeting was eeld on Wednosday, 1st October;
Canada - United States
36th meeting.
PEUXIEME AESSMONSDE Lk COAMI3SION PREPARATOIRE
DE LA CONFMMENCE DU CO1IERME ET DE L'ELPLOI
DE L'ORGANISATION DES NATIONS UNIES
N6gociations tarifaires
Les s6ancaes suévénteé ont 6t6 pr6vues pour le jeudi 2 octobre 1947:
Pays participant
aux n6gociations
Tch6coslovaquie - France
Canada - Etats-Unis
Canada - Etats-Unis
Australie - Chine
Numero de
la reunion
22bme
37Tme
38 me
8eme
Note: én plus de s6ances dont la liste figure au document E/PC/T/TRF/
é34, le Seérétariaé a 6te avés6 que la éeance suppl6mentaire
suivante a eu lieu le mercredi 1 octobre:
Canada - Etèts-Uéis 366me reunion.
Heure
iL.CO
10.00
15 .00
15.00
Numero de
la salle
400
402B
402B
435
NATIONS UNIES
SECRET |
GATT Library | sw918tb1732 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, September 1, 1947 | United Nations. Economic and Social Council | 01/09/1947 | official documents | E/PC/T/TRF/109, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/sw918tb1732 | sw918tb1732_90260128.xml | GATT_154 | 272 | 1,935 | UNITED NATIONS tl';'NS
LCONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
SECRET
CONSEIL
ECONOMPIQUE E/C/T/TRF/109
ET SOCIAL 1st September 1947
ESSION OF T? P?ZBPARATORY COIv?ITT2R OF THE
SECOND SE3510N, OF TIU PREP.R.T0RY COM,4TT>E OF THE
UNITED N-TIONS CONFERENCE ON TR.DE khD RIPLOWIENT.
Tariff Negotiations
The following meetings have been arranged for Tuesday, 2 September:
Negotiating Countries
Number of
Meeting
Room
Time Number
Australia - United States
Benelux - United States
Benelux - France
Burma - China
Brazil - United States
Brazil - France
5th
28th
43rd
4th
8th
6th
9.30
9.30
10.30
10.30
11.00
300
435
Salle de Comite
L-4
Stenodactyl 3
402B
402A
400
NOTE 1n addition to the moetinUs listed in E/PC/T/TRF/l08
the Secretariat has been notified that the following
additional meetings were held on Monday, ist September:
Benelux - France
Chile - United Kingdom
China - United States
France - United States
India - Lebanon/Syria
DEUXIHME SESSION DE LL CO!9yiISV_,FNRPARATOIPR
DE LA COUY7ERZNC DU COETz!CR ET B 'EMPLOI
DE L'01GAIS.-.T1OQ DES 1 IITIO.UJIES
N6gociations tarifaires
Les s6ances suivantes auront lieu le mardi 2 septembre
Fays participant aux
negocietions
australie - Etats-Unis
Benelux - Etats-Unis
No d'ordre
de la se6nce
5eme
28 me
No de la
Heure salle
9,30 435
9,30 Salle de Comite
L,- 4
Benelux- France 43eme 10.30 Stenodactyl 3
Birmanie - Chine 4eme 10.30 402B
Br6sil -tats-Unis 86me 11.00 402A
Bresil - France 66me 15 00 400
NOTE: En plus dRF s108ces indiquees dans le document E/PC/T/TEtF/lOS
le Sécretariat a ete informe que les seances suppl6muntaires
suivantes ont eu lieu le lundi ler seytembre:
Benelux - France
Chili - Royaurne-Uni
Chine - Etats-Unis
France - Etats-Unis
Inde -. Liban/Syrie |
GATT Library | ss816pf9749 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, September 24, 1947 | United Nations. Economic and Social Council | 24/09/1947 | official documents | E/PC/T/TRF/129, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/ss816pf9749 | ss816pf9749_90260148.xml | GATT_154 | 215 | 1,429 | UNlTED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
SECRET
E/PC/T/TRF/129
24 September 1947
SECOND SESSICN OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Tariff Negotiations
The following meeting has been arranged for Thursday,
25 September 1947:
Negotiating Countries
China - India
Number of
Meeting
5th
Time
3.30
Room Number
400
Note: The Secretariat has been informed. that in addition to
the meetings listed in E/PC/T/TRF 127 and 128, the
following additional meetings were held on Tuesday and
Wednesday, 23 and 24 September:
United Kingdom - Benelux 35th meeting
United States - Benelux 36th "
New Zealand - Benelux 5th "
Benelux Ceylon 3rd "
DEUXIEME SESSION DE LA. COMMISSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L'EMPLOI
- DE L'ORGANISATION DES NATIONS UNIES
Négotiations Tarifaires
La seance suivante a été prevue pour le jeudi,
25 Septembre 1947:
Pays participant
aux négociations
Chine - Inde
Numéro de
la réunion
5 ème
Numéro de
Heure la salle
15.30
400
Note: Outre les réunions énumérées dans les documents
E/PC/T/TRF 127 and 128, le Secrétariat a été avisé
que le mardi at mercredi, 23 et 24 Septembre:
Royaume-Uni - Benelux 35ème réunion
Etats-Unis - Benelux 36ème "
Nouvelle Zélande -
Bénelux. - Cey
Benelux 5ème
lan 3 ème
"
NATIONS UNIES |
GATT Library | vw085wb4571 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations | United Nations Economic and Social Council, August 20, 1947 | United Nations. Economic and Social Council | 20/08/1947 | official documents | E/PC/T/TRF/99, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/vw085wb4571 | vw085wb4571_90260118.xml | GATT_154 | 137 | 1,001 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
SECRET
EPC/T/TRF/99
20 August 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Tariff Negotiations
The following meetings have been arranged for Thursday, 21 August:
Negotiating Countries
Benelux- Norway
Benelux-France
Australia - France
Brazil-India
Number of
Meeting
6th
35th
13 th
2nd
Time
10.30
10.30
11.00
3. 00
Room
Number
402B
Stenodactyl 3
435
400
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L'EMPLOI
DE L'ORGANISATION DES NATIONS UNIES
Négociations Tarifaires
Les réunions suivantes ont été prévues pour le jeudi 20 août:
Pays participant
aux négociations
Benelux-Norvège
Benelux-France
Australie-France
Brésil-Inde
Numéro de
la réunion
6ème
35ème
13ème
2ème
Numéro de
Heure la salle
10.30 402B
10.30 Sténodactyl 3
11. 00
435
15.00 400
NATIONS UNIES |
GATT Library | kt721hw0126 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations No meetings have been fixed for Saturday, 25 October 1947 | United Nations Economic and Social Council, October 24, 1947 | United Nations. Economic and Social Council | 24/10/1947 | official documents | E/PC/T/TRF/155, E/PC/T/TRF/90-155, and E/PC/T/S/1-3 | https://exhibits.stanford.edu/gatt/catalog/kt721hw0126 | kt721hw0126_90260174.xml | GATT_154 | 77 | 553 | UNITED NATIONS
SECRET
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
E/PC/T/TRF/155
24 October 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
Tariff Negotiations
No meetings have been fixed for Saturday, 25 October 1947.
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE DE LA
CONFERENCE DU COMMERCE ET DE L'EMPLOI DE
L'ORGANISATION DES NATIONS UNIES.
Négociations Tarifaires
Aucune réunion n'a été prévue pour le samedi, 25 octobre 1947.
NATIONS UNIES E/PC/T/S/1-12 |
GATT Library | rg823sh1978 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations. Note to Delegutions by the Tariff Negotiations Working Party | United Nations Economic and Social Council, July 12, 1947 | United Nations. Economic and Social Council | 12/07/1947 | official documents | E/PC/T/126 and E/PC/T/124-135 | https://exhibits.stanford.edu/gatt/catalog/rg823sh1978 | rg823sh1978_92290152.xml | GATT_154 | 301 | 2,045 | E/PC/T/126
ECONOMIC CONSEIL 12 July 1947
AND ECONOMIQUE
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
TARIFF NEGOTIATIONS
Note to Delegutions by the Tariff Negotiations Working Party.
It has been brought to the notice of the Workïng Party, in
connection with the issue by Delegations of revised lists of the
concessions offered to other countries with whom they have
entered into negotiation, that the examination and use of these
lists, especially by countries other than those to whom the
offers were originally made, would be greatly facilitated if the
existing tariff rates were given for each item in addition to
the concessions offered.
Not all delegations have followed this practice, and the
Working Party wishes tn recommend that in all future lists
issued by Delegations the existing tariff rates should appear.
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L'EMPLOI
DE L'ORGANISATION DES NATIONS UNIES.
NEGOCIATIONS TARIFAIRES
Note adressée aux délégations par le Groupe de travail
charge des négociations tarifaires.
L'attention du Groupe de travail a été attirée, à propos de
la publication par les délégations du listes révisées des
concessions offertes aux autres pays avec lesquels ils ont
entamé des négociations, sur le fait que l'examen et l'utilisation
de ces listed, notamment par les pays autres que ceux auxquels
les offres ont été initialement présentées, seraient grundement
facilitiés si les taux de drofts de douane actuellement en vigueur
étaient indiqués pour chaque article en même temps que les
concessions offerces.
Toutes les délégations ne se sont pas conformées à cet
usage, et le Groupe de travail tient à recommander qu'à l'avenir
toutes les listes publiées par les délégations comportent la
mention des taux de droits de douane en vigueur.
RESTRICTED
UNITED NATIONS
NATIONS UNIES |
GATT Library | bz766my8097 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations Working Party | United Nations Economic and Social Council, October 2, 1947 | United Nations. Economic and Social Council | 02/10/1947 | official documents | E/PC/T/223 and E/PC/T/214/ADD.1/REV.1-228 | https://exhibits.stanford.edu/gatt/catalog/bz766my8097 | bz766my8097_92290287.xml | GATT_154 | 146 | 1,085 | RESTRICTESD
ECONOMIC CONSEIL E/PC/T/223
AND ECONOMIQUE 2 October 1947
SOCIAL COUNCIL ET SOClAL ORIGINAL: ENGLISH
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Tariff Negotiations working Party
The brazilian Government has authorized the Head of the
Brazillian Delegation. His Excellency Antonio de Vilhena
Ferreira-.Braga, to accept and sign the Protocol of Provisional
Application of the General Agreement on Tariffs and Trade.
The Working Party has considered this question at its
meeting on October 1 and recommends that the name of Brazil
be added to the list of countries which intend to give pro-
visional application to the Agreement.
Should no comment to the contrary have bean received from
Delegations by Saturday, October 4, at noon, it will be under-
stood that Brazil will become one of the countries mentioned
in the Protocol of Provisional Application.
.NATIONS UNIES
UNITED NATIONS |
GATT Library | ty650rx9244 | Second session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations Working Party | United Nations Economic and Social Council, September 4, 1947 | United Nations. Economic and Social Council | 04/09/1947 | official documents | E/PC/T/W/320 and E/PC/T/W/307-344 | https://exhibits.stanford.edu/gatt/catalog/ty650rx9244 | ty650rx9244_90050474.xml | GATT_154 | 521 | 3,532 | UNITED NATIONS NATIONS UNIES
RESTRICTED
ECONOMlC CONSEIL E/PC/T/W/320
AND ECONOMIQUE 4 September 1947
SOCIAL COUNCIL ET SOCIAL ORIGINAL : ENGLISH
SECOND SESSION OF THE PREPARATOR COMMMITTE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
TARIFF NEGOTTATIONS WORKING PARTY
When considering document E/PC/T/S/8 at its meeting on
September 3, the Tariff Agreement Committee referred to the
Tariff Negotiations Working Party the question of what would
be the best way of meetin the situation of those Delegtions
which will soon be terminating their tariff negotiations and
which are desirous of leaving Geneva on the completion of
their work.
The Delegate of South Africa suggested that the text of
the General Agreement exceptingg the Schedules) should be
prepared for signature immediatel it is agreed, so that when
a Delegation finishes all its tariff negotiations it should
authenticate the text of the Agreement and initial the Schedules
with each country concerned and hand the to the Secretariat.
In this manner, no delay would, be entailed for Delegations
which have finished or are about to finish their negotiations.
This proposal was supported by the Delegation of Chile. The
Tariff Negotiations Working Party has considered these proposals
and wishes to subnit the following comments.
1. Schedules to be attached to the General Agreement will
consist of one consolidated Schedule per country; in other words,
it will not be a question of each Delegation lodging one list in
respect of each of its bilateral negotiations. Consequently, on
finishing negotiations, each Delegation must establish one
consolidated list incorporating all concessions. E/PC/T/W/320
page 2.
2. Due to the multilateral character of the negotiations
and to the fact that Delegations will, therefore, expect to
receive a number of indirect concessions arising from negotia-
tions between other pairs of countries, it does not appear as
if any Delegation would wish to put its signature to the Final
Act covering the general provisions and all Schedules, in
advance of other Delegations.
3. It would appear as if Delgations which have finished
or are about to finish their negotiations, and whose principal
Delegates wish to return home, could:
(a) Assure their representation in the committee work
now taking place for the establishment of the text
of the General Agreement and form of the Schedules.
(b) Prepare their consolidated Schedule in the form
established under (a), incorporation all tariff
concessions granted.
(c) Leave whatever technically qualified experts are
necessary to clear up any doubtful points in
respect of their own Schedule and its translation
and to check the Schedules of other countries to
ascertain that all negotiated benefits are
incorporated therein.
(d) Make provision for a duly qualified representative
(who could, if desared, be a diplomatic representa-
tive accredited in a nearby capital) to sign the
General Agreement in due course.
4. The Tariff Negotiations Working Party is keeping in
close touch with the progress of the remaining negotiations and
will suggest to the Delegations concerned all practical measures
necessary to expendite negotiations.
The Working Party will indicate to all Delegations as soon
as it is in a position to do so, the data on which all the
negotiations are likely to be terminated. |
GATT Library | hv901hj2143 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations Working Party. Communïcation of information concerning changes in lists of tariff concessions | United Nations Economic and Social Council, October 3, 1947 | United Nations. Economic and Social Council | 03/10/1947 | official documents | E/PC/T/225 and E/PC/T/214/ADD.1/REV.1-228 | https://exhibits.stanford.edu/gatt/catalog/hv901hj2143 | hv901hj2143_92290289.xml | GATT_154 | 200 | 1,528 | RESTRICTED
ECONOMIC CONSEIL E/PC/T/225
AND ECONOMIQUE 3 October 1947.
SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
TARIFF NEGOTIATIONS WORKING PARTY
Communïcation of information concerning
changes in lists of tariff concessions
In Document E/PC/T/82 of May 30th, 1947 (formerly issued
as E/PC/T/143), a procedure was established for the fortnightly
submission by delegations of lists of the changes made in
concessions offered to all other delegations with which tariff
negotiations were in progresss.
The Tariff Negotiations Working Party has reviewed this
arrangement and, considering the advanced stage of the negot-
iations and the fact that delegations are now distributing lists
in respect of bilateral negotiations completed and, in some
cases, consolidated lists, has come to the conclusion that the
maintenance of the system is no longer necessary, Accordingly
the Tariff Negotiations Working Party proposes that the procedure
established by document E/PC/T,/82 should be discontinued forthwith.
With the disconti-uance of this procedure, it becomes all
the more necessary that delegations communicate promptly to the
other delegations with which they are negotiating their final
lists on bilateral negotiations and, as soon as possible, their
consolidated lists.
UNITED NATIONS
NATIONS UNlES |
GATT Library | rs873vj7318 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations Working Party. Effects of the General Agreement on Tariffs and Trade | United Nations Economic and Social Council, June 3, 1947 | United Nations. Economic and Social Council | 03/06/1947 | official documents | E/PC/T/85 and E/PC/T/66-91 | https://exhibits.stanford.edu/gatt/catalog/rs873vj7318 | rs873vj7318_92290101.xml | GATT_154 | 0 | 0 | |
GATT Library | qb194fw9083 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations Working Party. Effects of the General Agreement on Tariffs and Trade | United Nations Economic and Social Council, June 3, 1947 | United Nations. Economic and Social Council | 03/06/1947 | official documents | E/PC/T/85 and E/PC/T/66-91 | https://exhibits.stanford.edu/gatt/catalog/qb194fw9083 | qb194fw9083_92290101.xml | GATT_154 | 906 | 5,904 | UNITED NATIONS UNIES
ECONOMIC CONSEIL E/PC/T/85
AND ECONOMIQUE 3 June 1947
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
TRIFF NEGOTIATIONS WORKING PARTY
Effects of the General Agreement on Tariffs and Trade
on Pre-existing Bilateral Treaties.
The Cuban Delegation, in paper E/PC/T/W 29, of May 7, put
forward for consideration certain questions regarding the affects
of the General Agreement on Tariffs and Trade on existing bi-
lateral treaties. It was decided by the Preparatory Committee
meeting in Executive Session that the Secretariat, in consulta-
tion with the Cuba. Delegation and with the Tariff Negotiations
Working Party, should prepare a paper on the points that had
been raised.
The issues raised by the Cuban Delegation were - in short -
the following:
1. In case of any inconsistency between the terns of
the General Agreement and any commitment previously
entered into by a contracting party, do the provi-
sions of the General Agreement prevail?
2. Do products not included in the schedule annexed to
the General Agreement which are subject to regula-
tion by existing bilateral treaties or agreements,
r- in their former status? '
3. Are general and specific preferences contained in
existing bilateral treaties to be maintained as
such, in so far as they have not been eliminated
or reduced, or replaced by preferences explicitly
provided for in the schedules annexed to the
General Agreement?
4. Should the reply to question 3 above be in the
affirmative, do the provisions of paragraph 1
- of Article I of the General Agreement, require the
granting to other contracting parties of any
preferential treatment maintained?
In addition, the Cuban Delegation has since asked for
clarification of a fifth point:
5. Does the General Agreement prevent the contracting
parties from entering into commercial treaties or
agreements among themselves or with other countries,
provided such treaties or agreements are not in-
consistent with the purpose of the General Agreement?
NATIONS UNI ES
RESTRICTED E/PC/T/85
page 2
Clarification of the above issue can be given as follows, on
the.basis of the present texts of the Draft Charter and General
"Agreement:
In the case of any inconsistency between the General Agreement
_ _ onTariffs and Trade and provides bilateral agreements, signa-
tories to the General Agreement must take such steps as may be
necessary to amend their bilateral agreements to the extent
necessary to remove such inconsistency. ..here no such inconsistency
exists, the General Agreement imposes no obligation with respect
to previous bilateral agreements. The Tariff Negotiations Working
Party feels that - in accordance with the suggestion made by the
Cuban Delegation in the last paragraph of document E/PC/T/W/29 -
a paragraph should be added to Article XXV of the General Agreement
incorporating the general principle that in case of any inconsistency
between the terms of the General Agreement and any commitment
.previously entered into by a contracting party, such contracting
: party must be governed by the terms of the General Agreement. The
precise wording of such a paragraph should - of course - await
the drafting of Article XXV.
2. Products not included in the schedules annexed to the
General Agreement, but which are subject to regulation by existing
bilateral treaties cr agreements, will retain their status
provided that such bilateral treaties remain in force and that,
in the case of preferential treatment, such preferences comply with
-Article I of the General Agreement which will presumably be drafted
along the lines of Article 14 of the Draft Charter.
The extent to which the parties to the General Agreement decide
to-retain or to negotiate commercial agreements among themselves or
with other countries should be left for their determination, so long
as such agreements do not conflict with the General Agreement.
3. General and specific preferences not included in the
schedules annexed to the General Agreement, which are subject to
regulation by bilateral agreements, may retain the same status
provided there is no inconsistency with the terms of the General
Agreement; if there is any inconsistency, they cease to have the
old status (see reply to question 1 above). In particular, the
conditions established in Article I. of the General Agreement
(Article 14 of the Draft Charter) must be complied with and would
preclude any increase in the margin existing on the base date
between the preferential rate and the m.f.n. rate.
4. The provisions of paragraph 1 of Article I of the General
Agreement require the extension to other contracting parties of any
preferential treatment which is not covered by paragraph 2 of the
same Article.
5. The General Agreement does not prevent the contracting
parties from entering into commercial treaties or agreements among
themselves or with other countries, provided such treaties or
*agreements do not contain any provision inconsistent with the
terms.of the General Agreement. E/PC/T/85
page 3
The Cuban Delegation feels that the points raised in
its five questions should be specifically covered in the text
of the General Agreement. The Tariff Negotiations Working
Party is of the opinion that there would be advantage in
incorporating in the General Agreement the principle set
out under No. 1 above.
It would seem that in the course of discussions to take
place on the text of the General Agreement, the Preparatory
Committee will decide what texts, if any, should be added to
the General Agreement as a consequence of its consideration
of the points raised by the Cuban Delegation. |
GATT Library | sf706zm4988 | Second session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations Working Party. Final Act | United Nations Economic and Social Council, September 4, 1947 | United Nations. Economic and Social Council | 04/09/1947 | official documents | E/PC/T/W/319 and E/PC/T/W/307-344 | https://exhibits.stanford.edu/gatt/catalog/sf706zm4988 | sf706zm4988_90050473.xml | GATT_154 | 249 | 1,725 | RESTRICTED
E/PC/T/W/319
NATIONS UNIES ECONOMIC NATIONS UNIES CONSEIL 4 September 1947
AND ECONOMIQUE
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
TARIFF NEGOTIATIONS WORKING PARYT
FINAL ACT
several Delegates have asked for assurances that signature
or application of the General Agreement will not prejudice their
freedom to maintain reservations to the Charter. The Tariff
Negotiations Working Party suggests that these assurances could be
provided by adding the following provisions at the end of the first
paragraph of the Final Act, which will be signed by all countries
at Geneva:
"It is understood that the signature of this Final Act
or the signature or application by any of the above-
mentioned governments of the General Agreement or its
accompanying Protocols does not in any way prejudice their
freedom to maintain at the United Nations Conference on
Trade and Employment the reservations which they may have
made to the provisions of the draft Charter for an Inter-
national Trade Organization recommended by the Preparatory
Committee."
In order to make the purpose of tne Final Act completely
clear, the Tariff Nagotiations Working Party also suggests the
following amendments to the closing phrases of the Final Act (see
Document E/PC/T/W/315 and corrigendum).
"IN [FAITH] WITNESS WHEREOF [,] the respective Representatives
[of the above-mentioned Governments have signed the present
Act and have thereby authenticated the text of the General
Agreement on Tariffs and Trade with accompanying Protocols
annexed hereto.
"DONE, etc."
.
. |
GATT Library | ft756qn6660 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations Working Party. Report on Preferential Arragements Not Effected By the Method of a Difference in Rates of Duty | United Nations Economic and Social Council, August 9, 1947 | United Nations. Economic and Social Council | 09/08/1947 | official documents | E/PC/T/158 and E/PC/T/156-161 | https://exhibits.stanford.edu/gatt/catalog/ft756qn6660 | ft756qn6660_92290197.xml | GATT_154 | 0 | 0 | |
GATT Library | bc231xy6300 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations Working Party. Report on Preferential Arragements Not Effected By the Method of a Difference in Rates of Duty | United Nations Economic and Social Council, August 9, 1947 | United Nations. Economic and Social Council | 09/08/1947 | official documents | E/PC/T/158 and E/PC/T/156-161 | https://exhibits.stanford.edu/gatt/catalog/bc231xy6300 | bc231xy6300_92290197.xml | GATT_155 | 1,071 | 6,948 | RESTRICTED
ECONOMIC CONSEIL E/PC/T/158
AND ECONOMIQUE 9 August 1947
SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
TARIFF NEGOTIATIONS WORKING PARTY
Report on Preferential Arragements Not Effected
By the Method of a Difference in Rates of Duty
The note appearing in Page 12 of the Report of the First
Session (Chapter III, Section C, paragraph 1, sub-paragraphs (a)
and (c) ) dealing with certain preferential arrangements not
effected by the normal method of a difference in rates of duty,
was considered by the Sub-Committee on Articles 25 and 27 which
recommended, subject to the views of the Tariff Negotiations
Working Party, that the note should be maintained in the Report
of the Second Session and that the attention of the Working Party
should be invited to the recommendation contained in that note
to the effect that an appropriate provision should be included
in a protocol to the General Agreement on Tariffs and Trade.
The Working Party has given careful consideration to the
proposal of the Sub-Committee on Articles 25 and 27 and, after
taking into account the facts relating to the matter in question,
(See Annex A, consisting of a statement of the facts, provided
by the United Kingdom Delegation) has come to the conclusion that
it would be preferable for an appropriate provision to be incor-
porated in one of the Articles of Chapter V of the Charter and
also in the General Agreement.
The arrangements in question have both a preferential and a
quantitative restriction aspect, and it is therefore necessary to
take Into account Articles 25, 27 and 28 as well as Article 14
of the Charter. Consequently, it is proposed that the following
text should be added to Article 28, as sub-paragraph (b) of
paragraph 1.
UNITED NATlONS
NATIONS UNIES E/PC/T/158
Page 2
"(c) Restrictions under the preferential arrangements
provided for in Annex A of this Charter, subject to
the conditions set forth therein."
It is further proposed that the note to Annex A to the
Charter (mentioned in Article 14) as now-drafted by the Sub-
Committee on Articles 14, 15 and 24 should be amended as
follows:
"The imposition of a margin of tariff preference
to replace a margin of preference in an internal tax
existing on 10 April, 19477,or to replace the
preferential quantitative arrangements described in the
following paragraph shall not be deemed to constitute
an increase in a margin of tariff preference.
."The preferential arrangements referred to in para-
graph 1(b) of Article 28 are those existing in the
United Kingdom on 10th Apri1, 1947, under contractual
agreements with the Governments of Canada, Australia and
New Zealand, in respect of chilled and frozen beef and
veal. frozen mutton and lamb, chilled and frozen pork.
and bacon /and hams7. It is the intention, without,
prejudice to any action taken under sub-paragrarh (h) of
Part I of Article 37. that these arrangements shall be
eliminated or replaced by tariff preferences. and that
negotiations to this end shall take. place as soon as
practicable among the countries substantially concerned
or involved,"
The Working Party considers that this Report could
best be considered by Commission A when dealing with the Report
of the Sub-Committee on Articles 26, 28 and 29. E/PC/T/158
Page 3
ANNEX A
Note by United Kingdom Delegation.
1. In the Report (a) of the First Session, the Preparatory
Committee recommended that certain existing preferential arrange-
ments which were established under international agreement but
were not effected by the normal method of a difference in rates
of duty and which remained after the current negotiations, should
be dealt with by a provision in a Protocol to the Charter or
to the General Agreement on Tariffs and Trade to the effect that
the Member applying the arrangements shall be entitled to continue
them or equivalent measures pending either (i) an international
commodity agreement or (ii) some other arrangement between the
Members concerned.
2. When the United Kingdom negotiated the Trade Agreements now
in force with the Governrments of Australia and New Zealand in
1932 and with the Government of Canada in 1937, they undertook
to give preferential treatment to imports from the Dominions of
certain meat products, not through the normal method of tariff
preferences but by providing for the Dominions to have an ex-
panding share of imports under United Kingdom arrangements for
the quantitative regulation of imports from foreign sources.
3. In the Agreement (b)with Australia, the United Kingdom
Government declared that their policy in relation to meat product-
ion was, first, to secure development of home production, and,
secondly, to give to the Dominions an expanding share of
imports into the United Kingdom. (c)In pursuance of this
policy, the United Kingdom Government undertook to regulate
imports of foreign frozen mutton and lamb and chilled and frozen
(a) Chapter III, Section C, paragraph 1, sub-paragraphs (a) and
(c).
(b) Ottawa Agreement, 1932, Schedule H.
(c) ibid Article 6. E/PC/T/158
Page 4
beef, while placing no restriction on imports of any meat fi
Australia.
4. In the Agreement (d) with New Zealand, the United King
Government gave a similar undertaking in respect of beef,
mutton and lamb, and undertook in respect of bacon and other
pig products that their future policy of controlling foreign
imports would provide for some extension of Home and Dominion
supplies and would give to New Zealand a reasonable share of
this expansion.
5. In the Agreement (e) with Canada, the United Kingdom
Government undertook that their policy of promoting the orderly
marketing of bacon and hams and of meat in the United Kingdom
would not entail any regulation of imports of bacon and hams
from Canada unless the rate at which the trade from Canada
progressed towards two-and-one-half million hundredweight per
annum should become abnormal; and recognised that special
provision might become necessary for increased shipments of
beef from Canada, and that reductions might be necessary in
shipments of chilled beef from foreign countries.
6. The principle of according an expanding share of the
United Kingdom market to Commonwealth imports was duly followed
in subsequent international agreements, such as the U.K./
Argentine Trade Agreements, 1933 and 1936, which provided for
a reduction of imports of chilled beef from Argentina and to
this extent increased the measure of preference accorded to
imports from Commonwealth countries.
(d) Ottawa Agrcement, 1932, Article 4.
(e) Agreement with Canada, 1937, Article 5. |
GATT Library | jq869dd4825 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations Working Party. Report on the Text of Articles 24 and 67 of the Draft Charter (E/PC/T/136) | United Nations Economic and Social Council, July 29, 1947 | United Nations. Economic and Social Council | 29/07/1947 | official documents | E/PC/T/136 Corr.1 and E/PC/T/135-142 | https://exhibits.stanford.edu/gatt/catalog/jq869dd4825 | jq869dd4825_92290164.xml | GATT_155 | 192 | 1,244 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/133 Corr.1
29 July 1947
ORIGINAL: ENGLISH
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
TARIFF NEGOTIATIONS WORKING PARTY
REPORT ON THE TEXT OF ARTICLES 24 AND 67 OF THE
DRAFT CHARTER
(E/PC/T/136)
The following corrections should be made:
Page 2, Article 24, paragraph 1, line 3:
The word "negotiations" should be in square brackets.
Page 3, paragraph (d), line 3:
The word "Agreement" should be added after the word
that" .
Page 5, Article 67, paragraph 2, line 9:
Sentence should read "paragraph 1 of Article 24 ......."
and not "Article 4".
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L 'EMPLOI
DE L'ORGANISATIO DES NATIONS UNIES
GROUPE DE TRAVAIL CHARGE :DES NEGOCIATIONS TARIFAIRES
RAPPORT
SUR LE TEXTE DES ARTICLES 24 ET 67 DU PROJET DE CHARTE
(E/PC/T/136 )
Il convient d'apporter au document précité la
correction suivante:
Page 5, Article 67. 2ème paragraph 8ème ligne:
Lire "...conformément au paragraphe 1 de l'article 24....n
au lieu de " ...... conformément au paragraphe l de l'article 4...."
NATIONS UNIES |
GATT Library | fm754db3466 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations Working Party. Report on the Text of Arttcles 24 and 67 of the Draft Charter | United Nations Economic and Social Council, July 29, 1947 | United Nations. Economic and Social Council | 29/07/1947 | official documents | E/PC/T/136 and E/PC/T/135-142 | https://exhibits.stanford.edu/gatt/catalog/fm754db3466 | fm754db3466_92290163.xml | GATT_155 | 1,279 | 8,329 | UNITED NATIONS NATIONS UNIES RESTRICTED
ECONOMIC CONSEIL E/PC/T/136
ECONOMIC 29 July 1947
AND ECONOMIQUE ORIGINAL: ENGLISH.
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYEMENT
TARIFF NEGOTIATIONS WORKING PARTY
REPORT ON THE
TEXT OF ARTTCLES 24 and 67 OF THE
DRAFT CHARTER
In the course of its consideration of the text of the
General Agreement on Tariffs and Trade, the Tariff Negotiations
Working Party has come to certain conclusions regarding the
contents of Articles 24 and 67 of the Draft Charter.
It considers that instead of the terms of Article 21+
parmitting negotiations either through the Tariff Committee
or on a strictly bilateral basis, it would be preferable for
the Article to be so drafted that all negotiations would be
through the Tariff Committee and that the results of such negotia-
tions should be incorporated in the General Agreement on
Tariffs and Trade. This would have the advantage of uniformity
and would avoid the anomaly of some Members complying with
Article 24 by adhering to the General Agreement and other
Members complying with the provisions of that Article simply by
undertaking independent bilateral negotiations with certain
other Members,
The proposed redrafts of Articles 24 and 67 have been
prepared on the above basis.
As a consequential change, it is proposed that paragraph
2 of Article 24 should be deleted. As the Organization will
be arranging for the negotiations through the Tariff Committee, E/PC/T/136
page 2
there is no need to maintain a provision to the effect that
each Member participating in such negotiations shall advise
the Organizations accordingly.
Some minor drafting changes are proposed to paragraph
3 of the New York Draft of Article 24- (new paragraph 2). The
last sentence of this paragraph is transferred to a new
paragraph 3. As regards Article 67, it is suggested that
provision relating to the voting power of each Member and to
majority votes required for decisions of the Committee, must
be left over until the Proparatory Committee has reached a
decision on these points in connection with its consideration
of Chapter VIII of the Charter.
The Working Party therefore wishes to recommend that the
amendments incorporated in the attached redrafts of the two
Articles should be dealt with by the Preparatory Committee
in whatcver way it considers most appropriate.
ARTICLE 24
Reduction of Tariffs and Elimination of Preferences
1. Each Member, other than a Member subject to the provisions
of Article 33, shall, upon the request of [any other Member or
Members], theOrganlization center into and carry out negotiations
with such other Member or Members as the Organization may
specify, negotiations directed te the substantial reduction of
tariffs and other charges on imports and exports and to the
climination of the preferences referred to in paragraph 2 of
Article 14 on a reciprocal and mutually advantageous basis.
These negotiations shall proceed in accordance with the
following rules: E/PC/T/136
page 3
(a) Prior international obligations shall not be permitted
to stand in the way of negotiations with respect to preferences,
it being understood that agreements resulting from such
negotiations shall not require the modification or termination
of exist ng international obligations except (i) with the consent
of the parties to such obligations, or, in the absence of such
consent, (ii) by termination of such obligations in accordance
with their terms.
(b) In the negotiations relating to any specific product -
(i) when a reduction is negotiated only in the most-
favoured-nat on rate), such reduction shall
operate automatically to reduce or eliminate
the margin of preference applicable to that
product; or
(ii) when a reduction is negotiated only in the
preferential rate, the most-favoured-nation
rate shall automatically be reduced to the
extent of such reduction; or
(iii) when it is agreed that reductions will be
negotiated in both the most-favoured-nation
rate and the preferential rate, the reduction
in each shall be that agreed by the parties to
the negotiations; and
(iv) no margin of preference shall be increased.
(c) The binding of low tariffs or of tariff-free treatment
shall in principle be recognized as a concession equivalent in
value to the substantial reduction of high tariffs or the
elimination of tariff preferences.
(d) The results of such negotiations shall be incorporated
in the General Agreement on Tariffs and Trade. signed at Geneva
on .... 1947, by agreement with the parties to that E/PC/T/136
page
[2. Each Member participating in negotiations pursuant to
paragraph 1 shall keep the Organization informed of the progress
thereof and shall transmit to the Organization a copy of the
agreement or agreements incorporating the results of such
negotiations.]
[3.] 2. If any Member considers that any other Member has
failed to fulfil its obligations under Paragraph 1 of ',.s
Article, such Member may refer the matter to the Organization
which, after investigation, shall male appropriate recommendations
to th Members concerned. If the Organization finds that a
Member has failed without sufficient justification, having regard
to its economic position and the provisions of the Charter as a
whole, to carry out negotiations with such complaining Member7
within a reasonable period of time in accordance with the
requirements of paragraph 1 of this Article, the Organization may
determine that / he complaining Member, or in exceptional cases
the Members generally,] any Member or Members shall, notwith-
standing the provisions of Article 14, be entitled to withhold
from the trade of the other Member any of the tariff benefits which
[the complaining Member, or the Members generally as the case may
be.] may have been negotiated pursuant to paragraph 1 of this
Article. If such benefits are in fact withheld, so as to result
in the application to the trade of the other Member of tariffs
higher than would otherwise have been applicable, such other
Member shall then be free, within sixty days after such action is
taken, to withdraw from the Organization upon the expiration of
sixty days from the date on which written notice of such with-
drawal is received by the Organization. [The provisions of this
paragraph shall operate in accordance with the provisions of
Article 67]
3. The provisions of this Article shall operate in accordance
with the provisions of Article 67. E/PC/T/136
page 5
ARTICLE 67
The Tariff Committee
1. There shall be a Tariff Committec which shall act on behalf
of the Organization in initiating and arranging for the
negotiations provided for under paragraph 1 of Article 24 and
in the making of recommendations and determinations pursuant
to paragraph 47 2 of Article 24.
2. The Committee shall consist [originally] of those Members
[of the Organization] which are [parties to] applying the General
Agreement on Tariffs and Trade, [dated] signed at Geneva on
......... .... 1947, [on the day on which this Charter enters
into force,] in accordance with Articles XXIV or XVXII of that
Agrreement. [Any other Member of the Organization shall be a
member of the Committee when, in the judgment of the Committee,
*that member shall have completed negotiations pursuant to
paragraph 1 of Article 4 comparable in scope or effect to those
completed by the original members of the Committee.]
3 3
4, X
5. The Committee shall adopt its own rules of procedure,
including provision for the election of its officers.
x The text of paragraph 3 (provision relating to voting power
of each Member,)and 4( provision relating to majority votes
required for decisions of the Committee) is still under
consideration in Sub-Committee.
NOTE: The preceding texts, on which the Working Party's proposed
deletions and additions air shown, are the ones which have been
tentatively approved by the Sub-Committees on Articles 14, 15 and
24, and Chapter VIII; respectively. |
GATT Library | dr660zg2646 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations Working Party. Schedules To Be Attached to the General Agreement on Tariffs and Trade | United Nations Economic and Social Council, August 7, 1947 | United Nations. Economic and Social Council | 07/08/1947 | official documents | E/PC/T/153 and E/PC/T/153-156 | https://exhibits.stanford.edu/gatt/catalog/dr660zg2646 | dr660zg2646_92290189.xml | GATT_155 | 0 | 0 | |
GATT Library | zx803xj0785 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tariff Negotiations Working Party. Schedules To Be Attached to the General Agreement on Tariffs and Trade | United Nations Economic and Social Council, August 7, 1947 | United Nations. Economic and Social Council | 07/08/1947 | official documents | E/PC/T/153 and E/PC/T/153-156 | https://exhibits.stanford.edu/gatt/catalog/zx803xj0785 | zx803xj0785_92290189.xml | GATT_155 | 1,568 | 10,261 | RESTRTCTED
ECONOMIC CONSEIL E/PC/T/153
AND ECONOMIQUE 7 August 1947
SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT,
TARIFF NEGOTIATIONS WORKING PARTY
Schedules To Be Attached to the General Agreement
on Tariffs and Trade.
In paragraph 10 on page 3 of its Report on the General
Agreement on Tariffs and Trade (document E/PC/T/135), the
Tariff Negotiations Working Party stated that it was giving
consideration to the form of the Schedules of tariff
concessions which are to be annexed to the Agreement. Having
completed its study of the Schedules, the Working Party now
reports accordingly.
In considering the Schedules, the Working Party has taken
account of the contents of Séction E, "Form of Tariff
Schedules"' and "Status of Preferential Rates of Duty" and
Section G of Annexure 10 to the Report of the First Session,
as well as of Part III of the Report of the Drafting Committee,
relating to the General Agreement. As regards Section G,
the Working Party feels that an arrangement on the general
lines of that which is proposed in the Report of the First
Session, will be adequate. However, in the light of develop-
ments since the First Session, the Schedules should now be
identified as follows:
Commonwealth of Australia Schedule I
Belgium-Luxemburg-Netherlands Schedule II
United States of Brazil Schedule III
Burma Schedule IV
Canada Schedule V
Ceylon Schedule VI
Republic of Chile Schedule VII
Republic of China Schedule VIII
Republic of Cuba Schedule IX
Czechoslovak Republic Schedule X
UNITED NATIONS
NATIONS UNIES E/PC/T/1 53
page 2.
French Republic (French Union) Schedule XI
India Schedulc XII
Dominion of New Zealand Schedule XIII
Kingdom of Norway Schedule XIV
Pakistan Schodule XV
Southern Rhodesia Schedule XVI
Syro-Lebanese Customs Union Schedule XVII
Union of South Africa Schedule XVIII
United Kingdom of Great Britain
and Northern Ireland Schedule XIX
United States of America Schedule XX
Subdivided Schedules will be necessary in the case of
some countries in order to provide adequately for certain
overseas territories. The first subdivision would relate
to the metropolitan territory and would be headed "Section A".
Those subdivisions relating to the overseas territories would
be headed Sections B, C, D, etc.
There is attached a draft sample Schedule covering
various types of concessions that may be granted. The
Schedule consists of a covering statement plus two Parts:
(1) Part I deals with obligations to m.f.n. countries,
and
(2) Part II deals with obligations to countries
receiving preferential treatment.
The Working Party is of the view that this division into
Parts I and II, although loading to a certain amount of
repetition in the description of products, has the advantage
of separating the concessions granted to two different groups
of Countries.
In the attached sample Schedule, the manner of dealing
with various types of concessions to countries enjoying m.f.n.
treatment is shown as follows:
(a) An ad valorem rate
(Item 23 - Naphthenic acids)
(b) A maximum margin of preference
(Item 48 - Electrical apparatus) E/PC/T/153
page 3.
(c) A specific rate
(Items 67 - Zinc oxide and
84 - Apples, fresh )
(d) A free rate
(Item 112 - Turpentine)
(e) (1) An ad valorem rate and
(2) A specific rate
on items within the same tariff item number
(Item 167 - Fish)
(f) Specific rates varying according to the value of the
product concerned, within the same tariff item number
(Item 202 - Steel ingots, cogged ingots, blooms and slabs)
(R) A specific rate plus freedom to impose an additional duty
on importation on removal of an existing margin of internal
tax preference
(Item 331 - Linseed oil)
(h) An ad valorem rate of duty which is supplemented by a
special ad valorem charge
(Item 367 - Automobiles)
(i) An ad valorem special charge other than ordinary customs
duty
(Item 538 - Table and kitchen articles)
(i) An ad valorem rate and an ad valorem maximum margin of
preference on the same item
(Item 841- - Typewriters)
The main questions that are likely to arise in connoction
with the manner of setting forth tariff concessions to
countries enjoying preferential treatment, are covered by the
above and by the examples given in Part II of the attached
sample Schedule. E/PC/T/1 53
page 4.
Consideration has been given to the case of certain
territories which are negotiating exclusively on maximum
margins of preference. In such cases, it is proposed that
paragraph 1 of the attached sample Schedule should be
replaced by a paragraph reading as follows:
"The products of the territories of the
contracting parties enumerated and described in
Part I of this Schedule, shall, on their importation
into Ruritania, be exempt from ordinary most-
favoured-nation customs duties which exceed the
preferential duties on such projects by more than
the margin of preference set forth and provided for
in Part I of this Schedule subject to the conditions
therein set out."
Ruritania Tariff Description of Products Margin of
Item Number Description of Products Preference
91 Petroleum 104 per gal.
110 Grease nil.
251 China Vases 10% ad val.
Where, however, negotiations are mainly on maximum
margins of preference but some concessions are granted on
m.f.n. rates, the procedure employed in the attached sample
Schedule rather than in the foregoing example should be
followed.
It is proposed that the Schedules to be annexed to the
General Agreement should be authentic in the two working
languages of the United Nations (English and French). E/PC/T/153
SCHEDULE I - RURITANIA page 5
1. The products of the territories of the contracting parties,
enumerated and described in Part I of this Schedule, shall, on their
importation into Ruritania, be exempt from ordinary customs duties
in excess of those set forth and provided for in Part I of this
Schedule, subject to the conditions therein set out. Such products
shall also be exempt from any other duties or charges imposed on or
in connection, with importation in excess of those inposed on the day
of the signature of this Agreement or required to be imposed there-
after under laws of Ruritania in force on that day.
2. The products enumerated and described in Part II of this
Schedule, which are products of the territories of contracting
parties entitled to receive preferential treatment upon importation
into Ruritania consistently with paragraphs 2 and 3 of Article I
of this Agreement, shall, upon importation into Ruritania, be exempt
from ordinary customs duties in excess of those set forth and pro-
vided for in Part II of this Schedule, subject to the conditions
therein set out, Such products shall also be exempt from all other
duties or charges imposed on or in connection with importation in
excess of those imposed on the day of the signature of this Agreement
or required to be imposed thereafter under laws of Ruritania in force.
on that day.
3. Nothing in this Schedule shall prevent the Government of
Ruritania from imposing at any time on the importation of any product
(a) a charge equivalent to an internal tax imposed in respect
of the like domestic product or in respect of an article from which
the imported product has been manufactured or produced in whole or
in part, or
(b) any anti-dumping or countervailing duty applied consis-
tently with the provisions of Article V of this Agreement, or
(c) fees or other charges commensurate with the cost of ser-
vices rendered. E/PC/T/153
page 6
SCHEDULE I - RURITUNIA
Ruritania
Tariff Item
Number
Description of Products
Rate of Duty
Naphthenic Acids
Electrical apparatus
NOTE: The products provided for under
Item 48 shall be exempt from ordin-
ary most-favoured-nation customs
duties which exceed the preferential
duties on such products by more than
10% ad valorem
Zinc oxide
Apples, fresh
Turpentine
Fish:
Salmon
Oysters
Stee1 ingots, cogged ingots, blooms
and slabs, by whatever process
made:
valued at not more than 1½¢ per lb.
valued at more than l½¢ per lb.
Linseed oil
12½% ad val.
1-1/10¢ per lb.
60 per 100 lbs
gross
Free
10% ad val.
$1.40 per 100
lbs.
3/10¢ per lb.
4/10¢ per lb.
2/ per lb.
NOTE: The Government of Ruritania shall,
on or after the day on which it re-
moves the existing margin of internal
tax preference on linseed oil, be free
to impose, in addition to the duty
specifically provided for under this
item, a duty on importation which shall
not be more than equivalent to such
margin of preference.
Automobiles
40% ad val.
plus special
charge (eg.,
primage, mon-
opoly fee, sur-
tax,etc.) not
in excess of
8% ad val.
Table and kitchen articles
NOTE: The products provided for under
Item 538 shall not be subject to Li ame
of special charge other than ordinary
customs duty, such as primage, monopoly
fee, surtax,etc] in excess of 8% ad val.
841 Typewriters
Part I
23
48
67
84
112
167
202
331
367
538
30% ad val. E/PC/T/153
page 7
SCHEDULE I - RURITANIA
Part I (Cont'd)
NOTE: The products provided for under Item 841
shall be exempt from any ordinary most-
favoured-nation customs duty which exceeds the
preferential duty on such products by more than
5% ad valorem.
Part II
Description of Products
Naphthenic acids
Linseed oil
Table and kitchen articles
Scientific instruments
Wheat flour
Rate of Duty
8% ad, val.
1½c per lb,
20% ad val.
15% ad val.
$1.00 par
100 kgs.
Ruritania
Tariff
Item
Number
23
331
538
io06
1348 |
GATT Library | wb552dy4909 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tenth Report By the Tariff Negotiations Working Party | United Nations Economic and Social Council, July 23, 1947 | United Nations. Economic and Social Council | 23/07/1947 | official documents | E/PC/T/133 and E/PC/T/124-135 | https://exhibits.stanford.edu/gatt/catalog/wb552dy4909 | wb552dy4909_92290159.xml | GATT_155 | 198 | 1,315 | UNITED NATIONS
ECONOMIC CONSEIL
AND ECONOMIQUE
SOCIAL COUNCIL ET SOCIAL
UNRESTRICTED
E/PC/T/133
23 July 1947
ORIGINAL: ENGLISH
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
TENTH REPORT
By the
Tariff Negotiations Working Party.
Three more of the tariff negotiations were completed
in their bilateral stage auring the fortnight ending 12 July.
The South African delegation was a party to each of these
and the other parties were China, Czechoslovakia and Norway.
The number of negotiations that have now reached this stage
of completion is seven.
It is to be understood that the results of these
negotiations are subject to any adjustment that may be required
in the light of other negotiations as they are completed and
are to be incorporated in the schedules to be annexed to the
General Agreement on Tariffs and Trade; further, the General
Agreement, when arrived at, may be subjet o approval by the
authorities of the countries concerned.
The total number of negotiations is now 102, 84
meetings ware held during the fortnight ending 12 July,
bringing the total number of meetings to 467. Nine pairs
of countries have held more than ten meetings.
NATIONS UNlES |
GATT Library | sg735yr3996 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tenth Report by the Tariff Negotiations Working Party | United Nations Economic and Social Council, July 3, 1947 | United Nations. Economic and Social Council | 03/07/1947 | official documents | E/PC/T/120 and E/PC/T/106-124 | https://exhibits.stanford.edu/gatt/catalog/sg735yr3996 | sg735yr3996_92290146.xml | GATT_155 | 214 | 1,460 | UNITED NATIONS NATIONS UNIED UNRESTRICTED
ECONOMIC CONSEIL E/PC/T/120
AND ECONOMIQUE 3rd July 1947
SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
TENTH REPORT
BY
THE TARIFF NEGOTIATIONS WORKING PARTY.
During the fortnight ended 28 June 4 pairs of countries
completed the bilateral stage of their negotiations. These are:
Chile - Norivay
Chile - South Africa
China - South Africa
Cuba - South Africa
It is to be understood that the results of these negotiations
are subject to any adjustment that may be requIred ln the light
of other negotiations as they are completed and are to be
incorporated in the schedules to be annexed to the General
Agreement on Tariffs and Trade; further, the General Agreement,
when arrived at, may be subject to approval by the authorities
of the countries concerned.
(The completion of negotiations between Canada and Norway
was reported in E/PC/T/107 of 24 June.)
Three meetings for the opening of tariff negotiations were
held during the fortnight ending 28th June, and the total
number of negotiations is now ninety-six. 85 meetings were
held during the past fortnight bringing the total number to 383.
6 pairs of countries have held more than 10 meetings.
UNITED NATIONS
NATIONS UNIES I UC |
GATT Library | jm272sz2390 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Text of Article 44 - A as Adopted by Commission B | United Nations Economic and Social Council, June 19, 1947 | United Nations. Economic and Social Council | 19/06/1947 | official documents | E/PC/T/104 and E/PC/T/92-105 | https://exhibits.stanford.edu/gatt/catalog/jm272sz2390 | jm272sz2390_92290124.xml | GATT_155 | 404 | 2,742 | ECONOMIC CONSEIL 19 June 1947
AND ECONOMIQUE
SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
TEXT OF ARTICLE 44 - A
AS ADOPTED BY COMMISSION B
Pursuant to the instructions received by the
Chairman of Commission B, the Secretariat herewith
re-produces the text of Article 44 - A, as adopted by
Commission B in its 12th meeting, held on Thursday, l9th
June 1947 :
Article 44 - A
Procedure with respect to services
1. Members recognize that certain services, such as
transportation, telecommunications, Insurance and
banking, are substantial elements of international
trade, and that any restrictive business practices
In relation to them may have harmful consequences
similar to'those described in Article 39. Such
practices shall be dealt 'ith in accordance with
the following paragraphs of this Article.
2. If any Member should consider that there exist
restrictive business practices in relation to an
International service In the,meaning of Paragraph 1
which have or are about to have such harmful effect,
and that its interests are seriously prejudiced by
this situation, the Member may submit a written
statement explaining the situation to the Member or
Members the public or private enterprises of which are
engaged in the services in question. The Member or
Members concerned shall give sympathetic consideration
to the statement and to such proposals as may be made
with a view to affording adequate opportunities of
consultation and effecting a satisfactory adjustment
of the matter.
3. If no adjustment can be effected in accordance with
the provisions of Paragraph 2, and if the matter Is
referred to the Organization it shall be transferred
to the appropriate specialized inter-governmental
agency if one exists, with such observations as the
Organization in its discretion may wish to make.
If no such specialized agency exists, Members may,
under Article 61 (c), ask the Organization to make
recommendations for, and promote international agreement
on, measures designed to remedy the particular situation
so far as it relates to the Purposes of the Organization.
P. T.O.
NATIONS UNIES
UNITED NATIONS
RESTRICTED page 2
4.. The Organization shall, subject to Article
61 (e), co-operate with specialised inter-
governmental agencies ln connection with
restrictive business practices affecting the
gencral field covered by the Charter and those
agencies shall be entitled to consult the
Organization, to seek advice, and to ask that
a study of a particular problem be made." |
GATT Library | vp783rj7452 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Text of Article XXIX of the General Agreement on Tariffs and Trade as Amended up to September 18, 1947 by the Tariff Agreement Committee | United Nations Economic and Social Council, September 17, 1947 | United Nations. Economic and Social Council | 17/09/1947 | official documents | E/PC/T/204 and E/PC/T/196-209 | https://exhibits.stanford.edu/gatt/catalog/vp783rj7452 | vp783rj7452_92290259.xml | GATT_155 | 502 | 3,255 | RESTRICTED
ECONOMIC CONSEIL E/PC/T/204
AND ECONOMIQUE 17 September 1947
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Text of Article XXIX of the General Agreement
on Tariffs and Trade as Amended up to
September 18, 1947 by the Tariff Agreement Committee
ARTICLE XXIX
"Relations of this Agreement to the Charter of an International
Trade Organization".
1. The Contracting Parties, recognizing that the objectives
laid down to this Agreement, can best be attained through the
adoption by the United Nations Conference on Trade and Employment
of a Charter for an International Trade Organization, thereby
leading to the creation of such an Organization, undertake, pend-
ing their acceptance of a Charter in accordance with their constit-
utional procedures, to observe to the fullest extent of their
executive authority the general principles of the Draft Charter
submitted to the Conference by the Preparatory Committee.
2. On the day on which the Charter of the International Trade
Organization enters into force, Part II of this Agreement shall be
suspended and superseded by the corresponding provisions of the
Charter. Provided that within sixty days of the closing of the
United Nations Conference on Trade and Employment any contracting
party to this Agreement may lodge with the Contracting Parties an
objection to any provision or provisions of this Agreement being
so suspended and superseded.
3. Within sixty days after the final date for the lodging of
objections, the contracting parties shall, if any such objection
has been lodged, confer to consider the objection and to agree
UNITED NATIONS^N
TIONS UNIES N N' P '.S E/PC/T/204
page 2
whether the relevant provisions of thE Charter to which objection
has been lodged shall apply, or whether the relative provision of
this Agreement in its existing form, or in any amended form,
should apply. The contracting parties will agree concerning the
transfer to the International Trade Organization of their functions
under Article XXV.
4. If any contracting party has not accepted the Charter when
it has entered into force, the contracting parties shall confer to
agree whether, and if so in what way, the Agreement insofar as it
affects relations between the contracting party which has not
accepted the Charter and other contracting parties shall be sup-
plemented or amended.
5. On 1 January 1949, should the Charter not have entered
into force, or on such earlier date as may be agreed if it is known
that, the Charter will not enter into force or on such later date
as is agreed if the Charter ceases to be in force, the contracting
parties shall meat to agree whether this Agreement should be
amended, supplemented or maintained.
6. Any objection lodged by a contracting party under the pro-
visions of paragraph 2 of this Article and any Agreement which may
be reached between the contracting parties under Paragraphs 3 or 4,
shall be notified for information to the signatories of the Final
Act which are not at the time contracting parties. |
GATT Library | qg610mc3690 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Text of Article XXVI as amended up to September 18, 1947 | United Nations Economic and Social Council, September 17, 1947 | United Nations. Economic and Social Council | 17/09/1947 | official documents | E/PC/T/205 and E/PC/T/196-209 | https://exhibits.stanford.edu/gatt/catalog/qg610mc3690 | qg610mc3690_92290260.xml | GATT_155 | 514 | 3,401 | UNITED NATIONS NATIONS UNIES RESTRICTED
E/PC/T/205
ECONOMIC CONSEIL
AND ECONOMIQUE 17 September 1947
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
TARIFF AGREEMENT COMMITTEE
GENERAL AGREEMENT ON TARIFFS AND TRADE
Text of ARTICLE XXVI as amended up to September 18,
Article XXVI - Acceptance, Entry into Force and Registration.
1. The present Agreement shall boar the date of the signature
of the Final Act adopted at the conclusion of the Second Session
of the Preparatory Committee for the United Nations Conference
on Trade and Employment and shall be open to acceptance by any
government signatory to the Final Act.
2. The original of this Agreement done in the English and
French languages, each in single copy, both authentic, shall be
deposited with the Secretary-General of the United Nations, who
shall furnish certified copies thereof to all interested govern-
ments.
3. Each government accepting this Agreement shall deposit an
instrument of acceptance with the Secretary-General of the United
Nations, who will inform all interested governments of the date
of deposit of each instrument of acceptance and of the date on
which this Agreement enters into force under paragraph 5.
4. Éach government accepting this Agreement does so in respect
of its metropolitan territory and of the other territories for
'ich it has international responsibility; Provided that it rnay
the time of acceptance declare that any separate customs
rritory for which it has international responsibility possesses E/PC/T/205
Page 2.
full autonomy in the conduct of its external commercial relations
and of the other matters provided for by this Agreement, and that
acceptance does not relate to such territory; provided further
that if any of tho customs territories on behalf of which a con-
tracting party has accepted this Agreement possesses or acquires
full autonomy in the conduct of its external commercial relations
and of the other matters provided for by this Agreement, such a
territory shall, upon sponsorship through a declaration by the
responsible contracting party establishing the above-mentioned
fact be deemed to be a contracting party.
5. This Agreement shall enter into force, as among the govern-
ments which have accepted it, on the thirtieth day following the
day on which instruments of acceptance have been deposited with
the Secretary-General of the United Nations on behalf of signatory
governments the territories of which account for 85% of the total
trade of the territories of the governments signatory of the Final
Act adopted at the conclusion of the Second Session of the Prepara-
tory Committee for the United Nations Conference on Trade and
Employment, as set forth in Annex G. The instrument of acceptance
of each other government sïgnatory to the Final Act shall take
effect on the 30th day following the day on which such instrument
was deposited; Provided that no such entry into force shall take
place until any agreement necessary under the Provïsions of para-
graph 2 of Article XXIX has been reached.
6. The United Nations is authorized to effect registration of
this Agreement as soon as it comes into force. |
GATT Library | qy073hn8972 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Text of Chapter VI as Approved by Commission B on June 27, 1947 | United Nations Economic and Social Council, June 28, 1947 | United Nations. Economic and Social Council | 28/06/1947 | official documents | E/PC/T/112 and E/PC/T/106-124 | https://exhibits.stanford.edu/gatt/catalog/qy073hn8972 | qy073hn8972_92290134.xml | GATT_155 | 2,087 | 14,385 | UNITED NATIONS
RESTRICTED
ECONOMIC CONSEIL E/PC/T/112
AND ECONOMIQUE 28 June, 1947
SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH
SECOND SESSION OF THE PREPARATORY COMITTEE OF THE
UNITED NATIONS CONFRENCE ON TRADE AND EMPLOYMENT.
TEXT OF CHAPTER VI
AS APPROVED BY COMMISSION B
ON JUNE 27, 1947.
CHAPTER VI. RESTRICTIVE BUSINESS PRACTICES
Article 39
Policy towards restrictive business practices
1. Members shall take appropriate measures, individually or
through the Organization or in both ways to prevent business
practices atfecting international trade whether engaged in by
private or public commercial enterprises) which restrain
-.oompetition, limit access to markets, or foster monopolistic
control, whenever such practices have harmful effects on the
expansion of production or trade and interfere with the achieve..
ment of any of the other purposes of the Organization as set
-forth In Article 1.
2. Without limiting the generality of paragraph 1 of this
Article, and in order that the Organization may decide in a
particular instance whether certain practices 'ave or are about
to have any of the effects referred to in paragraph 1, complaints
regarding any of the practices listed in paragraph 3 shall be
subject to investigation in accordance with the procedure
regarding complaints provided in Articles 40 and 42, whenever
(a) such complaint is presented to the Organization; and
(b) the practices are engaged in or are made effective by
one or more public or private commercial enterprises or by a
combination, agreement or other arrangement between commercial
enterprises, whether betwecn private.commercial enterprises.,
between public commercial enterprises, or between private and
public commercial enterprises; and
(o) such cL=nercir.1 enterprises, individually or collectively,
possess effective control of trade among two or more countries
in one or more
3. The-practices referred to in paragraph 2 above are the
following:
(a) fixing prices ir terms or conditions to be observed
in dealing with others in the purchase, sale or lease of any
product;
NA TIONS UNIES E/PC/T/112
page 2
(b) excluding enterprises from sny territorial market
or field of business activity, relocating or dividing
eny territorial market or field of business activity,
allocating customers, or fixing sales or purchase quotas;
(o) discriminating against particular enterprises;
(d) limiting production or fixing production quotas;
(e) preventing by agreement the application or develop-
ment of technology or invention whether patented or
unpe tented;
(f) extending the use of rights under patents, trade
marks or copyrights, granted by any Member, to metters
which are determined by its system of law not to be
within the scope of such grants, or to products or.
conditions of production, use or sale which are similarly
determined not to be the subjects of such grants;
* (g.) any similar practices which the Organization may
from time to time decide to be restrictive business
practices.
4. In this Article "public commerciRl enterprises"
means
(a) trading agencies of governments, und
(b) enterprises wholl;- or mainly owned by public
>"g authority over which there is effective control by
public authority, including control of engagement in
the practices listed in paragraph 3.
"Private commercial. enterprises"means all other
* commercial enterprises.
Article 40
Procedure with respect to
Investigations end consultations
1. The Orgenization s8all arrange, if it considers
such action to be Justified on the basis of information
* suBmitted by the Members concerned, for particular Merobers
to take part in a consultation requested by eny affected
Member which considers that in any particular instance
practices exist (%hether engaged in by private or
public commercial enterprises) which have or are about
to have the effect described in paragraph 1 of Article
39. E/PC/T/112
page 3
2. A complaint may be presented to the Organization
by any affected Niember on its own behalf, or by any Member
on behalf of any affected person, organization or business
entity within that Meniber1s jurisdiction, provided that, in
the case of a complaint against a single public commercial
enterprise (us defined in Articie 39) acting independently,
such complaint rany be presented only by a ±viumber on its own
behalf and only after the Member has resorted to the proced-
ure under paragraph 1 of this Article.
3. The OrLaniïxtiocu shall prescribe minimum information
te be included in complaints claiming that particular practices
exist and have or are about te have the effect described in
paragraph 1 of Article 39. T'he information shall give
substantial indication of the nature and harmful effects of
the practices.
4. In order te decide whether an investigation of a complaint
is justified, the Organization shall consider each written
complaint submitted in accordance with paragraph 2 of this
iAticle, review all relevarnt'information, and decide whether
an investigation is justified. If the Orùanization deems
that further inforoLtion is necessary before such decision can
be reached, it shall request each Mcubcr ,c.eccrned to furnish
supplementary information, including for exunple information
from cornmerciaJ enterprises wi.;hin the jurisdiction of the
Liembers concerned.
5. If the Organization decides that an investigation is
justified, it shall notify all Meubers of the complaint,
request any Miember te provide such additional information rele-
vant te the complaint as the O._anization may deem necessary,
and shall conduct or arrange for hearings on the complaint.
Any Member, and any affected person, organization or business
entity on whose behalf a complaint is made, as well as the
parties alleged te have engSaed in,the practice complained of,
shall be afforded. reasonable opportunity te be heard at such
hearings.
6. The_ Orbanization shall review all information available
and decide whether the practices in question have had or are
about te have the effect described in paragraph 1 of Article 39
7. Tixi Organization shall report fully te all Members its
decision and the reasons therefor.
8. If ttiç Organization decides that in any pqrUicular case
the practices comuplained of have had or ere aGout te have tbe
effect described in paraGraph 1 of hricle 39, it shall request
each Member concerned te take evury possible remedial action,
and may recommend te the L±>tUX Wv;c4r'ed remedial measures
to bu carried out in accordance with their respective laws
and procedures.
9. The Orcanization may request any.Mrvbers concerned te
report fully on the remedial action it has taken in any
particular case. E/PC/T/112
page 4
10 As soon as possible after its enquiries concerning any
complaint dealt with under paragraphs 3 to 7 of this Article
have been provisionally or finally closed, the Organization
shall prepare and publish a report showing fully the
decisions reached, the reasons therefor and any action
recommended to the Minmbers concerned. however, the
Organization shall not, if a Membbor so requests, disclose
confidential, information furnished by that Member which would
materially damage the legitimate business interests of a
commercial E-nterprise.
11. The Organization shall report to ail Memberb and make
public the remei.ial actions which have been taken by tho
Members concerned in any particular case,
Article 41
Studies relating to restrictive business practices
1. The Organization is authorized
(a) to conduct studies either on its own initiative or at
the request of any Member or of any organ of the United
Nations or of any other inter-governmental organization,
relating to
(i) general aspects of restrictive business practices
affecting international trade; and
(ii) conventions, laws and procedures concerning, for
example, incorporation, company registration, invest-
* moments, securities, prices, markets, fair trade
practices, trade marks, copyrights, patents and the
exchange and development of technology, insofar as they
are relevant to restrictive business practices
affecting international trade; and
(iii) registration of restrictive business agreements
and other arrangements affecting international trade;
and
(b) to request information from Members in connection with
such studies.
2e The Organization is authorized
(a) to make recommendations to Members concerning su^h
conventions, laws and procedures as are relevant to thoir
obligations under this Chapter; and
(b) to arrange for conferences of Members to discuss any
matters relating t, restrictive business practices affecting
international trade. E/PC/T/I112
Page 5.
Article 42
Obligations of Members
1. Each Member shall take all possible measures by legis-
lation or otherwise to Pnsure, within its jurisdiction, that
private and public commercial enterprises do not engage in
practices which have the effect described in paragraph 1 of
Article 39 and in addition shall assist the Organization
in preventing these practices, such measures to be taken in
accordance with the Momber's system of law and economic
organization.
2. Each Member shdll make adequate arrangements for
presenting complaints, conducting investigations and preparing
information ana reports requested by the Organization.
3. Each Member shall furnish to the Organization, as
promptly and as fully as possible, such information as is
requested by the Organization for its consideration and its
investigation of complaints and for its conduct of studies
under this Chapter, provided that any Member
(a) may withhold confidontial information relating to
its national security; and
(b) on proper notification to the Organization, may
withhold information which the Member considers is not
essential to the Organization in conducting an
adequate investigation and which, if disclosed, would
materially damage the legitimate business interests
of a commercial enterprise. In notifying the
Organization that it is withholding information
pursuant to this clause, the Member shall indicate
the general character of the information withheld,
and the reasons why it considers it not essential.
4. Each Momber shall take full account of each decision,
request and recommendation of the Organization under para-
graphs 6 and 8 of Article 40 and, in accordance with its
system of law and economic organization, take in the
particular case the action it considers appropriate in the
light of its obligations under this Chapter.
5. Bach Member shall report any action taken, independently
or in concert with other Members, to implement decisions.
made by the Organization, and, when no action has beon
taken, inform the Organization oe the reasons therofor and
discuss the matter further with the Organization if requested
to do s9. E/PC/T/112
page 6.
6. Each MIember shall, at the request et the
organizatinn, take part in consultations and conferences
provided for in this Chapter with a view to reaching
mutually satisf'oc.tory conclusions.
Article 43
Supplementary enforcement arrangements
1. Members may co-operate with each other in
prohibitive, preventive or other measures for the
purpose pf making mriorc effective any remedial order
issued by a duly authorized ugency of any Member in
furtherance of the objectives of this Chapter.
2. ILiembers participating in or intending to
participate in such cQ-oporative action shall notify
tho Organization.
Article 44
Continued effectiveness of domestic measures
against restrictive business practices
No act or omission to act on the part of the Organization
shall preclude any Member from enforcing any national
statute or decree directed towards preventing monopoly or
restraint of trade.
Article 44 - A
Procedure with respect to services
1. Members recognize that certain services, such as
transportation, telecommunications, insurance and
banking, are substantial elenients of international
trade, eFnd that any restrictive business practices in
relation to them may have harmful consequences similar
to those doscribed in Article 39. Such practices
shall be dealt with in accordance with'the following
paragraphs of this Article.
2. If any Miember should consider that there exist
restrictive business precçices in relation to an
international service in the meaning of Paragraph 1
which have or are about to have such harmful effects,
and that its interests are seriously prejudiced by
this situation, the Miember may submit a written
statement explaining the situation to the blember or
Members the public or private enterprises of which are
engaged in the services in question. The Member or
Members concerned shall give sympathetic consideration
to the statement and to such proposals as may be made
with a view to affording adequate opportunities of
consultation and effecting a satisfactory adjustment
of the matter, E/PC/T/1 12
page 7,
3. IlI no adjustment can be eff1ected in accordance
with the provisions of Pararraph 2, and if the matter
is referred to tho Organizatior. it shall be transferred
to the appropriate %nter-governmontal organization if
one existed, with such obsorvationo as the Organization
in its discretion may wiïh to maku. If no such inter-
governmental organization existed, blombers may, urder
Article 61(c), ask the Organization to, make recommanda-
tions for, and proinote international agreement on,
measures designed to remedy the particular situation
so far as it relates to the purposes of the Organization.
>4. The Organization shall, subject to Article 61(e),
co-operate with inter-governmental organizations in
connect' on with restrictive business pract ices af'octing
tho general field covorèd by the Charter and those
intor-governmental organization shall be antitlad to
cc:isult the Organization, to seek advice, and to ask
that a study of a particular problem be inade.» |
GATT Library | ts709ht0903 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Text of Chapter VII as approved by Commission B Chapter VII - Inter-Governmental Commodity Agreements | United Nations Economic and Social Council, July 7, 1947 | United Nations. Economic and Social Council | 07/07/1947 | official documents | E/PC/T/123 and E/PC/T/106-124 | https://exhibits.stanford.edu/gatt/catalog/ts709ht0903 | ts709ht0903_92290149.xml | GATT_155 | 0 | 0 | |
GATT Library | nb738pf6250 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Text of Chapter VII as approved by Commission B Chapter VII - Inter-Governmental Commodity Agreements | United Nations Economic and Social Council, July 7, 1947 | United Nations. Economic and Social Council | 07/07/1947 | official documents | E/PC/T/123 and E/PC/T/106-124 | https://exhibits.stanford.edu/gatt/catalog/nb738pf6250 | nb738pf6250_92290149.xml | GATT_155 | 3,612 | 24,342 | UNITED NATIONS
ECONOMIC CONSEIL RESTRICTED
AND ECONOMIQUE E/PC/T/123
SOCIAL COUNCIL ET SOCIAL 7 July 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
TEXT OF CHAPTER VII
AS APPROVED BY COMMISSION B
CHAPTER VII - INTER-GOVERNMENTAL COMMODITY AGREEMENTS*
SECTION A - GENERAL CONSIDERATIONS
ARTICLE 46 (46)**
DIFFICULTIES RELATING TO PRIMARY COMMODITIES
The Members recognize that the conditions under which
some primary commodities are produced, exchanged and consumed
are such that international trade in these commodities may be
affected by special difficulties such as the tendency towards
persistent disequilibrium between production and consumption,
the accumulation of burdensome stocks and pronounced
fluctuations in prices. The special difficulties may have
serious adverse effects on the interests of producers and
consumer, as well as widespread repercussions jeopardizing
the general policy of economic expansion. Members agree
that such difficulties may, at times, necessitate special
treatment of the international trade*** in such commodities
through inter-governmental agreement,
* Throughout this text, the word "arrangement" has been
replaced by "agreement". This change is subject to the
approval of the Legal Drafting Committee. It is under-
stood that all forms of inter-governmental arrangement,
understanding or other form of co-ordinated action, are
intended to be covered by the one term "agreement".
** Numbers in brackets indicate equivalent Article in
New York text:
*** In Article 46, in speaking of the need to adopt "special
treatment if the international trade in such commodities",
the Sub-Committee had in mind merely that international
trade is the aspect of a particular commodity problem
directly appropriate for international treatment. It
was understood, however, that agreement regarding the
treatment of the international trade in a commodity
might involve agreement regarding production or consumption
of the commodity.
NATIONS UNIES E/PC/T/123
page 2
ARTICLE 47 (60(1))
PRIMARY AND RELATED COMMODITIES
1. For the purposes of this Chapter, the term "primary
commodity" means any product of farm, forest or fishery or
any mineral, in its natural form or subjected to such
processing as is customarily required to prepare it for
marketing in substantial volume in international trade.
2. The term shall also cover a group of commodities, of
which one is a primary commodity as defined in paragraph 1
and the others are commodities (whether primary or non-
primary) which are so closely related, as regards conditions
of production or utilisation, to the other commodities in the
group, that it is appropriate to deal with them in a single
agreement.
3. If, in exceptional circumstances, the Organization
finds that the conditions set forth in Article 53 exist in the
case of a commodity which does not fall precisely under
paragraphs 1 or 2 above, the Organization may determine that
the principles and provisions of Chapter VII, together with
any other requirements it may establish, shall apply to inter-
governmental agreements regarding that commodity.
ARTICLE 48 (47)
7 OBJECTIVES OF INTER-GOVERNMENTAL COMMODITY AGREEMENTS
The Members recognize that inter-governmental commodity
agreements may be employed to achieve the following objectives:
(a) to prevent or alleviate the serious economic problems
which may arise when adjustments between production and
consumption cannot be effected by normal market forces
alone as rapidly as the circumstances require;
(b) to provide, during the period which may be necessary, a
framework for the consideration and development of
measures which have as their purpose economic adjustments
designed to promote the expansion of consumption or a
shift of resources and manpower out of over-expanded
industries into new and productive occupations;
(c) to moderate pronounced fluctuations in the price of a
primary commodity with a view to achieving a reasonable
degree of stability on a basis of prices fair to
consumers and remunerative to efficient producers,
having regard to the desirability of securing long-
term equilibrium between the forces of supply and
demand;
(d) to maintain and develop the natural resources of the
world and protect them from unnecessary exhaustion; E/PC/T/123
page 3
(e) to provide for the expansion of the production of a
primary commodity where this can be accomplished
with advantage to consumers and producers;
(f) to assure the equitable distribution of a primary
commodity in short supply.
SECTION B - INTER-GOVERNMENTAL COMMODITY AGREEMENTS IN GENERAL
ARTICLE 49 (48)
SPECIAL COMMODITY STUDIES
1. Any Member which is substantially interested in the
production or consumption of, or trade in, a particular primary
commodity, and which considers that international trade in that
commodity is, or is likely to be, affected by special difficulties,
shall be entitled to ask that a study of the commodity be made.
2. Unless it resolves that a prima face case has not been
established, the Organization shall promptly invite all Members
to appoint representatives to a Study Group to make a study of
the commodity, if they consider that they have a substantial
interest in the production or consumption of, or trade in, the
commodity. Non-Members may also be invited.
3. The Study Group shall promptly investigate the production,
consumption and trade situation in regard to the commodity, and
shall report to the participating Governments and to the
Organization its findings and its recommendations as to how best
to deal with any special difficulties which may exist or may be
expected to arise. The Organization shall promptly transmit to
the Members these findings and recommendations.
ARTICLE 50 (49)
COMMODITY CONFERENCES
1. On the basis of the recommendations of a Study Group, or at
the request of Members whose interest represents a substantial
part of world production or consumption of, or trade in, a
particular primary commodity, the Organization shall promptly
convene an inter-governmental conference to discuss measures
designed to meet the special difficulties which exist or are
expected to arise. The Organization may also, on its own
initiative, call such a conference on the basis of information
agreed to be adequate by the Members having a substantial
interest in the commodity.
2. Every Member which considers that it has a substantial
interest in the production or consumption of, or trade in, the
commodity concerned, shall be invited to participate in such a
Conference. Non-Members may also be invited to participate. E/PC/T/123
page 4
ARTICLE 51 (51 and 58)
GENERAL PRINCIPLES OF INTER-GOVERNMENTAL COMMODITY AGREEMENTS
1. Members shall adhere to the following principles governing
the operation of all types of inter-governmental commodity
agreements:
(a) such agreements shall be open initially to
participation by any Member on terms no less
favourable than those accorded to any other country
and thereafter in accordance with such procedure and
upon such terms as may be established by the Commodity
Council subject to approval by the Organization;
(b) non-Members may be invited by the Organization to
participate in such agreements and the provisions
of sub-paragraph (a) of this Article applying to
Members shall apply to any non-Member so invited;
(c) under such agreements there shall be equitable
treatment as betwcen participating countries and non-
participating Members, and the treatment accorded by
participating countries to non-participating Members
shall be no less favourable than that accorded to any
non-participating non-Member; due consideration
being given in each case to policies adopted by non-
participants in relation to obligations assumed and
advantages conferred under the agreement;
(d) such agreements shall include provision for adequate
participation of countries substantially intevested
in the importation or consumption of the commodity
as well as those substantially interested in its
exportation or production;
(e) full publicity hall be given to any inter-governmental
commodity agreement proposed or concluded, to the
statements of considerations and objectives advanced
by the proposing Members, to the nature and development
of measures adopted to correct the underlying
situation which gave rise to the agreement and,
periodically, to the operation of the agreement.
2. Members, including Members not parties to a particular
commodity agreement, shall give favourable consideration to any
recommendation made under such agreement for expanding consumption
of the commodity in question. E/PC/T/123
page 5
ARTICLE 52 (60(3) and 53(a))
TYPES OF AGREEMENTS
1. For the purposes of this Chapter, there shall be
recognized two classes of inter-governmental commodity
agreements:
(a) Commodity control agreements as defined in this
Article; and
(b) Agreements other than commodity control agreements.
2. [ Subject to the provisions of paragraph 5 of this Article]*
a commodity control agreement" is an inter-governmental
agreement which involves:
(e) the regulation of production or the quantitative
control of exported or imported of primary commodity
and has the purpose or might have the effect of
reducing, or preventing an increase in, the production
of, or trade in, that commodity; or
(b) the regulation of prices
3. The Organization shall, on the request of a Member, a
Study Group, or a Commodity Conference, make a finding as to
whether an existing or proposed inter-governmental agreement is
a commodity control agreement within the term of paragraph 2
of this Article.
4. (a) Commodity control agreements shall be subject to all
of the provisions of this Chapter.
(b) Agreements other than commodity control agreements
shall be subject to the provisions of this Chapter
other than those of Section C. If, however, the
Organization finds that an agreement which involves
the regulation of production or the quantitative
control of exported or imports is not a commodity
control agreement within the term of paragraph 2,
the Organization shall stipulate to which, if any,
of the provisions of Section C that agreement shall
conform.
* The Legal Drafting Committee is to be asked whether, in
its view, the words shown in square brackets are redundant
and might be deleted. E/PC/T/123
page 6
5. The Organization may find that an existing or proposed
inter-governmental agreement which has the purpose of securing
the co-ordinated expansion of aggregate world production and
consumption of a primary commodity is not a commodity control
Agreement even though the agreement contains provision for the
future application of minimum prices; provided that any such
agreement shall be deemed to be a commodity control agreement
and shall conform to all the provisions of Section C from the
date on which its minimum price provisions become operative.
6. Members agree not to enter into any new commodity control
agreement, unless it has been recommended by a conference called
in accordance with Article 50. If, in an exceptional case,
there has been unreasonable delay in the proceedings of the
Study Group or of the Commodity Conference, Members substantially
interested in the production and consumption of or trade in, a
particular primary commodity, m.y proceed by direct negotiation
to the conclusion of an agreement, provided that it conforms
to the other provisions of this Chapter.
SECTION C - INTER-GOVERNMENTAL COMMODITY CONTROL AGREEMENTS
ARTICLE 53 (52)
CIRCUMSTANCES GOVERNING THE USE OF COMMODITY CONTROL AGREEMENTS.
1. Members agree that commodity control agreements may be
employed only when it is determined that:
(a) a burdensome surplus of a primary commodity has
developed or is expected to develop, which, in the
absence of specific governmental action, would cause
serious hardship to producers, among whom are small
producers who account for a substantial portion of
the total output, and these conditions could not be
corrected by normal market forces in time to prevent
such hardship, because characteristically, in the
case of the primary commodity concerned, a substantial
reduction in price does not readily lend to a
significant increase in consumption nor to a
significant decrease in production; or
(b) widespread unemployment or underemployment in connection
with a primary commodity, arising out of difficulties
of the kind referred to in Article 46, has developed
or is expected to develop, which, in the absence of
specific governmental action, would not be corrected
by normal market forces in time to prevent widespread
and undue hardship to workers, because characteristically,
in the case of the industry concerned, a substantial
reduction in price does not readily lead to a
significant increase in consumption but to the
reduction of employment and because areas in which the
commodity is produced in substantial quantity do not
afford alternative employment opportunities for the
workers involved.
2. Determinations under this Article shall be made through the
Organization by consultation among the Members substantially
interested in the commodity concerned. E/PC/T/123
page 7
ARTICLE 54 (53)
ADDITIONAL PRINCIPLES GOVERNING COMMODITY CONTROL AGREEMENTS
Members shall adhere to the following principles governing
commodity control agreements in addition to those stated in
Article 51:
(a) such agreements shall be designed to assure the
availability of supplies adequate at all times for
world demand at reasonable prices, and, when
practicable, shall provide for measures designed
to expand world consumption of the commodity; *
(b) under such agreements, participating countries which
are largely interested in import of the
commodity concerned. shall, in determinations made
relating to substantive matters, have together a
voice equal to that of those largely interested in
obtaining export markets for the commodity, provided
that any country, which is largely interested in the
commodity but which does not fall precisely under
either of the above classes, shall have an appropriate
voice within such classes; **
(c) such agreements shall make appropriate provision to
afford increasing opportunities for satisfying
national consumption and world market requirements
from sources from which such requirements can be
supplied in the most effective and economic manner,
due regard being had to the need for preventing
Serious economic and social dislocation and to the
position of producing areas which may be suffering
from abnormal disabilities;
(d) participating countries shall formulate and adopt
programmes of domestic adjustment believed to be
adequate to ensure as much progress as practicable
within the time limits of the agreement towards
solution of the commodity problem.
* The provision contained in sub-paragraph (f) of Article 51
of the New York text has been transferred to this
sub-paragraph.
** Under sub-paragraph (b) it is intended:
(1) that there shall be no more than two groups of
countries within an agreement, and that the
principle of "equal voice" in substantive matters
shall apply as between them;
(ii) that countries which are large producers and
consumers of the commodity concerned, but which
are not large exporters or importer, shall have
an appropriate voice.
It is understood that any difference in a Commodity
Conference on voting arrangements may naturally be the
subject of an appeal to the Organization under Chapter VIII
(Article 86(2)). E/PC/T/123
page 8
ARTICLE 55 (54)
ADMINISTRATION OF COMMODITY CONTROL AGREEMENTS
1. Each commodity control agreement shall provide for
the establishment of a governing body, herein referred to
as a Commodity Council.
2. Each of the countries participating iln an agreement
sha.ll be entitled to have one representative on the
Commodity Council. These representatives alone shall have
the right to vote. Their voting power shall be determined
in such a way as to conform with the provisions of sub-paragraph
(b) of Article 54.
3. The Organization shall be entitled to appoint a non-
voting representative to each Commodity Council and may
invite any competent inter-governmental organization to
nominate a non-voting representative for appointment to a
Commodity Council.
4. Each Commodity Council shall have a non-voting chairman
who, if the Council so requests, shall be nominated by the
Organization.
5. The Secretariat of each Commodity Council shall be
appointed by the Council after consultation with the
Organization.
6.. Each Commodity Council shall adopt appropriate rules
of procedure and regulations regarding its activities,
provided that they are not found by the Organization to be
inconsistent with the principles and provisions of this
Chapter.
7. Each Commodity Council shall make periodic reports
to the Organization on the operation of the agreement which
it administers. In addition it shall make such special
reports as the Organization may specify or as the Council
itself considers to be of value to the Organization.
8. The expenses of a Commodity Council shall be borne by
the participating countries.
9. When an agreement is terminated, the Organization shall.
take charge of archives and statistical material of the
Commodity Council. E/PC/T/123
page 9
ARTICLE 56 (55)
PROVISION FOR INITIAL TERMS, REVIEW AND RENEWAL OF COMMODITY
CONTROL AGREEMENTS
1. Commodity control agreements shall be concluded for
a period of not more than five years, and any renewal shall
be for a period not exceeding five years. Such renewed
agreements shall conform to the provisions of this Chapter.
2. Periodically, at intervals no greater than threc years,
the Organization shall prepare and publish a review of the
operation of each agreement in the light of the principles
set forth in this Chapter. Moreover, a commodity control
agreement shall provide that if, in the opinion of the
Organization, its operation has failed substantially to
conform to the principles laid down in this Chapter,
participating countries shall revise the agreement to conform
to the principles, or shall terminate it.
3. Commodity control agreements shall include provision
governing the subject of withdrawalof any party.
ARTICLE 57 (56)
SETTLEMENT OF DISPUTES
Any question or difference concerning the interpretation
of the provisions of a commodity control agreement or arising
out of its operation shall be discussed originally by the
Commodity Council. If the question or difference cannot be
resolved by the Council under the terms of the agreement, it
shall be referred by the Council to the Commodity Commission
for examination and recommendation to the Executive Board.
The Executive Board shall then issue a ruling in pursuance
of the provisions of Article 86.
SECTION D - MISCELLANEOUS PROVISIONS
ARTICLE 58 (50)
RELATIONS WITH INTER-GOVERNMENTAL ORGANIZATIONS
With the abject of ensuring appropriate co-operation in
matters relating to inter-governmental commodity agreements,
any inter-governmental organization, which is deemed to be
competent by the Organization, such as the Food and Agriculture
Organisation, shall be entitled;
(a) to attend any Study Group or Commodity Conference;
(b) to ask that a study of a primary commodity be made;
(c) to submit to the Organization any relevant study
of a primary commodity, and, on the basis thereof,
to recommend to the Organization that further study
of the commodity be made or that a Commodity
Conference be convened. E/PC/T/123
page 10
ARTICLE 59 (57)
OBLIGATIONS OF MEMBERS REGARDING EXISTING AND PROPOSED
COMMODITY AGREEMENTS
1. Members shall transmit to the Organization the full
text of each inter-governmcntal commodity agreement in which
they are participating at the time of the coming into force
of their obligations under this Charter. Members shall also
transmit to the Organization appropriate information regarding
the formulation, provisions and operation of such agreements.
Members shall conform with the decisions made by the Organization
regarding their continued participation in any such inter-
governmental commodity agreement which, after review by the
Organization, shall have been found. to be inconsistent with the
intentions of this Chapter.
2. Members shall transmit to the Organization appropriate
information regarding any negotiations, looking to the
conclusion of an inter-governmental commodity agreement, in
which they are participating at the time of the coming into
force of their obligations under this Charter. Members shall
also conform with decisions made by the Organization regarding
their continued participation in any such negotiations. The
Organization may dispense with the requirement of a Study Group
or a Commodity Conference, if it finds them unnecessary in the
light of the negotiations.
ARTICLE 60 (60(2))
TERRITORIAL APPLICATION
For the purposes of this Chapter, the term "Members or
"non-Member" shall be taken to mean a Member or non-Member
of the Organization with its dependent territories. If a
Member or non-Member and its dependent territories form a
group, of which one or nore units Rre mainly interested In the
export of a commodity and one or more in the import of the
commodity, there may be either joint representation for all the
associated territories or, where it is so desired, separate
representation for the territories mainly interested in export
and separate representations for the territories mainly
interested in import. E/PC/T/123
page 11
ARTICLE 61 (59)
EXCEPTIONS TO PROVISIONS RELATING TO INTER-GOVERNMENTAL
COMMODITY AGREEMENTS
1. The provisions of Chapter VII shall not apply:
(a) to any bilateral agreement relating to the
purchase and sale of a commodity falling
under Section E of Chapter V;
(b) to any inter-governmental commodity agreement
Involving no more than one exporting country
and no more than one importing country, and not
covered by sub-paragraph (a) above, provided that
if, upon complaint of a non-participating Member,
the Organization finds that the interests of that
Member are seriously prejudiced by the agreement,
the agreement shall become subject to such provisions
of Chapter VII as the Organization may stipulate;
(c) to those provisions of inter-governmental commodity
agreements which appropriately relate to the
protection of public morale or of human, animal or
plant life or health; provided that such agreements
are not used to accomplish results inconsistent with
the objectives of Chepter VI or Chapter VII;
(d) to agreements relating to fissionable materials,
to the traffic in arms, ammunition and implements
of war and to such traffic in ether goods and
materials as is carried on for the purpose of
supplying a military establishment, or, in the time
of war or other emergency in international relations,
to the protection of the essential security interest
of a Member.*
2. The provisions of Articles 49 and 50 and of Section C of
Chapter VII shall not apply to inter-governmental commodity
agreements found by the Organizatton to relate solely to the
equitable distribution of commodities in short supply.
3. The provisions of Section C shall not apply to commodity
control agreements found by the Organization to relate solely
to the conservation of fisheries or wild life or other
exhaustible natural resources.
* A proposal has been made for the deletion of this sub-
paragraph in the light of an amendment to be considered by
Commission A regarding the exclusion of such agreements from
the whole Charter. The attention of Commission A has been
drawn to the relation of this amendment to sub-paragraph (d)
of Article 61. |
GATT Library | bs285yg7440 | Second session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Text of final note. Proposed by Delegation of United States of America | United Nations Economic and Social Council, September 23, 1947 | United Nations. Economic and Social Council | 23/09/1947 | official documents | E/PC/T/W/344 and E/PC/T/W/307-344 | https://exhibits.stanford.edu/gatt/catalog/bs285yg7440 | bs285yg7440_90050499.xml | GATT_155 | 14,955 | 91,252 | UNITED NATIONS NATIONS UNIES RESTRICTED
ECONOMIC CONSEIL E/PC/T/W/344
23 September 1947
AND ECONOMIQUE ORIGINAL: ENGLISH
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
TEXT OF FINAL NOTE
Proposed by Delegation of United States of America.
It is recognized that in the General Agreement on Tarifs
and Trade the contracting parties have made no commitments in
respect of trade of and with the areas under military occupation.
The question of the applicability of the Agreement to such areas
is reserved with a view to further study at an early date.
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE
DE LA CONFERENCE DU COMMERCE ET DE L 'EMPLOI
DE L' ORGANISATION DES NATIONS UNIES
TEXTE DE NOTE FINALE
proposé par la Délégation des Etats-Unis dAmérique.
est recennu que, dans l'Accord général sur les tariffs
douaniers et le commerce, les Parties Contractantes n'ont pris
aucun engagement en ce qui concerne les éhanges commerciaux dans
les territoires placés sous l'occupation militaire ou avec ces
territoires. La question de l'application éventuelle dudit Accord
à ces territoires est réservée en vue d'un examen ultérieur à une
date rapprochée.
23 septembre 1947 A.1.
UNITED NATIONS
ECONOMIC AND SOCIAL COUNCIL
PREPARATORY COMMITTEE
of the
INTERNATIONAL CONFERENCE ON TRADE AND EMPLOYMENT
Verbatin Report
of the
FIFTH-MEETING
PROCEDURES SUB-COMMITTEE
of
COMMITTEE II
held at
Church House, Westminster, S. W.l.
on
TEMPORARY CHAIRMAN: DR H C. COOBS (Australia)
(Verbatim Reports of the first four meetings of
Sub-Committee were not made).
(From the Shorthand Notes of
this
(From the Shortand Notes of
W. B. GURNEY, SONS & FUNNELL,
58, Victoria Street,
Westminster, S.W.I.)
Monday, 4th November, 1946
at
3. 0. p.m. E/PC/T/C.Il/PV.8
THE TEMPORARY CHAIRMAN (Dr Coorbs) (Australia): for Spcenkinbrink is
absent, or will at any rate be absent for part of this afternoon,
and therefore our first task is to select a substitute Chairman while
he is absent.
MR HAWKINS (USA): Mr Chairman, is there any reason why you should not
continue to serve?
THE TEMPORARY CHAIRMAN: I am in the hands of the Committee in this
matter. (Several Delegates indicated their wish for Dr Coobs to
take the Chair). Thank you.
(It was agreed that Coombs, act as Chairman during
the absence of Mr. Speekinbrink)
THE CHAIRMAN: I have been asked to make this announcement: in case dele
gates have not seen a notice whcih appeared in the Journal on Thursday,
performances of the films "Henry V' and "Brief Encounter" are being
given this afternoon and on Wednesday afternoon by the courtesy of the
J.R.Rank Organization Limited for members of Delegations and their
staffs. Tickets can be obtained from Miss Cunynghame-Robertson,
Room 511.
Now, I think that we were still discussing Article 8, para-
graph 2, when we finished our last meeting, and I think we had reached
the stage where it had been agreed that we could work on the existing
draft of paragraph 2 of, Article 8 in the United States Charter, and
that it could be accepted subject to the deletion of reference to the
dates there and the insertion of a phrase something to the following
effect: "Elimination of any preference in the ordinary import customs
duty which does not exceed a preference in force in any Member country
on a date to be agreed between on participating countries"- or words to
that effect. I think it was suggested that the precise wording should
be left for formal approval of the Committee after our newly-appointed
Rapporteur had had an opportunity to examine the draft.
MR ALAMILLA (Ciba): It was arranged that both Mr Hawkins and myself would
try, in the absence of the Rapporteur, to reach agreement on the wording.
2. E/PC/T/C.II/PV.8
and I am now in a position to report to the Committee.
THE CHAIRMAN: Have you got something to report upon that?
Mr HAWKINS (USA): Yes. I think the Cuban delegate was going to have it
distributed, but it does not seen to have arrived
MR ALAMILLA (Cuba):- No; I thought you were going to distribute it.
MR HAWKINS (USA): I would suggest that the Cuban delegate road from the
draft which he has which is very simple.
MR ALAMILLA (Cuba): Yes. I think you will be able to follow this draft.
THE CHAIRMAN: Read it sufficiently slowly for people to write it down, and
then I think that might save circulation
MR ALAMIKKA (Cuba): It reads: "The provisions of paragraph 1 of this
Article shall not be construed to require. the elimination of any prefer-
ence in the rate of ordinary import customs duty which does not exceed
the preference in force on dates to be agreed upon by the countries
concerned in reference to the preferences described in the following
sub-paragraphs; but such preferences shall be subject to processes
elimination pursuant to the provisions of Article 18."
B fols. E/PC/T/C.II/PV.8/W/5
THE CHAIRMAN: Has anybody any comment to make on that draft, as far as it
goes?
MR SHACKLE (United Kingdon): It is the mention of "ordinary import customs
duty", In paragraph 1 the reference is to "customs duties and charges of
any kind imposed on or in connection with importation". I think the
wording of this in paragraph 2 should be the same as the wording in paragraph
1. If this is not done, it will mean that certain charges on impertation
which are not called customs duties would not automatically eliminate that
negotiation. I suggest that we make the wording of paragraph 2 the same
as that in paragraph 1, so that instead of, "ordinary import customs duty",
it would read "customs and other charges on importation".
THE CHAIRMAN: Is that all right?
MR HAWKINS (U.S.A.) That is all right.
THE CHAIRMAN: Has anybody else any comment., or can we accept that?
MR McKINNON (Canada): I think that probably it is difficult for us sometimes
to keep in mind that we are drafting here an international instrument of a
constitutional nature, which does not come into force, will not come into
force and cannot come into force until after the tariff negotiations referred
to in Article 18 have been undertaken and completed.
One of the difficulties ve have been faced with from the start (and
this is in no way a criticism of the American draft, but I have to refer to
it by way of explanatition)in devising an appropriate paragraph here was that
the American original draft had in the dates of July lst, 1939 and July lst,
1946 -- dates which in themselves might not appear appropriate at all in a
document of the type we are trying to make in this Charter. Por that reason,
we have been attempting a draft, and not by way of criticism of the draft
read by the Cuban Delegate at all, but possibly because it is even simpler
and may get away from the lack of appropriateness to which I have referred in a
document of that character, in the Charter; and I would like to read it;
I need not read it slowly, because it is so short: "The provisions of
paragraph one of this Article shall not be construed to require the elimination
of any preferences in respect of import customs duties and charges" -- and
4. B.2. E/PC/T/C.II/PW.8 there I meet Mr Shackle's point -- "Which do not exceed the preferences
remaining after the negotiations contemplated in Article 18", and then going
on in the manner set forth in subparagraphs a. and b.
May I just add this, that the very excellent draft suggested by the
Cuban Delegate still has reference to dates -- an oblique reference: "on dates
to be agreed upon by the countries concerned". By the time the Charter is a
Charter and comes into force, the tariff negotiations will have been
completed and there will be an ambiguity about a phase lice that; whereas
under the draft wording I have just read, it simply says; "in respect of
preferences remaining after the negotiations contemplated in Article 18".
I would like to submit that, not by my of a new motion, but by way of a
slight amendment to the one which has just been read by the Cuban Delegate,
MR HAWKINS (U.S.A): As I understand it; the approach is somewhat similar
to the one taken by Mr Shackle in his draft, his purpose being, as I under-
stood it, to save from extermination by the most-favoured-nation clause
any preference which might remain after the negotiations had taken place; it
is the same idea. I think there is a good, deal to be said for it.
If we look at the time-table, the negotiations will take place next year;
the Charter will not come into force until 1948. Then the Charter came
before the international meeting it would purport to be thesame: those
preferences remaining aIter the negotiations. I think there is a good deal
in the point that this.'is a Charter. It may bc that perhaps atl'this point wo
have got more procedure into the basic instrument than we ought to have, and
ott-hand I would be inclined to think that that might meet our problem.
THE CHAIRMAN: It seems to me that there are two points: one is the problems of
the date, ehich is really a problem of procedure; and then there ie the
.question of saving the preferences vihich survive negotiations. It seems to me
thât if we could agree on a draft substantially along the lines suggested by
Mr MeKinnon, and at the same time record a decision or recommendation in our
functions as a sub-committeeon procedure that in the negotiations the dates
to which preferences to be negotiated shall roter are to be a matter to bc
agreed on by the countries concerned, then we would have dealt with that
5. B.3. E/PC/T/C.II/PV.8/
question and recorded our view on it as a matter of procedure, and at the same
time we would have -in the Charter what is appropriate fo'r the Charter itself
MR ADARKAR (India): I was going to say very much the same thing. I have
nothing more to add, to what Mr Hawkins has said. I would' only say that the
Indian Delegation would prefer the formula suggested by Mr MoKinnon.
THE CHAIRMAN: I think that meets the Cuban and Chilean Delegates' points
quite satistactorily, does not it?
MR VIDELA (Chile) Yes.
MR ALAMILLA (Cuba) Yes.
THE CHAIRMAN: I think we can take it that Mr McKinnonis draft is agreed, and
that we do record a recommendation that the question of the dates to which
preferences shall refer shall be dates to be agreed upon by the interested
parties, as part of the negotiations,
MR ALAMILLA (Cuba): Just before we come to paragraph a. I just want to record
the fact that Cuba has presented one amendment to delete all this last part of
paragraph 2, to which we have agreed in this paragraph, but we agree that
because we have been considering the possibility of putting out amendment in
Article 18 instead of article 8, merely in order to go more in the way that
.the Charter is drafted because we want to save our position: in case we
do not get :in Article 18 what our object was in presenting this amendment, which
is connected with another cne, we will bring this point in reference to,
Article 8.
THE CHAIRMAN: I think that is quite clear all Delegates must reserve the right
to return to a matter dealt with, if, in theïr opinion, the way subsequent
matters are decided-makes it necessary. So that I think that anything we
agree to is a tentative agreement subject to the whole being satisfactory, We pass now to the question of the exception of the clasess E/PC/T/C.II/PV.8
of preferences that, will so to speak, be given an opportunity
to survive the, negotiations, and here I think the main point at
issue is whether this list should be extended to cover other
exostomg preferences as well as those listed here Have any
comments to make on this at this stage?
SENOR DON HUMBERTO VIDELA: (Chile) : Mr, Chairman, I would just
point out that I understood that what we have accepted f rom the
Canada draft is that part which is substituted for those
which do not exist at present in force but that the rest of the
paragraph was drafted in order to leave open the possibility
that as we come along in the discussion some other point may
be raised as to what is left as it was in our original draft,
which says: "In reforence to the preferences described in the
following sub"-paragraph. Therefore, that does not make it
obligatory for us to take exactly the point of how many we are
going to put, We will come to paragraph (a) discuss that and
I think that, is going to take a long time then we will come to
paragraph (b); and then whoever wishes to in the course of the
discussion can dissent,
THE CHAIRMAN: Yes, I understand. that point It may, of course,. be
possible to attain some wording which would more general and
would cover not only (a) and (b), but any other which you would
wish to.
SENOR DON HUMBERTO VIDELA (Chile) Yes, we have this already in
our draft; it says "In reference to the preferences. described
in the following sub-paragraph"- That is what I wanted to have
over our old draf here; so that we do not have to discuss at
this moment how many there are going to be.
Mr McKINNON (Canada); We discusses now paragraph (a) In reading
my draft I said I was not going on to deal (a) and (b) below;
I. was merely reading the substantive headings, so to speak, of the,
THE CHAIRMAN: I take it the Chilean delegate point could be
embodied in your draft E/PC/T/C.II/PV.8
Mr HARRY HAWKINS (USA): Mr Chiarman, I was about to suggest that
we do have point (c) to consider, .and to remind you that the
Chilean delegate had a point (c) to add, and I had an amendment
on it; but in view of what has just been said,. I think it would
be better first to consider the wording of paragraph (a). I
think it is only a question of wording to describe in more
appropriate terms what we were trying to describe and did not
quite succeed in doing. I think we might look at the wording
of paragraph (a) and get a description to cover the same ground
and yet fit the particular circumstances of the British Empire,
for example, a littIe better than our draft.
THE CHAIRMAN: There is just one matter I should like to dispose
of. I understood that one oa the possibilities was that pref-
erences to be the subject of negotiation might be extended to
Include all existing preferences, or, alternatively, all exist-
ing operating preferences, the differenco there being that in
the first casa you might include some preferential arrangements
for which legislative authority existed but which did not
operate. The second one would be general also, but would
Include those for which legislatIve authority. existed but whlch
were also operating, Now, it seems to me it becomes necessary
only to list parti-cular preferences if those two alternatives
are not acceptable, We could .dispose of those two first, and
then it would be quite clear that we would not be adding to the
list if we in effect cane to the same conclusion,
Mr HARRY HAWKINS (USA): Mr Chairman, there is a point of considerable
substance, I would not favour, for example, anything as broad
as an exception to cover all existing preferences, even though.
they are actually in force. Certainly I would not favour including
preferences not in existence but only provided for. 1 had a
formula which I was proposing as an alternative for a specific
exception of the Chilean delegate whJlch would describe the sort
of preferences which were to be provided for here and made subject
8. PAE C-3 E/PC/T/C.II/PV.8
of negotiation, and I will offer that at what you think is the
appropriate point but in fairness to my Chilean colleague I
think he ought to have an opportunity to put his exception first,
I believe he has an exception to be included In (c).
THE CHAIRMAN: Would your description cover (a) and (b)?
MR. HARRY HAWKINS (USA).: No. It would cover long-standing pref-
erences in force and materially affecting the economies of the
countries concerned and there is a litle argument I would
like to make on that point at tho appropriate time
THE CHAIRMAN: In that case perhaps we had better switch back and
take (a) and. (b), and then go on further Could we suggest
what we are going to do? I suggest we take (a)
Mr SHACKLE (UK): Mr Chairman, on paragraph (a) I have point
which is really only a point of draft ting: that is that the
yariety of constitutional situations which arise in the Common
wealth cannot be covered by the form of words which is here
wri-tten into the draft Charter, I think we should need some form
of schedule. I have suggested a form of schedule in a paper
already distributed, which Is 2/10. I think that .is the kind
of method whIch we should have to adopt, and that would be
simpler,
THE CHAIRHAN: Would you suggest substi-tutingI for (a) preferences
i-n force excluslvely between the territories listed In
schedule ?
Mr SHACKLE,(UK): In one of the scheduIes*
THE CHAIEMANI Thon would you continue: "Each Membor to whIch thls
provision apples shall provide a lst of such terrltorles in
respect of which preferences were in force on the dateagreed,
Lists incorporated and annexed.to this Charter"?
Mr SHACKLE (UK): Yes :
Mr McKINNON (Canada); Mr Chairman, when we first got Mr Shackle's
suggestIon in paper 2/10 to whIch ho referred, I thought there.
9. PAE
C-4
E/PC/T/C.II/PV.8
was probably great merit in listing individually all the
countries named by by Shackle in that draft included in the
British Commonwealth On the other hand, if we proceed from
taken on to list all the other known or ascertanable preferen-
tial regimes, it seems to me we are going to run into a very
lengthy list naming individual countries or areas within cert-
tain sovereignties; and it has bothered me from the start that
as far as this small Committee is concerned, we are faced with
the practical reality that we just do not know. For that reason
we have been attempting a re-draft of the American Charter
proposal (a), and, keeping in mind the point Mr Shackle has raised
of a variety of constitutional situations, we had a very minor
amendment of that draft, which would make it read as follows
"(a) Preferences in force exclusively between territories com-
prising until July 1st, 1939, a Commonwealth of Nations or
in respect of which there exiested on that date common sovereignty
or relations of protection or suzerainty"; and then running
on as before,
10. Dl E/PC/T/C.II/PV.8/
Would Mr Shackle considerr that that wording would meet his
point and obviate the necessity of listing separate. things?
MR SHACKLE (U.K.): I should hope it might, but I am not able to
give you an answer here and now. It would have to be gene into
first.
MR LECUYER (France) Interpretation): Mr Chairman, I wonder whether
.the text of the United Kingdom delegation is consistent with the
. new drafting of Article 8 which we have .just adopted. We have
just decided that we should not mention any date, and this text
is based on a date. Moreover, it is stated there this not only
countries should be listed but also items of goods, and it has
been said that those items would be fixed by tariff discussions.
I go further than the Canadiar delegate. He feared that it might
be difficult to include a list 'of countries, but I am very much
afraid it will be difficult to add a list of items of goods to
this Charter.
MR SCACKLE (U.K.): On that I would say that my intention in
suggesting (b) of my redraft, reference to actual items, was that
the tariff agreements which might be negotiated would be scheduled,
as they were concluded, to the charter, so that you would not have
a special enumeration of items. As regards the point about. the
description of the Commonwealth of Nations, I think the whole
point is whether the simple use of the words "Commonwealth of
Nations" can be regarded as satisfactorily covering the case. As
I said just now,, I should certainly hope that it might do so -
it would save a great deal of complication -but I do not think
one can say here and now whether it would be entirely satisfactory
for that purpose. It might very well he so.
THE CHAIRMAN-: We are having the Canadian alternative draft typed out,
and while we are' waiting for that could we leave item(a) and
pass on to consider (b)? We can come back tn(a) when the revised
draft has been distributed.
MR ALAMILLA (Cuba): The Cubani delegation is quite satisfied with the
drafting of 'paragraph (b).
11. D2 E/PC/T/C.II/.PV.8
THE CHAIRMAN: Does anyone .wish to comment on (b)?
MR VIDELA (Chile): I would like to say that, in accordance
with various agreements made between Chile and other
countries - for instance, with Cuba in 1937 and with
United States in 1938 - we have recognised preferences..
Later on I will explain how these agreements came ta be
negotiated. Subject to the position I made clear the
other day, I am quite agreeable to accept (b).
THE CHAIRMAN: Does anybody else wish to comment on (b)?
If not, I suggest we take (b) as approved and pass on to
a consideration of any additional sub-clauses which countries
may wish. to submit. I understand that the Chilean delegate
has a suggestion to put forward for an additional sub-clause.
MR VIDELA (Chile): You have bef ore you the proposal of the
Chilean delegation to amend paragraph 2 of Atrticle 8 by
having a new item, (c), which would read as follows;
"Preferences in force between neighbouring countries",
As I explained the other day, we have a common ancestry
with certain other countries, and common interested, and
* traditional preferences. Many of them originated in the
period when my country was fighting for more ample preference,
a doctrine known as the Doctrine Bello, which was extended
to all the Latin American countries. In 1897 we. had a
convention with Japan, where Chile reserved, preference to.
the Latin American nations and Japan to any independent
state of Asia. With Italy we had an agreement in 1898.
in which we gave preference to Central and South American
countries. In 1899, in our agreement with Denmerk, that
country reserved preference te the Soandinavian countries
and Chile to Central and South America. With Norway, in
1927, the Norwegians reserved preference to Iceland, and
Chilex reserved preference te the Latin American countries.
With Egype in 1930 preferent was reserved by them to the
Sudan and by Chile to her neighbouring countries. In our D3 E/PC/T/C.II/PV.8
convention with Sweden in 1930 they reserved preference to
Denmark and Norway,. and Chile. to South America. With Belgium
in 1936 preference was reserved by them to their neighbouring
countries. With Ecuador in .1930 preference. was reserved to
the neighbouring countries. Then in 1937 Cuba reserved
preference to the United States and Chile to her neighbour-
ing countries. Then in 1938, with the United States, they
reserved preference, to Cuba, the Panama Canal. Zone, the
Philippine Islands, and Chile to the neighbouring countries.
With Brazil in 1943 preference was reserved by both countries
to their neighbours, in an exclusive form. In the convention
with Canada in, I think, 1941 - I have not the date here -
preference was reserved by them to the British Empire.and
by Chile to the Argentine Bolivia and Peru In the con-
vention just signed wïth France, op the 10th September 1946,
she reserves preference to her. colonies, protectorates and
territories, and Chile to her neighbouring countries.
We have now under consideration a draft agreement with
the United States, more or less on the same terms as those
to whichI have already referred. I mentioned also the
other day the General Convention at the Pan-American.
Conference at Montevideo in 1933. I would like also to
inform you that in our convention with Peru in 1941 the
preference is exclusive. I have a text here in Spanish,
so what I read out now will be a translation of it,
13. E/PQ/T/C. II,/PV.8
"The componsation of concessions whcih Chile and Peru are rivinr by
the prcscret agreement wvith the object of cnccuraCinz ard intensifying
trade between both countries exclude concessions concerned with the
SenDral clause on nost-fa.voured-nation trentriient that one or other
country may agree upon with other nations." As an ex=ralze we might
quote the agreerment between Eranco anL Chilo oP thc 10th September in
which is incorporated the followiing clause: '"Tho agreement formulated
in the present convention, Irafter refering to the most-favoured-nation
clause, "sh.al h ave the following exceptions: (a) âzvantages aî,rccd
on at present are those which Chile might agree afterwards with
borderinE nations; (b) the advcintaies that right arisd from tIa Cixttons
Union already established, or which may be established. in the future,
bY o~ne of the parties; (c) the advzntages accorded, or which moy be
accorded, withl the colonies, protectorates or mnondated territorie s of
the French Union; (d) the advaitcages agreed, or vhich mnoy be. reed
- upon, by one or two si-ninm parties to facilitate traffic wvrith border-
inM nations vwithin a zone which is not to exceed fifteen kilometers.-
on either side of the border." Here you can sec, Mr Chairman, are
included all porDanent and temporary prefeorancas. I do not think it
is necessary to real the general convention of Montevidoo, but if it
is necessary I have a translation here which I could hand to you.-
Therefore, having read out this list to you, I think you will be able
to see, Sir, that it is not a question of one or tro conventions. Wo
have sixteen conventions in force. I ask you to consider all the remarks
I have made on these points and te accept tho Chilomt proposal.
MR HAWKINS (USA): I should. like to say that I do not ne.c zippose tho ar.iend-
ment proposed by the-Cii0lenn delegate. Therc arc, however, a number of
considerations which I would like to put beforo the Conmiittee, to see
what-the reaction is in connection with the proposed amendment. 'n the
first place, it *is necessary to consider the nature of the preferences
pxMvided for in paraZraphs . and B. They have certain characteristics:
they are of long-standing ane they have afected in an important de .ree
14.. E4/pT C. II/PV. 8..
-the-economies of .the countries. concerned. Nov<, in an ideal vo;rld it
would be desirable,with one stroke of the open,to abolish cilprefer-
onces' but in La practicol world that cannot -be donc where you have
proferonces of the kin. described in anda paragraph a and B, nanely lonrg-
standLigc, Well groupcd, and C ffcting to a vezy material degree the
econord.es cf the countries concerned. Consequently, it has been
accepted for purposes of nerZjtictiàn, -in the process of which those
: countries whôse economies would le seriously disturbed if they were
. abolished unilaterally, con got con.pnsation, or, in the long ri-n èer-
I -_ps more th, rn compensation in the forim cf reduced tariffs andl the
giving up of frontier restrictions with o thor countries. Now, that
* beir iour aim atleast, I begin to ,,et a little nervous.every time a
suggestion'is madce for additions, because if we added all preferences
that might be thought of you miLht g&t a very lonS list and perjpetuate
a Zood iony:preforences vhich vrould not have the effect provided for
*in paragraphs A avr B. The alternative to the Chiloan delegate's
e.,ceptions which I outlined in the full Comi;ni.ttee would be something
of this sort (this wbuld be paragraph C): "Preferences.of long standing
: in force and affeotihg in important derrce the economies of tlie coun-
tries concerned4 those preferences, however, to be épecified." ow
that calls for just one or twe remarks on the nature of what we are
doing, as I.understand it, The report of the Preparatory Committee
will bonea gendrrl report %vith instructions to a drafting comittoe and
on annexed draft which would merely be put in to assist the draft ting
committee. If an exception such as I have just proposed Nmre pult in
now and irefnrred t. o.a drafting, committee later on, . z'of ter it had then
examined any preferences which would fit that general description, I
think then you would have a better chance of gettiug exoeptLons simUlar
to those included in paraaraphs , and B. Noir, as I said at the outset, I
de net oppose the Chilean exceptionas phrasedi but before Lt is adopted I
would like the Conmittee. to consider the points I have jut put f oiward
-i~ see how Lt feels bout them If. the ConiLttee .thinks the exce tion as
phrased ly the Chilean delegate iL satisfactoy, having tokex account.
cf the..considerations I have mentioned, then it Ls acceptable t mae.
15. THE CHAIRMAN: You have. two alternatives in front of you: tho Lirst, submittod.
by the Chi1ean'Delcgato ,reads as follows:
"c. Preforences in force between the neighbouring countries".
The alternative submitted by the United Stntes Delegate roads as' f'ollos:
"c. Preferences of long standing in forco anxd affecting in f
considerable degree. the economics of thc countries concerned".
The United States Delegate has drawn attentions to the fact that if hie
alternative is adopted. -it differs in a significant way from the Chilean
* Delegate s proposal, briefly, in that the ones which would be covered by the
Chilean Delegateles proposal would be dctci.rÂod as a natter o factt, whereas in
the United States proposal it would be a matter of judgment and it would-
therefore be necessary to have submissions iiade and examined bysome appropriate
authority, presumably. .re there any. comnents on these trio alternatives?
ER VIDEU. (Chile): I am glad to offer to the Sub-Committee all my help in order
to arrive a.t a satistactory- conclusion. On the other hand, I would. like to
answer the United States Delegate. It is a question of' opinion, but I wvould
like to point out very strongly that in this matter I should like to see
discussion on the same level. I think a sovereign State 'has its own right to
consider whether it is important or not, and I do not.. see why we should make a
reservation or -a condition to the preferences asked by my Government if that
condition does not apply to the other preferences. T*herofore, if there is
anything conditional, I shall have it until. the last. moment when we have
arrived at the approval of' the list of preferences, when we ay say-what we like.
That -is one point. :
IAnother point concerns: the amendimnt suggested by the Unitod States
Delegate; in which he mentioned tho phrase "long standing". I do not knMw,
whether that will. cover the position of Chile, because the preforenoes
accorded. betWeen Chile and Peru werc signed on the iOth October, 1941. If we
* aey long standing", I do not. think that will rrafcr to the convention already
in force -ith Peru. That is the reason why I prefer the wording of the Chilean
suggestion _- because ïi is in force. I viiLi back my argument with s very
serious matter: às. France on the 10th Soptember last bas negotiated and put
16, on the same level the preferences accorded to the territorios and colonies-
unaer her Mandate, and the Chilean preferences have been accorded to the
neighbouring ,countries', ,why are we not here accepting, the fact? Why are we
are
here putting conditions, or leaving it to another body-to consider whether they
are interested or important? I think we rust- agrec that the Chilean Government,
hls the right -to negotiate preferences, and this ,has already been done -not only
-with France, but with.other countries. Por instance, I have just sa.id.that
we are negotiating now with ,the United. States a preference, and we had a.
convç n1ion in 1938. It is-not a question of giving' anything ta Chie; it i9 a
question of negotiatiAc. with Chile. I vwiIl repeat the words I.usec. the other
day: ".e'are willing t -accept the pretorances in a. and b.u provided they
a.cept Qur preterencès -- nothing less andc nothing morc.
iR McXINNON (Canada): If we wore to take the amendment to the cause sucli as
the Chilean Delegate suggests, as 3, would not it permit (I have.'aforgotten the
exact wording of it) any two bordering countries in the world, between now and
-the date-of the negotiations, toinstitute a preferential regime bet*eén them, and
in 'so doing, to do this in any wvay in vrhich th¢y care to'achieve that'ënd?''
ER ArIALA (Cuba): I can sce perfectly veill the position taken by têe '
Canadian Dolegate, because I believe that if ve put this clause Just'as the
Chiiean Delegate has proposed it, it vwill leave it open to'make some'
other arrangements in'the future. Prom the listeof these convention.'whioh
the Chilean Delegaâte has named, I gather that the'la'st of thcse preterédntital.
treatments betweenneighbouring countries was signed on October 1Oth, 1941,
and that ail the other treatments to which he has referred (those wlih the
nited States and with ali the other countries)'are only recognising the
existence o. these'preterences that are in this contract or eocumént'signed
on October lOth, 1914. If!'the proposal of the Chilean Delegation diâd' no` t
exist, I would lice to accept thie proposition of the United States-, se
I believe that -ours is of 1èng-standing and 1S absolutely .I aamentia: or tey
existene of Ouba from the commercial point ost viwv of the Republic . r
. . : - ;- . PAE
'E/PC/T/C II/V
But I would .try to moet in the middle the difficulty in order
-to eave.:the p6siti-on- o0 the Cahjlean deogcato - Jit>rhe Comriitteo
;..; will accept it, just by saying: 'preuérentlai treatment
between:nèightourlng .countries signed before Oct'oer 31ist,
. 194V!I, wh-tlch.would ab e:t put a stô a to the future ones;
and then-I. woùild a}se propose tha t-th6y subject be subject to
the condition th1at they affect to an important delgreeg the
- economy of thescontractIng country es, as Ido not. doubt that that
* this one affects veal.ty the economy of Ohile I-ncaà fundaxnental
way, If'iotj they.woild not be d1soussing and flihtIng for
them as they are in this Comralittee, I wouldîIkèe tdo iead i-t
just as. I'- have it drafted hérei "Preference treàtrnent between
neighbouring countries signed before October 31st, 1941, and
which-would a'afect i-n liortant degt'ee th' economy oLthe con-
t rvdting, countries', :
SENOR DON1 HUFBRTO VIDELA -(Chile): aIr Chairmani,. I do not want te
go on with this di-ocussi-on; I would like, to finish it, because,.
after ail, it is not the rnost important thInS here; but I am
agreeable and I very much thanks ny colleaBueethe Ouban delegate
for hi-s suÈgestlonf but I want-to explai-n that when'we'drafted
this proposal'we put In the worcla "1in rfoece11belause we assumed
that we are here making & general princi-ple applying to dl-f f
erent countries,"- Thérefore I could not ptt 'here the-date
of the lait âoonventlon, Th&t date' would not' apply 'tà oher'
countri-es, I supposé the leittr (a) is applyi-png to France,
Poland and dmferent countries asvwell as Great Brtai-n, and ;
..thls i- the main reason why I only put in "in: rfe'1j but I am
quite aoceptîng the suggestion of h0 Cuban del eate in connmc-:
ti-on w1th the date of the lbst cofiVention -e heve signed on that
matter, The other point I wanted tQ discuss le the last para-
graph suggested by the Ouban delegate. As I-o6ald before, I
think we ought to be on the samne level as the other preferences,
and I should not agree to add those words lion conditions unless
this condition would be put coverIng the three, four or flive
.18. . - preferences we have agreed. here* I thi.nk that l6 quite olear,
Mr. Chairman,'perhaps it willl clear the matter if' we change the
wording and say: "-Chile and neighbaourïng counteresil instead of
ref errl.ng to general pri-nciple. Then we can put tie last date ofa
our convention, But it is for the Committee to make the altera-
` tion, I could not .i'er.that alternative, because I think it is
a question of principle we are hara study Ing; but it is just up to
you, Sir, to decide whether th3 s wi-ll apply only to Chile, and
. then make the alteration and say "Oh.-le and nei-lgbourlhg countries'1,
tkhe convention si-gned on thie 31st October- 1941,,,
THE-CHAIRMAN:. Gentlemen, it seeres to rme that there are. two alter-
natives. I understand f romr what Ktr Hawkii-s said -(I hope I ami
'InterpretIng correctly) that hd was prepareci s9 far as the part-
icular preferences to which.the Chilean delegate i- referriningi..to
regard thom as bing- subject to negotiation. At the -same tlme
he felt that' it was perhaps undesirable to have an addiltlonàl'
exception, (c), whi-ch opened the door very widely to possibly
other preferences about which we are not aware at' the moment bu t
whîch may not i-n fact be of the same kind as tho ones covered b: y
(a) and (b) and the Chllcan pref erences. That 'I understood to
be his me.an objectlon to a phraseology as broad as ls. suggested
by the'Chilean draft itself, At the same time, I do feel thalz
as.far. as the preferences i-n which the Chilean delegates i>arU-
i-cularly Interested, there i- a good deal in his contention tha t
conditions which are going te.be applied to them should be.
quite reasonably apphiedto others covered by (a) and (b),. I feel
thére ls a good deal ln that, It seems to me we might do.one or.
two thIngs: either accept 1i;r Hawki-nsl suggestion with the undex-'
standing that the Chilean preferences referred to by the Chilean
delegate would bs takon to conform to those requirements In the
se-Ue way as the ones ln (a) and (b) are taken to conform, That
would, however, leave it possible for same examination to be made
Of :Euture c ubmls; onr .;hlch mJght'be made on this by other
19* E/PC/T/G .II/PV.8
countries, Altbrnati vely; iI we do not th'nk the danger of Cother
producing
countri.es/hIth rto uni1oard-of preferences to be a v ery serious
one, it seenis to me ie. could without much diCufSi-culty accept the.
Ohl.e1an dratt with perhaps the inclusino of. a date after the
words !"i;nforce", in f'orte art some date. I do not-myself like
the suggestion that we-take the date -of the last Chilean conven-
tion, because thare may be others which could properly be
included; but I thlnk it 1-s necessary to avold, thie danger to whi-ch
iM'Mr EàoKinnon has referred of now pref'erentJal arrangements being
made. So that I thInk a suitable change woulCd be to say:.
preferences. i-n force in June 1936, or soma date v!h.ch i-s past but
not very far past, What do you fe1l about .1 t, l-r ii4,wkins? Do
-you feel that the dangers of other preferential arrangements being
brought In under (c) i-s a sufficiently serl-ous one to adhere
to your clause, or would you thJ rnk that
Mr H.ARY HAWKINS (USA): Mir Che rrnman, I ;vould accept the Ouban
delegatIon's solution, or, If the one .I offered were taeen; the
Ohllean delegate could easily protect hs liositi.on by making his
assent subject to the reservation that the 1hi1leàn preferences
are Included, Elither one I think would take care of itt,. The
Guban delegations proposal scems tome to be all r5eht,.
THE CHAIPMAN: Unless you have the seamoereservatlon, Jt i-s subject
'to the crlticiem whi-oh theChi.lean delegatonon w1ade that it
appears to-subject certain preferences to the standard whi.lst
-:others are apparently exempt from the standard, although, as .lr
Hawkins has poInted out, his standard is lierJved from tho prof-
.orences exlstlhg under (a) and (b); but there i- an apparent
. formal differentiation which I catn understand is not necessarily
very acceptable.
20. H . 1 X E/Pc/T/C .I I/Pv;8
MR Afi.RKAR (IndiI): Mr Chairmnan, when wo are almost in sight
of the smlu1tion of the problem raised by'the Chilean
delegate, may I briefly state the positi-n of the Indian
delegation in regard ti prefrences batween. neighbouring
countries& in order tc seü whether such preferences could be
in some way recognised in the particular exception we are
now considering, or whether a separate exception will have
to be proviced-for the purpose. The formula suggested
by Mr Hawkins, namely, preferences between neighboring
countries which are of long standing and a `ect tc an
important degree the economies of the countries concerned
would certainly take care of the sort of preferences which
exist between India and Burma, but the Indian. delegation
feels that an important question of principle',is' involved.
These preferences would certainly be saved by the adoption
of thieparticular formula, but this Ils subject t'o-the
process of elimination which ontemplated in Articiel18.
It seems to me utterly unrealistic tD assume that
which
preferences/exist.between countries like .In.dia and.Burma
could ever be eliminated. These preferences rest on certain
permanent geogrpphicand econimip considerations. Burma,
as I said on Saturday, was part of India uhtil 1937, and the
preferences exchangc-d between the two countries have their
origin in. long standing economic and historical considera-
jions. These preferences may be subject to negotiation, but
- it should be recognisea that they will fc'rm a more or less
permanent feature of the import tariffs of the two countries.
* That is'one diffïiulty. The other difficult is that,
although so far a's the neighboring countries are concerned
: -India i's'at present giving preferences only to Burma'and
Ceylon. and other countries within the Commonwealth, it is
quite conceivable that in future India may ha-ve to give'
preferences to certain other noighbouring countries. There
preferences to certain H.2 E/PG/T/O. Il/PV;B../
are certain small countries on the frontiers of India,
and these' countries a.iay like to industrialise themselves.
It is quite possible 'or India to absorb: the whole f- the
.rtput cf the industries located in those countries. Afly
preferences given by India tothose countries will therefore
be completely effective in the sense that they will accord
very powerful protection to the industries located in those
small territories. Iniia i8 a natural market for those
àcuntries and India is alsrj very sympathetic. to their indus-
trial aspirations. Such preférence s` should be allowed to pome
into existence in future and should" be recognised as morer or
less permanent exceptions to the most favoured.lnati-n elase.
There are two ways of' loking at this-.probler_.. Supposing
we amend this exception (c) to read,. "Pref'érances accorded
by a member country tn.neighbouring countries", it would take
acoccunt of future preferences; it would also make such
, ' preferenices sub.Jeet ti negotintion. On the other hand, a
further.amendiment will also be necessary, namely, to describe
. the process. contemplated in Articlel, 18 as. not one of eliminatt:
:0' preferences but, reduction or elimination. These two
* ; amendments. will have the e fect oe permittingprefrrenoes
* between neighbouring countries to ,comeinto existence in
future, making'such preferences subject to negotiation, and
* thirdly recognising the fact that suoh preferences need not
be eventually eliminated. altogether.
* .There i8 another way of. tackling this problem, namely,
te.make an amezudnent ïn Article-339 "Territorial Application,
oustom6 Unions and Prontier Traf'fic", by, providing ii.ere in
paragraph 2- -of Article 33 that the provisions of Chapter IV
: shall not be construed to prevent the granting of preferences
in respect of import duties or charges by any-member country
:`to neighbouring countries. An amendment of this kind would
be quite acceptable. ti the Indian delegation because it. would
save the preferences of the sert which I mentioned. It would
22. H.3 ` E/PC/T/C.II/PW8
permit new preferences of the same sort to. come into
existence. But it has one serious disacvantage, namely.
that it will put those preferences beyond the scope of
ngotiation. It seems a pity that for a mere draf ting
convenience we shoulcl place these preferences outside the
scope of negotiation. The point oa the Indian delegation
is that thèse preferences should be recognised, that it is
unrealistic to propose their eventual elimination, because
that ignores the fundamental geographical and economic
factors on which they depend; but, while recognizing them,
they should also be subject to negotiation. When they
affect the interests of other countries thère should be
consultation aric bargaining, and, lifelimination: is possible,
elimination. That is ail I wish to do at this stage - to
put forward. those two alternatives.
THE CHAIRMAN: I would like to suggest to the delegate for
India that we .eave the question of new and permanent
preferential arrangements. .I feel it would confuse the
issue here. It i.s a matter af considerable importance in
principle, and I think it would be wiser to deal with it in.
that way rather than in an Article which is. designed for a
diffe-rent purpose..
MR ADARKAR (India):. Mr.Chairman, do I understand that the
point raised by the Indin delegation Would be discussed
later in connection with Article 8 or in connection with
some other Article?
THE CHAIRMAN: I think myself that it needs to be discussed in
connection with Article 8,or possibly (I am not quite: sure
about this) the question could be taken with Artclie 33, which
deals at present only with Oustome Unïins!...
MR ADARKAR (India): Article 33, paragraph h2, deals wïth points
whioli are outside the scope of negotiationsalatogether. If
ofa course itïis the desire of the Committee that preéerenrces
of that sort should be outside the scope of negotiations
.23. I.1
3E/PC/T/O. II/PV; 8
altogether it vould suit the Indian delegation very well, but I t'tink it
- would nottake account of the viider considerations.
THE CHAIRMAN:i do net think it vould be irVossilc to.ldeci with it in
a way that would WOULD it subject te negotiation. I Ledl it -iould, con-
fuse the issue here at the moment whon -e.havo ta deaJl vnith a particular
problem.
1IR ADARKAR(India): If it is desired by the Comnittee thc.t it should not
bc discussed in connoction with Article 8, or if th-t is the ovontual
docision of the Cornzitteo, then I surest that the point raised by me
sh.mld at lcast bo oentioncd in the re.ort of thc sub-ccrmmitteo in
ordor to cnsure thnt that will bo considorod by thç Coriittec deciiina
- vith .Artiole 33.
THE CHAIRMAN: I quite definitely think it is a natter f orc this sul-
cor=nttoe ta deal with.
R S}IACKME (UK): l.{r Chairman, I have one suggestion te mnlcc in roforonce
to Y;hat theIndian delegate has just said. It seoms to rm' that as
records p-.)references between India *cnd Burma W: ; would be taken into
account, vould they not, by the suggestion alreacly mado by the Coaadian
delegoate, which I think vre have more or lessclrody aclodeted. That,
it seems te ria, then leaves us with the question cf the possible need
te have preferentialarramgementswith some of the srimil States border-
ins upon India, and I am v4onderinG whether when it is desirable te
meet a case of tlut kind, it is vrise te put in somethinM which would
open it such a very vide sooc of exception. Already we have I think
in Article 55, (2) a provision by which. the Organization cazi waivo cor-
tain obligations of members. Now, is it net possible when the time
comes that a case could quite well be %.' out for the desirability of
having. sOer of those local -references such as the Indian delegLte has
nmntioned under that Article? I shottld have thought it wrould be
very much preferable if one could deal with it in that sort. cd' 'W
rather than put it in some very widely phrased exception which miZht
lead us into unforeseeable consequences.
THE CHAIRMAN: Could we leave th_.t question on one side and clear up this
other point, because I thnk we may have it clear? New; I have a suggestion
24.. EP/T/C.II/PV.8.
to make. I understand that there we two thingsthat are worrying
the Chilean delegate One is the ;possibility th^.t the lreforances
: t present in force between Chile and certain néighbouring countries
-might not be included in the list; ana, secondly, the fact, or the
possibility, that one of the dral'ts at cny rate apears to subject
the orfferencee 0f his country to. an examinationby standards which -
have -not been aprplied to other countries. At the sane time, Mr Hawkins
felt it necessary that those stanMards should, in tact be allied ,
although we mpy recognize that certain existiC preferences conform to
then, but that the standard should be st.nted in order that subsequent.
applications for exceptions under this clause could be examined in
accordance with those standards. Ncw it seeî-w to me that we can
agree on phraseology viich will meet both requirements if we amend
the draft t Article in this way. TakinSg the Canadien draft proposal
thera wouli be no change dowa to the sedord last line'of the first
paragraph; then tromi ",nd" it vrould read, "iand whichh affect in a
considerable degree the economiies of the countries concerned, includiMg
those falling within the description set forth in paragraphe (a),-
(b) and (c) below." Then we have (a) as it stands and (b) as it-
stands; and (c) vould re.d: "Preferences in-*orce exclusivoly between
Chule and neighbouring countries." Is it only between Chile and.Peru?
MR VIDELA (Chile): .>rgentina, 1933 and Peru, 1941.
UR HAWKINS (USA): I an still -in doubt about this. Hovw vrould you deal with
the other questions that are brought forward? I take it that there
would be a- process by vhich .there voeud be an exmination Of the
preferences actually granted and their economic facts, and that in
the light of that examina.tion the preferences ivould be admitted or not.
-1 think I vsouid prefer to have the first part; "he change in the Dirst
paragraph takes care of, en point, but I viould lice te see (c) road:
-"Preferences in force on the lst July 194.6 between neighbouring ooun-
tries. 4 New I think the Chiloan case could easily be ta]cèn care off
from the Chilean delegat' s point of view. He knows whet the preferential
25. I.3
E/PC/T/C. II,/PV.8.
system there is - I do not know and I`do not think others do; but if
his acceptaomc of (c) o'ulcl bu conditioned on his knowlodSe of those
*preferenccs, ond Chile could come wiithin that category, it seems to me
it protects his position fully.
MR. VIDELA(Chile): I accept either your proposal, Sir, or the American
Proposal, because both cover our wishes.
THE CHAIRMAN: In that case, I thiink we will accept the United States
alternativee, which includes incorporation of the qualfication in thc
rain part of the paragraph and leaves (c) reading: "Preferences in
force at the 30th June 1946' betiren neighbouring countries,"
MR VIDELA (Chile): Could we have this typed?
`R McKIMTON (Canada)- Mr Chairman, before we take that, tho insertion
of a second conjunctive clause thore miroy ma1o very C.esirable some
consequential anendments in the form of the third paragra:ph, and I
am vienderina - I am not attor.ritin:r ta redraft it - whether rle could
have sorethin8 like this: "In respect of those preferences vhich fall
withinn the description set forth in (a), (b) or (c) below the pro-
visions of paragraph (1) of this Articld shall not bc construodo" and
so on, otherwise you are goinM to have two conjunctive clauses
modifying the word "1preferences" and adding greatly to the confusion
cf the sentence.
J. fois.
26. THE CHAIRMAN: LEt me read it. I thinkc perhaps we had better have it typed.
A: present it would read as 'follows: "Tho provisions of paragraph 1 of'
this Article shaIl not be construed to require the elimination cf ary
pref'erences in respect of, irort customs duties and charges which do not
:exceed theWpreferences remeïIhin& aIter the negotiations
contei ed. - which shall affect in considerable degree the
economies of -the countries concerned and which fall within the description
set forth in a", b., and c. beloW". I thiflc this requires pretty carePul
examination, and I would suggest tha vie defer it once more and have it type&.
While we are waiting, ve could deal -with this 'question which the
Indian Delegate has raised. Briefly, I understand his point to be that
apart f:rom existing preferential arrangements which it is proposed should ba'
eliminated by a process of negotiation, there should be provision for the
establishmenlt of new preferences which include, presumably, the continuation
possiblyy of some of`'the existing preferences where they conforn to certain
-standards -- to certain requirements. As ho mentioned and emphasized, thére is
the geographical proximity and close economic dependence; they have, I think,
been`the two main factors. I think wea can discuss the thing in genera..
before we decide where is thé appropriate place to dcal with it. I think the
Unitod Kingdom argued that there was in one of the general escape clauses, -
Articlé 55, subparagraph 2, provision for the Organisation waiving certain
obligations ofeIembers, and this could bo usod to permit the establishment oP
preferential arrangements otherwise preclude. Would you like toe add
- nything tg what you have said so far?
MR AdRWKA3 (India.): Soefar as the first point raised by the United Kingdom
Delegate is concerned, namely that the preferences in force between India and.
- Burmna are covered by the opening portion of the revised draft of paragraph 2,
I feel, Sir, tha tiihat would be so only on the assumption that sueh. preferences
-my not be subject to eventual elimination, bùt tiat assumption, I believe
would be contrary to the principle underlying this particular paragraph.
As regard the second point, namely, that the need for such preferences is
felt, the countries concerned could approach the Organisation aand ask &ob their
27 E/PC/T/C.II/FV.8
obligations to bo waived in viewi of their particular circumstances, I feel
that that procedure would not take account of the very strong views
expressed on the point of view of principle by not merely India.but other
smaUler countries, su¢h as, for instances, .Lebanon, which are not- represented
here. Since a.poirnt of principle is involved, it should be settled.
- R HhWXINS (U.S.L.): .1 should be- very much opposed to the idea-of putting in a
new permanent reggional exception. We stàrt cut with the idea of.getting
rid of preféreences. Certain long-established important preferential systems
are involved. Their effect under this scheme is put on the block with a view
to having them eliminated. It seems to me wholly inconsistent to that objective
to permit new preferences to an unlimited extent by every country in the world.
I think that if we keep on watering down the most-favoure&-nation clause, we
might do better. I agree fully with the view expressed by the United Kingdom
Delegate. 'It seems to me that it. is just conceivable that there may be cases
where conditions are peculiar, and where there would be justification for some
sort of preferential arrangements. If so, tho countries concerned could bring
up the matter before. the Organisation under paragraph 55.2. and have it
examined,, if there is a case, if there is something special and peculiar
in the situation which could be authorisod. .
IM ADARXAR (India): Mr Chairman, may I suggest an amendment to what I have
proposed? I quite see the point raised by the United States Delegate and
also by the United Kingdom Delegate, that if vie describe these preferences as
preferences between neighbouring countries, that might allow an undue scope for
ail sorts of preferences to come into existence botvvoon neighbouring countries.
Would it be acceptable to the Committee if ive say: "Preferences necessary
to foster the economic development of amail countries", or "countries viith
a smal, home markett?
K.fs
J.2.
28 I move this amendment Sir, without any commltant on the part
of the Indian delegation,
Mr. HAPPY HAWKINS (USA): Mr CHAIRMAN, my general- objection i.6 to
any form of ne* preferences, I can ses tha point of-view-or the
delegate or India when he-iakes the tentative suggestion ora
3-ml Mting it to eralil markets, but I should llke to make ti-
polnt of vlew, that what.we:are trying to do is to make a big
one for everyone, to make a world market and not to have i-t
partiioned orr as -t has been i-n the past, It -1s our siencère
view that the interest' as aill countries wlill be served iJ- that,
- is done, Now', as I sald. efore, I th'nk there may be special-
cases, Ir 6o0 thèy should be examined as -such, and the' machInery.
'-i provided ror examIning them. If thera is a real case there,
.I think youcani assume.that.the Organi-sati`an will give its
sanction toi't,": Ech case ought to be examIned on its merIts,
.1r ADARICAR (Indila): )ir Ohairman, can I have a word,
M* r McKINNON (Oanada); Wi.thout attemptIng ta''pre-judge In the
s-li-ghte'st degree thëmeri-ts of the prti-cul&r case whlch.-the
delegate f'r ind&a has in mlnd, I feel that we are bound to'.
support vei'y strongly.the. vews expressed by !Mr Hawkins, As
rai' am- ny 'own aountry.is: concerned, one of the -most difficult
features we'shall have in attampting to reaoh agreement on
everything embodied In a Charter arises' out ,or the di-sposItion
,-o the preferences; and. at. the time when we.ar.e consentinG to
-put those prerevences, to uee Mr Hawkins phrase, en bloc or in
the pot with a-view to having them reduced or eliminated, we shoatld
certaInjy rInd. It.very. di-frfrcult to go back wltth en-ameidment to
the same Charter proved' ng for' the establ-shinent or new prerer-
'...,..:ences an ddi-erent basoe i-n different parts of the world,' I
. would lIke toarepeat`that.that i-s not in any way attempting to
aeu.eaess the mer-te or the case presented 80 ably by the Indian
.. delegate0; *but, Just as a r4atter of substance and pri-ciple we
sliould rihd it very,.di-ifcult indeed tao agres ta amendments to
29. theCharter which would. allow the creatci n'of riew preferences,
THE CHAZIB Pî Just beforee going on I would like to remnind. delegates
that in the general dlscuss6on on .thJs soctiUon of the draft
Charter Jn full Comnmlttee, as the Indlan delegate .has alreacly
pointed out, the desirability of the waey bel-ne open in certain
c1rcunstances ta the establisbrent of new regional profrerential
treas was fade by the delegate for Lebanon. Furthermore, you
will recall ais0 that the delegate for tha Netherlands drew,,
attention to the possible problems associated with the changing
political 'structure of the Dutch Emplre; that negotiations were
in progress between the Coentrel Dutoh Government and the represen-
tatl.ves of the local Inhabilants in'Indonnesla which would.
possibly lead to a change in the nature of thelr political
relationship, and that that may involve since change in thelr
possible tariff relationship, Furthermore, there was a related
fact that the customs union between the Netherlandls and Belglum
would presumably enta-l same future preferentIal treatment.of
the Netherlande East Ind.tes by Belgiumn. These are points wlth
whi-ch I personally amn-not very familiar, but I feit it was
desirrable that the attention of the Committee should be drawn
to i-,
Mr SHACKLE (UK): Mr Ohai-rrman, there have been mentioned to us a
large number of possible excepti-onal cases which are so various
and we do not know al1 the facts-about them, T.his seems to
suggest that the wi se course la to leave them to be examined in
future on some occasion when the merits and circumstances can be
fully Eone into, rather than to attempt .new:.to cover them. in some
form Of words 'which I think In the nature of the case would have
to be very wide, That does seem to me to point to the deeirabilit
of attemptt-ng to deal wIth them Ir not under Article 55 (2), at
any rate, under some procedure.whi-ch would. ensurethat all their
facts and circumstances shall be carefully gone Into -before a
30,' decision is reached, and in that way we may hope to avoid making
large departures' from: the under1yl nge prlnri-ples of' the whole
scheme of this draft Charter.
Mr. ADARKAR(India). Mr. Chairman, it is,quite true that the circum
stances, justifying new -.preferences may be rilany and. var.led; and
in so far as that is so, they will require consideration at a
later stage; but the fact has to be faced that one of those
special circumstances has already bee mentioned and stressed
to'the Oommittee axid the CommIttee has. beeri requested to takle
that Into' consideration, the 'speOlal cl roumstanée bei:ng..that
certain countiré 'ave. ,small home market and -find that prefer-
* ences with thelr ne -ghbouring tèrrxitories wiÏl.-assist their
e economic development4.» The only di feremoébetwee. ,the poi-nt of'
.vilew of the Indlan delegation and t`at or the'UnltedStates and.
- ' the Uni-ted Kingdom and the Oanadian delegati ons, is thatwhille
the Indian delegation would like this specJal ciroumstances whi-ch
has nlready been stressed; for. smaller countries tO-be taken into
account .now, these other delegations would l1ke that to be con-
s1dered later.' I f the Committee deci-ces that thls sha:llbe con-
si-dered later, in.. spi.te'of the fact that It has been mentIoned
now, there i8 a danger, Sir, I feel of the smalle' countrieS
f eeli-nE ttiat their point of vî ew di d notroêcéive adequate con-
sicaoration at the hands of' the ,Committee,
THE CHIRMAN: Mel ,<Gentlor.on, I would chl.ë to switch baok to the
-, . previous subject matter,' but just before I do, i-t mri-ght help if I
, mention thi- matter so that people may bo turning lt over lin their-
minds, I. think the 'eseent'ni. difference between the United -
'Klngdomr--United States point of vlew and tVlé' Indan i-s not 80 much
the Lact that.t.he types of cases would, bo varied and difficult to
cover i-n a'gnorCal, rule, but rather tht eacIl one did, require to
.be examined individual. y that whether it waes Justified or.not
would not be merely a mat..er of whether it canme under a certain
31. PAE
E/PC?T/C.II/IV.8
classification,but whether on balance its offects would be
advantageous or harmful, ana that that is not the sort of thing
which -tit is easy to- ever in'a cl.audo of a Ohartor, but which
couldJ only bojudged by indlivduàl oxarai-natlon I an, not quite
-sure whether I -have i-nterpratod the UnJte. States-United Eingdom
point ofview properly, but if that is a reasonable interpreta-
tion, it seerms to-me there are two ways invihi-ch it coulà. be mot,
possibly with satisf'ation to the Indian point of view - at
least ,one'of thenm, I gather that the United Kingdom view' a
that there does exist in Article 55 (2) th, possibility 0f excep-
tional. cases being examined without any reference to the-excep-
tlonal cases actually bei-nE lade i-n the rules ofthe Oharter,
and thatrmay well be' correct. 0f course, it does not meet the
point made by the- Indlan d.elegate that it is no open recognition
of the claim which certr'.in of the smaller countries have made,
kiAn aLternative mlght be, w1ilale reserving the shame type of pro--
cedure, to: mke specific reference'to this possi'ol-ty,' peraps.
by. the inclusion of a clause somewhat along these lines'
"The Memiers recoSnise that there may in exceptional cJrcum-
stances! '-that ils the phrase usedd In Artlcle 55 <?) -
'Ibe justification for new prefaerentinl7arr&ngeminta0 Th
.Organisation-should, therefore, be empowered to approve their.
establishment. where the OrganIsatlon l-s satisfied that they
are in the interests of the Inhabitarts of the countri-es con-
.¢erned and wlll not prove restri-cti-ve of Internati-onal tracleu,
That does not describe what they will be, but sets out a pro-
cedure'whereby a country could apply for thelr establhI-shment;.
and Indi-cates cortain possi-ble. ariterla - very broad criteria -
by whi-ch the Organisatlon could assist them We might have that
typed out,
32. ` E/PO/T/C.II/~V6. ,
THE CHAIRMAN: Shall we switch back ts c-.naiderati`on of
: Artiole 8(2)?`; How do you eel about this?,
MR HAWKINS (usA): I.think the idea is all- right but I am a
: little concernèd bout the way it is drafted-. The Canadian
proposal is that the provision in the Charter takes care of
preferences remaining after negotiation, but if.you read
the words "which affects to a considerable ,degree the
economies of the countries concerned" in that o-ntext I
wonder if it iits.
MR KcKINNON (Canada): It gualifies it.
MR HAWKINS Yes, it qualifies it. In other words,:it might be
rea as meaning that those-who remain can only be
MR"SHACKLE (U.K.): Might it not possibly be an advantgge-in
the first place to omit the words affectinge the economies
of the countries concerned" and then to change (o) .agaïn 80
as to specify the particular preferences of the Chilian
delegate? In that way it seems to me we 'shall avoid the
necessity for an examination as to whether particular
preferences do affect to a considerable degreethe economies
- of the countries concerned; and, in the second place, we
should: not appear to give any kind of sanction to` the
general proposition that there would be a. power tà set up new
preferences between countries merely because they are., con-
tiguous. Even wïth a date attached it looks rather arbitrary
.and rather suggests that there is some kind of cloak of .
8afletjona th'oWn o'er:the idea of exceptions to the most
'favoured natin clause mereelybecause two countries .happen
to be contiguous. I shoul . have thought that was a dangerous
principle, to seem. to sanction any particular one, and I amr
wondering whether by deleting the words whichh affeAts to a
consiïcerable c'egree the economies of the countries. con^berned',
andhaving a.speifio mention in (c) -of the Chilean preferences
we might not gain considerably. L.2 E/PC/T/C.II/PV:8
MR H iWKINS (USA): should bè prepared tc` abandon that clause
which I proposècl, in the interest, or getting on with this.
Myeeling on it is this. I do not believe that you find
many preièerences in force. There are a, lot of them pi'ovided
for but I do not believe youFind many.if them in force, and
it may be, therefore, that we are.targniFrying.the problem
to aome extent I' should be prepared tentatively, then, to
strike out from the first paragraph the words "which affected
to a considerable degree the economies of the countries.
; concerned" and.leave the, rest of it as. it iS. The effect
i' it would be that (.c) would cover any preference in aorce
at the time mantïoned between neighbouring countries and make
it' èubfoet ti negotiation. I say "tentatiely", as that
will give members here an opportunity to.consult their:
staffs and people who miïht kn3w what the effectual
situation ia as-regarcds regional preferences which actually
are ih force .
THE CHI.AIM. f I presume that- is satisfactory ta the Chilean
delegate, since it is hie own phrasing.
MR VIDE'L (Chile): I wao only going to say that when the
United States delegate made hie proposal I faet that we
should be:on-'the oame level-as other people ix regard to
preferences, but. aiter what he has. Just said I realize that
that 'May not be the best .thing,,.and. I.am very willing to
agree toa: his proposal.
THE OHMÈRMiN-: Ie there any further, comment. on this, or may I
take it as agBeed? ... Then I take it as agreed.
DR SPEEENBRINK (Netherlands):.. Now that we have finished this
point: Iviaifld like ta draw your attention ta what I thipkI is
a special' case. We had certain preferences granted. in
respect of the Belgian Congo. They are not very important
0 but i'Jr pa'iticai reasens jt is important that they should
be dealt with,
. L .3 - EM/PO/C.II/PVaB
THE CHAIRMAN: I think it would be a matter ± or the Committee
t . decide, but it does seem t3 me it,wu3uld be nn unusual
type of' case which mîightbe coveredd by thu generai exception
clause whîch, we were.iiiscussing -just- at the t.me you came in,
either under 55(2) or unexer corresponding .clause resting
to pre±erential arrangements in exceptional circumstances,
DR SPEEKONBRINK (Natherlands): The Congo preference is one of
very long stan.'ing.
THE CHoeAIRM;N: Yhat ij..the view of the Commoittee on this
question?.. Shoul.we cover this phase specifically by an
additional category under article 8(2). oir would it:.be- of-
the kind which -we would expect to be dealt with umde'r'an
exceptional circumstances clause?
MR Hl'SWKINS. (UM): There. must be quïte -a fèw of'-h'ese cases
which require special treatment, I vwoul,.&suggestilt should
be dealt with under a general clause :af -the Charter.
Meantime, it will almost automatically be dealt with in the
preliminary negotigations .which were ma.ntioned:
.5 1.,
. . E/PCT/O, I/ rVr86.
MR ADARKAR (INDIA): Mr. Chairman, I cm afrcld that I MM not in a. -osition
to state thé point of vievi of tho Indian daleZ,-tion on t1m particbl.r
amendment which is su Mosted, but, relying on r on judgement, I think
thatt it should miet tho requirements of small countries very woll in-
deed, na=mély, tho amondimnt vAith In ra.l clause to thc effect tz.th .
nerlers recognize that thore r-ay bc in exceptionril circumstances,
justification for new preferences.
THE CHAIRMAN; Can you comment on this in advance of the document?
Mr. HAWKINS(USA): I would like to have a chance to study it before, but
ff-hand I am inclined to think that it is geting close to what is
needed.
MR McKINON (Cana.d):' Is it the assur;mtion that it vould bhc dealt %ith
under .irtiole-55 (3) or would. it be new clause in the Chartor?
T1M CHiIaML4N: The sueestion was that that should be referred to. somewhere
in the Charter; precisely vehore I think i8 a ratter wo .iiiht le avc to
aur Rap;»orteur.
MR SPUEKIMBRINM (Netherlands): I aoc et that cposl.;
YR IUM3ILL (Cuba): Mir Chairoan, %vhon ue started this discussion I
thought tht the harOnz u? tho firàt ten liras of I)arcraph 2 W. s
agreed u;pon as it wu agreed tho other Cay, a.nd. that me rr'cro nom only
dealing vrith sub-arupae hs (a.), (b) me (c), whatever they vere. Novi
I can see that vre are vorkdnr on the draft of the Canadian proposal
which js different fru -the thin; that ve wero working, on the other dWo,
and, in Mr éplnion miGht change sore of the ideas re ho.ve in accordance
with the previous drafting of the first part of paragrwph 2. Therefore',
if it is the feeling of, the Conmittee that we re, a.irovïinC, nov at least
this part of paragraph 2 as it is in this Cnnadian pro;woB4, I have to
reserve the right of the Cuban delegation to study thosc first ton
lines which mWy affect our position in regard to certain exceptions,
certain modifications- and.certain amendînents that ve have already
proposed taking into consideration the Aimricon dratt,
TH CHAIIUAN; I thouZht tho inIontion of the firet six or ci.ht linos of
36, this was identical with your own draft.
Mr. ALAMILLA(CUba) No, tHINKare not at all. There is a great differences
in then - or at: last I thinI therc are so;æ dif frcnces - in drafting
: :aid riaybo in intention,
THE CGHAIRMANThere are obVIOUS differences ih drafting, but I understood
* the Caiodan proposal merely to bc the simpler wky cf eocpressinz the
fact that the date to which`thc rates .of duty would be subject to
negotiations was a matter for agreement betweenn the countries con-
ocrned, not to be ùmy specific date.
ER ALMMUd (Cuba): Yes; I thought that that was the only object, to.. :
change that :?art of the draft which dealt with the dates. For ex=l le,
at the end cf the paragrapih in the Amrican Charter it states that
these exceptiions are,. going to have a process of- eliuinxbicn, which
in ro oàiitLon, it right be - and I have not a perfect understanding
of the EnC1ish. language - have a vcry different méaninî from. these
words hero, where the phrase used reads, "not exceed the preferences
remaininrg oftér the preferences contacmplated in Article 18i
MR cKfMNON (Cannada): I am not sure that I Set the point of the Cuban
* delegate's remarks. It seeras to mc that wdhen-vie meài this afternoon
vwe had before us the original draft Charter; we had the proposed
substitution by the United Kingdom delegate; and atter they had been
both discuied for sosri little trie I moved a second alternative
which vras discussed, for an hour, and I think I undcorstoodc at the time
that it appeoled.to the Cuban deleSate. It seemed to.gàin general
acceptance, and I- thought that he in particular thought that it was a
simpler nnthoi ef expressing the same probleri4 Now wue hlwe been: dis-
cussing t or a couple of days that there should be a comrpilote. elimination.
.
o ' of these preferences to dates which miSht `appear inaipropriate in an
- instrument e' this kind, an instrument that will only bc signed and
. com into for¢c atter the tarift, negotiations have all been concluded.
I am nt at ar.l olear as to the point he is raisinS now.
MlR .ALILLA (Cuda): Well, the point is just this, We have been oontermlating
37. E/PC/T/Co.II/V, 8
beforo the Process or pro sses of' elimination, and to that we have
agreed, becase we think that tha ,process Of elimination many have
13evocr1l St2oBs -'it riri& bc .ore thin:; in Dre case ancl mother thïng in
.nother. Novi herm thcy rokCe a stecia1 referor?ée te neSotiations con-
teormlated in Aticle 18; but I ould.prefer to leave it is it is in
the present .'iricmn tecxt, thp.t in general they would be subject to
the process Of. elimination contaipl;ated in .article18.
14R. McKl:NON (C>ada): It scomas .to r that the Cuban delegates rcinrks
riust hang entirely u;pon the word "eliTiination."
THIE CHAIRMAN: It does seeri to me that therc is scathinM in this point.
IMR A.LI^LLA (Cuba)i; The word "process. "
MR McKCNNON (Ca "Eli.nation" in the C-anadian draft vas lifted
from the Arnerican draft and froni 1r Shackle' s draft. There has been
no change in the sense as regards the neaniri or connotation of the
word "oliinination."
II1 hTTi (Cube): It is the word ", rocess' that I vrould lïlco to have,
not tho 'word "e1''uiiiation."
*TIM CH\IUN: I Peei that 4hè OubCà delegate has put his finger-on a
real drrCting weaicness b se.. 1I see it, the negotiations eontem-
plated in Article 18 eant .to the, Cunadians ihen they drafted this
thc neGotiations which mould be con.)lete -in June next. That is oane
possible meanin,. The other is thnt these mgotiations referred to
are a whole series of oerotiatiàns endin -ultimnately in the elimination
of references. If you takce- the first alternative me.mninï, th-an this
Phrasing viould ancar to preserve the references %ihich survived. the
first nopotiationsfrrtlurther red.uctionsi but I knwu tht it was not
the intention, although T think that is one possible noaning, On-the
other hand, 'i the negotiations contemplated in A;rtiàle 18 here refer
te the whole series ôf negotiati ns, then apparently the preferences
are not protected until they have been oornpltely elininatedZ.
38 E.
It does to tothat it is unsatisfactory. I am not 'quite sure what
the r nswr ise. I suggest v'r might leaveit for our Rapporteur to work out
in consultation vith the Delogatas concerned. I think it would be wise to
- lave hat. point, and. perhaps if Mr `MKinnon and tho Dflegate for Cuba would
stay behind for a minute afttreards with the Rapporteur, they might. sort-it
:out.
R MoIenIMN (Canada) z Would. it meet the point of the Cuban Delegate if it said:
"after the processes of the negotiation contained in Article 18"?
We thought of ..rticle 18 as a possible series of negotiations.
IR ALAMILLA . (Cuba) : This is a very important point for Cuba, and I cannot take
the responsibility of deciding it at this afternoon's meeting, as to what
the vwording should be. We have been working for months on this previous
draft and ka.Inew exactly what it amount and exactly. how m'uch we could go.
This is. a nhovi draft and I must study it, and I must sec an7 the Counebllore
and I shall be willing to do it tomorrvn7, after consulting my Delegation tonight.
But I cannot do it now
TUE CHIERM.L:. I think we could hx leave it to be worked out in that way.
I think the idea we wànt to express is: that the recoanising of these
are a series of processes, hnhatever preferences exist, and after each stage.
of negotiations will be protected after'tho next one
ER McKIMNN (Canada): Would it be possible, before we break up, to get the
;wording of c., if a wording has been agreed on?
THE CMIRILaN: Yes:. "preferences in force In the 30th June, 1946, between.
neighbouring countries", Yfhat is the 'wish of the Committee, thatwo
adJourn at this stage?
lI MOKEIf N: I. would propose that since you ndw hava a draft of- the paragraph
relevant to the Indiîn Dolegatels proposal that wo attompt to ,get rid of
that tonight.-
THE CHAIREMG: Is that acceptable to the Committee?
UR HAWKIN (U-.S.A.).: Could wo have tho text.read.?
THE CHAEMAMN: Copies have been distributed, Ithink. They set out the two
alternative conclusions there,. with tvio diffarônt degrees of generalitY.
39. E/FCA'T/C.II/PXs.8 , *-
Mr. HAWKINS (U.S.A.) I think it would bc accuptable if we h d the first
alternative'.
THE CHAIRMAN: The Unitèd States Dcleate sUGGESTS that this would bc acceptable
.to him, and he would prefer t'l fiirst alternative. I suggest, if that is
all right, that we might delete the second "or warranted by the exceptional
circumstances", and make that continue straight on, stopping at "international
trade"..
kR iLUILULA (Cuba): Can we hLn.vc sornibody road it as it is going ta bc left?
(T' e Chairman read out the ,proposed text) .
IR MOKINMN (Canada): Prom the point of vicvr of the Canad.ian Delegation,
we could certainly say tlhat some of the preferances which are are now
arranging to eliminate or reduce could bo justified for retention or
enlargement -on either or both of the two bases mentioned. 'I could. go.
Cfurthb- and say that we could provo that there.are certain proferences at
present brought forward in negotiation which are:. (a) in the interests of
the inhabitants of the country, and (b) which if continued, will not,
prove'restrictiv- of international trade.
MR SPEKENBRINK (Netherlands): I do nîDt think it would entirely meet the
case. I wonder if we could not do it 'in this way: ; combine the last
two sentences in this way: 'lin the interests of the inhabitants of
the countries concerned, will not prove more restrictive ta -international
-trade than is warranted by exceptional circumstances".
MR McKINNON (Canada): Would not itbo better ta basa it ontireely and. solely
on exceptional circumstances, vwhich cover ali the other things and many
more?
' AsDARKAR (IndUi): The circumstanoos whicIl justify those preforencos are
sa widely existing that I doubt whether they could be regarded as
exceptional; they are peculiar ta many small countries, The amendment
suggested by the Nothorlands Dolegate would perhaps, I think, mzke it more
approximate ta the facts: "will not prove more rostrictïve ta international
Tade than'is warranted by exceptional circumstances".
40. THE CHAIRMAN: I would just point out to the Delegate for the Netherlands
that "!international trade" would, of course, include the trade betweeen
the two parties to the preferential ARRAngement, and that would be
. . .
excluded rom international trade, I should have it
requirements
should have thought that theo
were not 'unreasonableb.
o. fs. PAE
Mr SHACKLE (UX): ..You could say l'and would not on balance prove
restrictive of nternatJonal trade", I think .t.hat would. make
the point whichh you.were suggesting.
THE CHAIRIMNA: Do you understand the point, M. Lecuver?
M, LÈCUYER (France) (Interjretation): Yes, Mr hCal rman, I a.n
under the ImpreésIon that we have arri-ved at a deadlock here,
.and you have very correcotly suggested that the'same questions
were dl-s.oussed In the Plenary Comrmission'; no solution was arrived
* at' then; the various delegations merely set forth their various'
points of view, I quite understand the position of India and I
-also quite understand the disadvantage -explact-ned by Mr Hawkins of
adoptIng-a text which would openthe-door to a series of excep-
* tons, Everybody knows that everybody can always claim excep-
tlonal circumstances, - Therefore I wonder whether ln such a.
Committee on Procedure we can deal with a matter of substance as'
important as this one, Extremely important lnterets are
involved, The Netherlands delegate has pointed out the posi-
tion of Belgium and Holland In conneetion with the dongo and the
Duteh Ii-es; and I do not thlnk we can today dci-de that such a
text will cover such important cases, I therefore thlnk It would
be wlse only to state the diffleulty and to'leave the questJon
open, Even if we'adopted such a text the same diff'leultl.es
would arl-sewlIthin the Plenary Commjssjon, and I therefore suggest*
leaving the question open to set forth the var.louùs pos8tioné and
to leave the solution of thls question for a subsequent meetIng,
It seems to me, agarn I say, very dIf'flult to arrive at a :i-nal
solution of a question in -whJlch so important essential interests
are involved,
THE CHAIRMAN; Thank you. Wiell, I thl&n I should make It quite clear
that thlse SubcbmmittaR I- not one dealing solely wlth procedural'
matters, It was a Drafting Commlttee set up by Committee'II to
seek In d-scussions l-n a emallor group a resolution of the Issues
42, whi-c hhad been placed be.ora' Corariittee Il by the various dele-
gations, and I tno i.t to bo an essenti.i Thnction ofthi.ls
CouIittee to soek.suoh 'rosolutlons which are practIcablo, If
they do not prove to be practicablb, then the duty of thbo
Comz.ifttee i-s to report to that elf'eot and'submit alternative
drafts for the consideration of-CoomIttee-II or of the Plenary
Comraittee., or> alternati-velY, o. the recxt session of the Prepara-
tory Comm4ttee .tselt -next year. But l-n thu roan tio I think
our lirst task iisto seak, if we can, adra'l't whi.eh would resolve
the i-fleultios involved In-tho various confliotiîng poi-nts of
vi2 w, Howover., it. doos appoar as if we may be ipproadhing a
stage v.here wo wJi11. have to: resort -to thcJ process of' reportIng
a dIf r nce ,of opinion which 18s not'capabl of resolUtilon unless
tho various delegates can sce thelr way oloar to aoépti.ng some-
thnig of 1he Ilind.wh5.ch has been:put forward. I gather that
some of' the d-fficulty with the draftlng nhwc.h has been suggested
arJ ses from the 'erlteria whilh wo suggested, and I can soe diff i-
cultles J.n attempting to lay down orirteria. It mnght bo wise to
-leave the crIterla to the Organi-sation to work outi Would it`
bespossible for uu to agree on-a fo6ri such as thl-s: I think
possibly theappropriate place for deallng w1th this is Artilele
33, vilhich deals wlth territorial applcati-on, customs unions,
and 60 on. Clause. 1 of- that'ArtJcle reads: "The provsl.s-ôns of
Chapter IV shall apply to.. the -customas terrfitorJes oe the Member
. countrJe.s,' If there are-two or more oustomse'territoriles under
-the jurJsdiction ol any Member, oadh 'suoh customs territory
.. shall be considered as a separate Mei.ber- coun.tryl'for'the purpose '
ofl interpi7etiLng the' provisions of Chapt'er IV. 2. :The provisions
of. Chapter IV shalI not bc construed to.prevent (a)"- and (b)
k cleals wi-th the unzorî for oustoms purposes, We mighi add there
U(C) any pref erenti.al arrangeMent whlch inay be approved.by the J
Orgai rStlon J n aboordance wi-th or pursuant to Artsoie 55 (2)", E/PO/T/C. Il/ PV.8
Mr McKINNON (Canada): That is any now preference?
THE CHAIRMAN: Yes, any nev: preference -- or arrangement which
may be approved by the Organisatlon pursuant to paragraph 2 of
Article 55", Paragraph 2 of Article 55 reads: '"The Conference
may, by a vote of two thJrds of its Members, determine criteria
and set up proeedures, for walving, In exceptional circumstances,
obligations of !Kembers undertaken pursuant to Ohaptor IV of this
.Charter." That wouldleave to the, Organisatlon not only the task
of decVllng and approving these arrangements, but also leave
to thoam the task of deterxainInf the criteria whi-oh would warrant
Mr ADARAR .(India): Mr Chairraan, the fresh amendment suggested. by
you, Si-r, has certain dicsadvantages, .I I may say so, from the
point of view of the Indian delegation, because whJle In the fl-rst
amendbuent suggested by you there is a fair recognition that in
special clrcunstances -- we would prefor the word "special
[ instead of "lexceptIonal" - there may be justif Icatlon lor new
preferential arrangements, that recognition wlil be lessened In
the second amendment, The other disadvantage.which we soe Is
that by linking this new amendment to the provJsion of paragraph
2 of Art.icle 55, we shall be automatl-oglly laying down the con-
ditlon of the two-thirds majority vote,, We would preofee that
the type of majori-t'y which shall be required for a dec-sion of
thi-s sort shall be left over for later consi-erati-on, The
choice between exceptionall" and. "special'' i-s le$t to the
Committee, of course, Whataver li the best iiiay be adopted,
~And finally I would say that with the amendment suggested by Mr
Shackle, the fl-rst amendment suggested by you would In my Judg--
ment - agaln without committi-ng the Indian delegation -- meet
the point of view of India and other countries l si-milar
positIon very woll, Thé amendment to which I refer ia th18, that
it `i8 ln the interests of the inhabitants of tUe countries con-
cerned and.w4ll not on balance be restrlctive of International
- , A Mr. HAPPY HAWKINS (usa): mR CHAIRMAN, on tde first point of the
delegate of india, it seems to methat he solution proposed
meets all viewpoints first because it is neutral: it does
not prejudice the case in any way. it does, however, provide
means of consJ`derin-, the, special casa.
4 45, Thé -se coni.pointwwas about the two-thirds vote. If' you
*. ,ead paragraph 2 oSf .rticole 55 carefully yu wIll see that
."Tho Conference mlay, by n. vote or two thirds-of its members,
determine orite-ria and set Up proceduress". That daes not
necessarily mean th -àction oa a two-thirds vote.
DR SPREK-NBRINK. (Netherlands): The only CIiifïculty I am.faced
the
with is this point about/customs union which I mentioned. to
you earlier. It is the logical consequencesof an agreement
and a new tariff will, as far as I can see, b6 in force before
we have Dur negotiations ac.irdinZ to the charter, soathat
In effect weshqll have preference there before we can even
apply the appropriate i.rticle. That is just one oa the.
- diïi'culties.
MR McKINNON (Canada): I do not like to use the word "deadlock"
but, I think probably the delegate for France is right, and I
dobbt whether we can get much further. If' the proposal were
linked definitely with 55(2) we would be inclined, difficult
though it is, and running nounter to the whole spirit of the
charter, to'accept it. We have io keep in mind that under
this clause we would. have to permit the creation'cf new
preferences n. the very basia on which we can justify the
retention of the 3ines that we are being asked to give Up.
With the thought that we may not get !any further with.this,
I would like to say that the Canadian delegation would like
to be shown as dissenting in thiscase.
MR. .ADARR (India): Mr Chairman, so far as I can anticipate the
reaction of the Indian delegation, I think there would be no
*ob ection from their point of view to linking the first
amendment suggested by you with paragraph 2 of Article 55,
because tbe first amendment has the distinct advantage that
it recognises the principle.
THE CHAIRMAN: wE MIGHT SAY THIS: : "The members RECOGTNISE THAT P.2 E/PC/T/C. II/V.8
there may: in exceptional circumstances be justification
for new; preferential arrangements. The Organisation should
therefore be empowered to approve their establishment in
accordance wïth the procedure set out in articlee 55(2)."
Would that.meet the Indian delegate'é point - recognising
that the procedure be establisheci through Article 55?
MR J ADARKAR (India): I should think so, but
THE CHAIRMAN: Agreement here is necessarily tentative.
Then-may I say that wè tentatively agree on the draft which
I mentioned, and ask. th-e Rapporteur to look at it more
carefully, particularly in relation to its appropriate place
in the Charter? Is that agreed? (iLgreeid.)
It is suggested that we meet tomorrow morning. Would
Mr Wyndham-White be good enough to acquaint us with the
position
EXECUTIVE SECRETiRY: I think.that is all right, provided it
does.not matter thqt it conflicts withla meeting of the
Drafting Sub-Committee of the Joint committee. The
Technical Sub-Committee, I take it, is meeting tomorrow
afternoon?
MR VIDLA (.Chile): Yes, at 3 o'clock.
THE CHAIRMAN: I suggest that when we rescue we might take up
discussion on the point concerned in Article 1-I, the
drafting point t.o be rernoiied between the delegates cf
Cuba, Canada azd the Rapporteur.
The meeting i8 adjourned,
The meeting, rose at 6.55 p,m.
i..
47
1 f |
GATT Library | wg992xv6510 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Text of Protocol of Provisional Application as amended up to Septeniber 18, 1947 by the Tariff Agreement Committee | United Nations Economic and Social Council, September 18, 1947 | United Nations. Economic and Social Council | 18/09/1947 | official documents | E/PC/T/202 and E/PC/T/196-209 | https://exhibits.stanford.edu/gatt/catalog/wg992xv6510 | wg992xv6510_92290257.xml | GATT_155 | 455 | 3,084 | UNITED NATIONS
ECONOMIC CONSEIL RESTRICTED
AND ECONOMIQUE E/PC/T/202
SOCIAL COUNCIL ET SOCIAL 18 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Text of Protocol of Provisional Application
as amended up to Septeniber 18, 1947 by the
Tariff Agreement Committee
PROTOCOL OF PROVISIONAL APPLICATION OF THE
GENERAL AGREEMENT ON TARIFFS AND TRADE
The Governments of the Commonwealth of Australia, Belgium
(in respect of the metropolitan territory), the Kingdom of the
Netherlands (in respect of the metropolitan territory), and
Luxemburg, Canada, the French Republic (in respect of the
metropolitan territory), the United Kingdom of Great Britain
and Northern Ireland (in respect of the metropolitan territory),
and the United States of America, undertake, provided that all
of such governments shall have signed this Protocol not later
than November 15, 1947, to apply provisionally on and after
January 1, 1948 (a) Parts I and III of the General Agreement
on Tariffs and Trade and (b) Part II of that Agreement to the
fullest extent not inconsistent with existing legislation.
The above-named governments shall make effective such provisional
application of the General Agreement, in respect of any of their
territories other than their metropolitan territories, on or
after January 1, 1948, upon the expiration of thirty days from
the day on which notice of such application is received by the
Secretary-General of the United Nations. Any other government
signatory of this Protocol shall male effective such provisional
application of the General Agreement, on or after January 1, 1948,
upon the expiration of thirty days from the day of the signature
of this Protocol by such government.
NATIONS UNIES E/PC/T/202
Page 2.
Any government applying this Protocol shall be from to
withdraw such application on sixty days' written notice to the
Secretary-General of the United Nations.
This Protocol shall be open for signature untïl June 30,
1948, at the Headquarters of the United Nations, Lake Success,
New York, by any government signatory of the Final Act adopted at
the conclusion of the Sucond Session of the Preparatory Committee
for the United Nations Conference on Trade and Employment which
shall not have signed this Protocol on this day.
The original of this Protocol shall be deposited with
the Sacretary-General of the United Nations, who will furnish
certified copies thereof to all interested governments.
IN WITNESS WHEREOF the respective Representatives, after
having communicated their full powers, found to be in good and
due form, have signed this Protocol.
DONE in duplicate, in the English and French languages,
both authentic, at Geneva, this day of
1947,
FOR THE etc. [Note: Each signature would be accompanied
by an indication of the date of signature, i.e.
FOR THE UNITED STATES OF AMERICA:
John Doe
30 September 1947] |
GATT Library | km707mp0659 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Text of Section D. (Article 30) of Chapter V - Subsidies as approved by Commission B | United Nations Economic and Social Council, July 18, 1947 | United Nations. Economic and Social Council | 18/07/1947 | official documents | E/PC/T/130 and E/PC/T/124-135 | https://exhibits.stanford.edu/gatt/catalog/km707mp0659 | km707mp0659_92290156.xml | GATT_155 | 1,547 | 9,773 | UNITED NATIONS
RESTRICTED
ECONOMIC CONSEIL E/PC/T/130
AND ECONOMIQUE 18 July 1947
SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH
SECOND SESSION OF THE PREFARATORY COMMITTEE OF THE
UNITED NATIONS C NFERENCE ON TRADE AND EMPLOYMENT.
TEXT OF SECTION D. (ARTICLE 30) OF CHAPTER V - SUBSIDIES
AS APPROVED BY COMMISSION B
ARTICLE I*
SUBSIDIES IN GENERAL
If any Member grants or maintains any subsidy, including any
form of income or price support; which operates directly or
indirectly to increase exports of any product from, or to reduce
imports of any product into, its territory, the Member shall
notify the Organization in writing as to the extent and nature of
the subsidization, as to the estimated effect of the subsidization
on the quantity of the affected product or products imported into
or exported from the territory of the Member country and as to the
conditions making the subsidization necessary. In any case in
which it is determined that serious prejudice to the interest of
any other Member is caused or threatened by any such subsidization,
the Member granting the subsidization shall, upon request, discuss
with the other Member or Members concerned, or with the Organiz-
ation, the possibility of limiting the subsidization.
ARTICLE II*
ADDITIOINAL PROVISIONS ON EXPORT SUBSIDIES
1. No Member shall grant, directly or indirectly, any subsidy
on the exportation of any product, or establish or maintain any
other system, which in either case results in the sale of such
product for export at a price lower than the comparable price
charged for the like product to buyers in the domestic market, due
allowance being made for differences in the conditions and terms
of sale, for differences in taxation, and for other differences
affecting price comparability.
2. The provisions of paragraph 1 shall not prevent any Member
from exempting exported products from duties or taxes imposed in
respect of like products when consumed domestically or from
remitting such duties or taxes which have accrued. The use of
the proceeds of such duties or taxes to make payments to domestic
producers, however, shall be considered as a case under Article I.
except in so far as such payments subsidize exportation, in the
sense of paragraph 1 of this Article, by more than the amount of
the duties or taxes remitted or not imposed.
* The Cuban Delegation has reserved its position on
Articles I and Il pending a decision on the amendment which it
originally submitted on Article 30 and which was referred to the
Sub-Committee dealing with Article 15.
NATIONS UNIES E/PC/T/130
page 2.
3. Members shall give effect to the provisions of paragraph 1
at the earliest practicable date, but in any event not later than
two years from the day on which this Charter enters into force.
If any Member considers itself unabIe to make the provisions of
paragraph 1 effective in respect of any specified product or
products upon the expiration of such period, such Member shall, at
least three months before the expiration of such period, give to
the Organization notice in writing, riquesting a specific extension
of the period and accompanied by a complete analysis of the system
in question and the facts justifying it. It shall than be deter-
mined whether the extension requested should be made.
4. Nothing in paragraph 1 shall prevent any Member from
subsidizing exports of any product to the extent and for such time
as may be necessary to offset a subsidy granted by a non-Member
affecting its exports of such product. Provided that such Member
shall, upon the request of the Organization or of any other Member
which considers that its interests are adversely affected by such
subsidy, consult with such other Members or with the Organization
with a view to reachin, a satisfactory adjustment of the matter.
ARTICLE III
SPECIAL TREATMENT OF PRIMARY COMMODITIES
*1. A system for the stabilization of the domestic price or of
the return to domestic producers of a primary commodity,
independently of the movements of export prices, which results at
times in the sale of the product for export at a price lower than
the comparable price charged for the like product to buyers in the
domestic market, shall be considered not to involve a subsidy on
exportation under the terms of paragraph 1 of Article II, if it is
determined
(a) that the system has also resulted in the sale of the product
for export at a price higher than the comparable price
charged for the like product to buyers in the domestic market;
and
(b) that the system is so operated either because of the
effective regulation of production or otherwise as not to
stimulate exports unduly or otherwise seriously prejudice
the interests of other Members.
2. In any case of subsidization of a primary commodity, if
a Member considers that its interests are seriously prejudiced by
the subsidy or if the Member granting the subsidy considers itself
unable to comply with the provisions of paragraph 3 of Article II
within the time limit laid down therein, the difficulty may be
deemed to be a special difficulty of the kind referred to in
Chapter VII, and in that event the procedure laid down in that
Chapter shall be followed.
* The Australian Delegation has reserved its position on
paragraph 1 of Article III pending, its approval of the final
agreed text of article 17, E/PC/T/130
Page 3.
*3. If the measures provided for in Chapter VII have not succeed,
or do not promise to succeed, within a reasonable period of time,
either because no agreement has been reached or because the agrreement
is terminated, a Member adversoly affected may apply for exemption
from the requirements of paragraohs 1and 3 of article Il in respect
of that commodity. If it is determined that the circumstances
described in Article 53 (52 New York text) apply to the commodity
concerned, and that the subsidization will not be so operated as to
stimulated exports unduly or otherwise seriously prejudice the
interests of other Members, the Organization shall grant such
exemption until such data and within such limits as be determined.
ARTICLE IV*
UNDERTAKING REGARDING STIMULATION OF EXPORTS
Notwithstanding the provisions of paragraphs 1, 2 and 3 of
Article II and of paragraph 3 of Article III, no Member shall grant
any subsidy on the exportation of any product which has the affect
of acquiring for that Member a share of world trade in that
product in excess of the share which it had during a previous
representatives period, account being taken insofar as practicable
* The United States Delgation has reserved its position on
paragraph 3 of Article III and on Article IV. It wishes its
reservation to be, recorded in the following terms:
"The United States Delegation reserves its position regarding
Section D, Subsidies, as that section would apply to the situation
of a primary commodity which may be in burdensome world surplus as
described in Chapter VII. In such a situation the provisions of
the revised text would, result in inequitable treatment in two
respects:
1. It would permit countries which, to meintain their primary
exports in tires of world surplus, use export subsidies associated
with a special type of stabilization scheme (Article III, para.1)
or use domestic subsidies resulting in the stimulation of exports
(Article 1) to apply such subsidies and to continue them while the
procedures of Chpter VII were being, followed. It would not,
however, permit countris which use export subsidies not associated
with a special stabilization scheme to apply such subsidies. This
permission would be denied not only during a reasonable effort to
achieve multilateral international action to deal with the world
problem through Chapter VII precedures, but also thereafter until
it might be determined by consultation among interested countries
that the particular export subsidization contemplated would not be
so operated as to stimulate exports unduly or otherwise seriously
prejudice the interests of other Members (Article III, para 3).
2. In any case, the revised text would present subsidies on
exportation, whether or not associated with a special stabilization
scheme, from being operated so as to stimulate exports unduly or
otherwise seriously prejudice the interests of other Members
(Article III, paras. 1 and 3), and it would place an additional
limitation on export subsidies not associated with a special
stabilization scheme (Article IV), but it would, put no binding
limitation whatever on the use of domestic subsidies which
stimulate exports (Article I) ." E/PC/T/130
page 4.
Of any special factors which may have affected or may be
affecting the trade in that product. The selection of a
representative period for any product end the appraisal of any
special factors affecting the trade in the product shall be
made initially by the Member granting the subsidy; provided
that such Member shall, upon the request of any other Member
having en important interest in the trade in that product, or
upon the request of the Organization, consult promptly with
the other Mber or with the Orgeanization regarding the need
for an adjustment of the base period selected or for the
re-appraisal of the special factors involved.
ARTICLE, V
PROCEDURE
Any determination required by or appropriate to the
operation of this Section shall be made through the organization
by consultation among the Members substantially interested in
the product concerned. |
GATT Library | cn976zz6519 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Text of the Final Act as amended up to September 18, 1947, by the Tariff Areement Committee | United Nations Economic and Social Council, September 18, 1947 | United Nations. Economic and Social Council | 18/09/1947 | official documents | E/PC/T/203 and E/PC/T/196-209 | https://exhibits.stanford.edu/gatt/catalog/cn976zz6519 | cn976zz6519_92290258.xml | GATT_155 | 646 | 3,972 | UNITED NATIONS
ECONOMIC CONSEIL RESTRICTED
AND ECONOMIQUE
SOCIAL COUNCIL ET SOCIAL 18th September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
Text of the Final Act as amended up to September 18, 1947,
by the Tariff Areement Committee.
FINAL ACT.
In accordance with the Resolution adopted at the First
Session of the Preparatory Committee of the United Nations
Conference on Trade and Employment, appointed by the Economic
and Social Council of the United Nations on February 18, 1946,
the Governments of the Commonwealth of Australia, Belgium, the
Kingdom of the Netherlands, Luxemburg, the United States of
Brazil, Burma, Canada, Ceylon, the Republic of Chile, the
Republic of China, the Republic of Cuba, the Czechoslovak
Republic, the French Republic, India, Lebanon, New Zealand,
the Kingdom of Norway, Pakistan, Southern Rhodesia, Syria, the
Union. of South Africa, the United Kingdom of Great Britain
and Northern Ireland, and the United States of America,
initiated negotiations between their representatives at Geneva
on April 10, 1947 directed to the substantial reduction of
tariff's and other trade barriers and to the elimination of
preferences, on a reciprocal and mutually advantageous basis.
These negotiations have terminated to-day and have resulted in
the fráming of a General Agreement on Tariffs and Trade and a
Protocol of Provisional Application, the texts of which are
annexed hereto. These texts are hereby authenticated.
It is understood that the signature of this Final Act
or of the Protocol of Provisional Application by any of the
above-mentioned governments does not in any way prejudice their
NATIONS UNIES E/PC/T/203
page 2.
freedom of action at the United Nations Conference on Trade
and Employment.
This Final Act, together with the General Agreement on
Tariffs and Trade and the Protocol of Provisionai Application,
will be released by the Secretary-General of the United
Nations for publication on November eighteenth, one thousand
nine hundred and forty-seven, provided that the Protocol of
Provisional Application shall have been signed by November
fifteenth, one thousand nine hundred and forty-seven by all tho
countries named therein.
IN WITNESS WHEREOF the respective Represontatives have signed
the present Act.
DONE, etc,
For the Commonwealth of Australia ..............................
For Belgium ... .......... .... ...............
For the Kingdom of the Netherlands ...........................
For Luxemburg .............................................
For the United States of Brazil
For Burma ......................
Canada ...................
Ceylon ...................
the Republic of Chile ..
the Republic of China .....
the Republic of Cuba .....
the Czechoslovak Republic ..
the French Republic ......
India .......
Lebanon ...........
New Zealand .............
the Kingdom of Norway
Pakistan ........ . .
Southern Rhodesia .........
Syria ....... .
the Union of South Africa ..
........... ........................
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
. . . . . . . . . .. .. .. .. .. . .. . . . . .....
. . . . . . . . . . . . . . . . . . . . e
., . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .
.
. ........... . ...
For the United Kingdor of
Great Britain and Northern Ircland ................
For.t.e ........tates of A.erica .....................*.e.. *e @
For
r
For
For
For
For
For
For
For
For
For
For
For
For
For
For
For |
GATT Library | ts223fd2444 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Texts Recommended by the Sub-Committee on Schedules Relating to the Possible Adjustment of Specific Rates of Duty | United Nations Economic and Social Council, September 19, 1947 | United Nations. Economic and Social Council | 19/09/1947 | official documents | E/PC/T/208 and E/PC/T/196-209 | https://exhibits.stanford.edu/gatt/catalog/ts223fd2444 | ts223fd2444_92290263.xml | GATT_155 | 390 | 2,546 | UNITED NATIONS NATIONS UNIES RESTRICTED
E/PC/T/208
ECONOMIC CONSEIL 19 September 1947.
AND ECONOMIQUE Original: ENGLISH
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
Texts Recommended by the Sub-Committee on Schedules Relat-
ing to the Possible Adjustment of Specific Rates of Duty,
If the provision is to appear as a note in the appropriate
Schedules, the Sub-Committee recommends the following model
text:
"It is understood that the specific duties and charges
included in this Schedule are expressed in [the currency
unit of the country to which the Schedule relates of
the par value accepted by the international Monetary
Fund at the date of this Agreement.
It is agreed that, in case this par value is reduced
consistently with the Articles of Agreement of the
International Monetary Fund by more than 20 per cent,
the specific duties and charges may be adjusted to
take account of such deduction in the par value of the
currency; Provided that the Contracting Parties
concur that such adjustments will not impair the value
of the concessions granted in the Schedule, due account
being taken of all factors which may influence the need
for, or urgency of, such adjustments."
If the provision is to be incorporated in the Agreement
as part of Article II, the Sub-Committee recommends the
following text:
"It is understood that the specific duties and
charges included in the Schedules are expressed E/PC/T/208
page 2.
ln the appropriate currency at the par value
accepted by the International Monetary Fund
at the date of this Agreement.
It is agreed that, in case this par value
is reduced consistently with the Articles of
Agreement of the International Monetary Fund
by more than 20 per cent, the specific duties
and charges may be adjusted to take account
of such reduction in the par value of the
currency; Provided that the Contracting Parties
concur that such adjustments will not impair the
value of the concessions granted in the
Schedules, due account being taken of all factors
which may influence the need for, or urgency of,
such adjustments.
Similar provisions shall be available to any
contracting party not a member of the International
Monetary Fund as from the date on which such
contracting party enters into a special exchange
agreement in pursuance of Article XV of this
Agreement." |
GATT Library | hw945ty7854 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Textual revision by the Secretariat of paragraph 3 of Article II to take account of revisions made in Article 31 of the Charter for which appropriate allowance had not been made in the version reproduced in E/PC/T/189 | United Nations Economic and Social Council, September 1, 1947 | United Nations. Economic and Social Council | 01/09/1947 | official documents | E/PC/T/189 Corr.2 and E/PC/T/189-196 | https://exhibits.stanford.edu/gatt/catalog/hw945ty7854 | hw945ty7854_92290244.xml | GATT_155 | 321 | 2,165 | E/PC/T/189 Corr.2
ECONOMIC CONSEIL 1 September 1947
AND ECONOMIQUE
SOCIAL COUNCIL ET SOCIAL ORIGINAL ENGLISH
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
Textual revision by the Secretariat of paragraph 3
of Article II to take account of revisions made in
Article 31 of the Charter for which appropriate
allowance had not been made in the version reproduced
in E/PC/T/189
3. If any contracting party, after the day of signature
of this Agreement, establishes, maintains or authorizes,
formally or in effect, a monopoly of the importation of any
product for which a maximum import duty is provided in the
appropriate Schedule annexed to this Agreement, the price
for such imported product charged by the monopoly in the
home market shall not, except as otherwise provided for in
any such Schedule, exceed the landed cost plus such maximum
import duty; after due allowaance for internal taxes, trans-
portation, distribution and other expenses incident to the
purchase, sale or further processing, and for a reasonable
margin of profit; Provided that regard may be had to average
landed costs and selling prices over recent periods; and
Provided further that, where the product concerned is a
primary product and the subject of a domestic price
stabilization arrangement; provision may be made for
adjustment to take account of wide fluctuations or varia-
tions in world prices subject to agreement between countries
parties to the negotiat-lon of the maximum import duty. The
monopoly shall, wherever this principle can be effectively
applied and subject to the other provisions of this Agreement,
import and off:r for sale such quantities of the product as
will be sufficient to satisfy the full domestic demand for
the imported product, account being taken of any rationing
te consumers of the imported and like domestic product which
may be in force at that time.
* Corrigendum has been issued in French only.
UNITED NATIONS
RESTRICTED
NATIONS UNIES |
GATT Library | db522mm4563 | Second session of the Preparatory Committee of the United Nations Conference on Trade and Employment : The Delegation of the United States of America submits the following proposed amendments to Articles 14 and 24: Article 14 | United Nations Economic and Social Council, May 30, 1947 | United Nations. Economic and Social Council | 30/05/1947 | official documents | E/PC/T/W/146 and E/PC/T/W/125-150 | https://exhibits.stanford.edu/gatt/catalog/db522mm4563 | db522mm4563_90050282.xml | GATT_155 | 1,119 | 7,263 | RESTRICTED UNITED NATIONS NATIONS UNIES
ECONOMIC CONSEIL E/PC/T/W/146
AND ECONOMIQUE 30 May, 1947.
SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
The Delegation of the United States of America submits
the following proposed amendments to Articles 14 and 24:
Article 14
General Most-Favoured-Nation Treatment
1. With respect to customs duties and charges of any
kind imposed on [,] or in connection with [,] importation
or exportation or imposed on the international transfer of
payments for imports or exports, and with respect to the
method of levying such duties and charges, and with respect
to all rules and formalities in connection with importation
or exportation, and with respect to all matters [in regard
to which national treatment is provided for in Article 15]
referred to in paragraphs 1, 2, 3 and 4 of Article 15, any
advantage, favour, privilege or immunity granted by any
Member to any product originating in or destined for any
other country, shall be accorded immediately and uncondit-
ionally to the like product originating or destined for all
other Member countries respectively.
2. The provisions of paragraph 1 of this Article
shall not be construed to require the elimination, except
as provided in Article 24, of any preferences in respect of
[customs] import duties or [other] charges or internal
taxes [imposed on importation] which do not exceed the
preferences remaining in force after the negotiations
[contemplated] provided for in Article 24 and which fall
within the following descriptions:
(a) .......
(b).......
(c) .......
Comment
1. The changes proposed in line 8 of paragraph 1 are
designed to extend the grant of most-favoured-nation treat-
ment to all matters dealt with in Article 15 (except gov-
ernmental operations under paragraph 5 of article 15) re-
gardless of whether national treatment is provided for in
respect of such matters.
.
. E/PC/T/W/146
page 2.
2. Certain drafting suggestions are made in paragraph
2 with a view to making Articles 14 and 24 fully consistent.
The insertion of the reference to internal taxes would place
preferential internal taxes on the same footing as preferential
tariffs, both of which would be subject to negotiation under
Article 24 (sue below).
Article 24
Reduction of Tariffs and Elimination of Preferences
1. Each Member, other than a Member subject to the
provisions of Article 33, shall, upon the request of any
other Member or Members, enter into [reciprocal and mutually
advantageous] negotiations with such other Member or Members
directed to the substantial reduction of tariffs [and other
charges] on imports and exports and [to] the elimination of
the [import tariff] preferences referred to in paragraph 2
of Article 14 on a reciprocal and mutually advantageous
basis. These negotiations shall proceed in accordance with
the following rules:
(a) Prior international [commitments] obligations
shall not be permitted to stand in the way of negotiations
with respect to [tarriff] preferences, it being understood
that [action] agreements resulting from such negotiations
shall not require the modification or termination of existing
international obligations except [by agreement between]
(i) with the consent of the [contracting] parties to such
obligations, [failing that] in the absence of such
consent, (ii) by termination of such obligations in accor-
danco with their terms.
See (b) below
(c) The binding [or consolidation] of low tariffs
or of tariff-free treatment shall in principle be recognized
as a concession equivalent in value to the substantial re-
duction of high tariffs or the elimination of tariff prefer-
ences.
2. ......
(b) All negotiated reductions in most-favoured-
nation [import tariffs] rates shall operate automatically to
reduce or eliminate margins of preference, and no margin of
preference shall be increased.
3. If any Member considers any other Member has failed
[within a reasonable period of time] to fulfil its obliga-
tions under paragraph 1 of this Article, such Member may re-
fer the matter to the Organization which, [shall make an]
after investigation, shall make appropriate recommendations
to the Members concerned. [The Organization, if it] If the
Organization, taking into account the economic position of a
Member under the Charter as a whole finds that a such
Member has [, without sufficient justification, having regard
to the provisions of the Charter as a whole] failed without E/PC/T/W/146
page 3.
sufficient justification to negotiate with such complaining
Member, within a reasonable period of time, in accordance with
the requirements of paragraph 1 of this Article, the Organization
may determine that the complaining Member, or in exceptional
cases the Members [of the Organization] generally, shall, not-
withstanding the provisions of Article 14, be entitled to with-
hold from the trade of the other Member any of the tariff
benefits which the complaining Member, or the Members
[of the Organization] generally as the case may be, may have
negotiated pursuant to paragraph 1 of this Article, If such
benefits are in fact withheld, so as to result in the
application to the trade of the other Member of tariffs
higher than would otherwise have been applicable, such other
Member shall then be free, within sixty days after such action
is taken, to withdraw from the Organization upon the expira-
tion of sixty days from the date on which written notice of
such withdrawal is received by the Organization. The
provisions of this paragraph shall operate in accordance with
the provisions of Article 67.
Comment
1. The proposed amendments to the opening sentence of
paragraph 1 are designed
(a) to make it clear that the reciprocal and
mutually advantageous character of the arrangements in-
visaged applies to the arrangements themselves rather than
to the negotiations leading up to their conclusion, and
(b) to assure that all preferences excepted
from the most-favoured-nation clause by virtue of paragraph 2
of Article 14 will be subject to negotiations under Article 24.
1 (a) The changes proposed in paragraph 1 (a) are
designed to clarify the provision and render it more precise.
1 (c) It is proposed to omit from paragraph 1 (c) the
reference to the consolidation of duties in order to avoid
the possible interpretation that a binding and a consolida-
tion are different things.
3. The changes proposed in paragraph 3 are largely of
a drafting nature. The phrase "within a reasonable period
of time" has been moved so as to make it clear that the
Organization, rather than a complaining Member, would judge
whether another Member was complying with its obligations
within a reasonable time.
Note: The United States Delegation may wish at a later stage
to make certain suggestions for a general regroupong of
articles under Chapter V. Meanwhile, it is proposed that
Articles 14, 15 and 24 should in any event be grouped to-
gether under a single section. |
GATT Library | nm545gh3967 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Third Special Report on the Progress of Tariff Negotiations by the Tariff Negotiations Working Party | United Nations Economic and Social Council, July 24, 1947 | United Nations. Economic and Social Council | 24/07/1947 | official documents | E/PC/T/S/4 and E/PC/T/S/4-12 | https://exhibits.stanford.edu/gatt/catalog/nm545gh3967 | nm545gh3967_90260178.xml | GATT_155 | 2,562 | 16,752 | NATIONS UNIES
E/PC/T/S/4
ECONOMIC CONSEIL 24 July1947.
AND ECONOMIQUE ORIGINAL: ENGLISH
SOCIAL COUNCIL ET SOCIAL SECRET
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
THIRD SPECIAL REPORT
ON THE
PROGRESS OF TARIFF NEGOTIATIONS
BY THE
TARIFF NEGOTIATIONS WORKING PARTY
The reports received from delegations for the fortnight
ending 12th July present a discouraging picture, especially
when compared with the reports of two and four weeks earlier.
It seems that little progress has been made in these past four
weeks; only six negotiations; all of minor importance, have
been completed in this period, only eight others have advanced
to the stage of nearing completion, and there are only a further
eleven on which the two delegations agree that "considerable
progress" has been made. Thus it is evident that the
negotiations must progress far more rapidly in the coming month
if the target date is to be observed.
During the past fortnight the Working Party has made a
careful survey of all the negotiations and has interviewed the
representatives of several delegations. It is hoped that the
results of these discussions will become apparent in the near
future and that all delegations will press forward, with their
negotiations as rapidly as possible.
The reports on the state of negotiations received from
delegations for the fortnight ending 12th July record that two
pairs of countries have completed their negotiations in addition
to the five which were mentioned in the last report. The
UNITED NATIONS.S E/PC/T/S/4
page 2
negotiations now completed are:
Canada - Norway China - South Africa
Chile - Norway Cuba - South Africa
Chile - South Africa Czechoslovakia - South Africa
Norway - South Africa
Thus, 7 pairs of countries have now completed the bilateral
stage of their negotiations, but the trade between them is only
19 million dollars and is less than 0.3% of the total trade
among the countries represented on the Preparatory Committee,
Twenty negotiations are said to be nearing completion.
On eight of these the reports of the two countries coincide:
Brazil - United States
China - Czechoslovakia.
Cuba.- India
Czechoslovakia - Norway
India - New Zealand
India - Norway
France - South Africa
New Zealand - South Africa
But on the other twelve one of the countries gives a
less favourable opinion:
mpors"
Australia - South Africa: (Austraysa sa. "making pr")ress)
Brazil - Canada: (Canada "aas Mmiking progress")
Canada - India: (Canada smys "raking considerable progress")
Chile - India: eChilo "ays 'making pro"resso)
China - Norway: (China "ays lmaking prog"ess H)
Cube. Norway; (Cuba "makinakingg considerable progress")
-Cuba - U.K. (Cuba "iys Kalimre].iinary s")ges)
Czechoslovakia - IndiazechoslovakV,`kia s"ys imaking
considerable progr")s )
Czechoslovakia - Leba/on! Sy:ia, (Lebanon/Syria sa"s. in
preliminary stages")
India anbPion/Syria: bLe anon/Syria say" :`in preliminary
stag"s S)
'New Zealand - Lebanonriaia, bLeLanon/Syria says "in
P: liminary sta"ess)
South Africa - U.K.: (South Africa says " making progress"). E/PC/T/S/4
page 3
In the 16 reports there are 42 crosses in the column
headed "making, considerable progress these include the
following in addition to those mentioned above: (The opinion
that the negotiations are "making considerable progress" is
expressed by the countries underlined)
Australia - Czechoslovakia
Australia - France
Australia - Norwary
Benelux - Canada
Benelux - France
Benelux -South Africa
Brazil - Chile
Brazil - Czechoslovakia
Brazil - India
Brazil - United Kingdom
Canada - China
Canada - Czechoslovakia
Canada - France
Canada - India
Chile - Cuba
Chile - Czechoslovakia
Chile - United Kingdom
Chile - New Zealand
China - United Kingdom
China - U.S.A.
Cuba - Czechoslovakia
Cuba. - United States
Czechoslovakia. - France
:Czechoslovakia. - New Zealand
Czechoslovakia - U.S.A.
France - United Kingdom
Lebanon/Syria - United Kingdom
Lebanon/Syria - United States
Norway - United Kingdom
Norway _ United States
United Kingdorn - United States E/PC/T/S/4
page 4
The following improvements, in the progress of negotiations
in the past fortnight are reported:
15 opinions of improvement from "in preliminary stages"
to making progress";
3 opinions of improvement from "in preliminary stages"
to "making considerable progress";
1 opinion of improvement from "in preliminary stages" to
"nearing completion"
13 opinions of improvement from "making progress"
to making considerable progress";
11 opinions of improvement from "making progress"
to "nearring completion"; and
5 opinions of improvement from making considerable
progress" to "nearing completion".
In 123 cases no change in opinion is recorded. On the
other hand, two delegations report that certain negotiations
are less advanced than they were an fortnight ago:
Cuba in its negotiations with Canada.
Czechoslovakia. in its negotiations with United Kingdom
One meeting for tho opening of tariff negotiations was
held during the fortnight ending 12th July, and there are now
102 negotiations in progress. 84 meetings were held during the
past fortnight bringing the total number to 467. 20 pairs of
countries have held only one meeting, 20 have held two, 20 have
held three, 14 have hold four and 12 have held five. Only 16
pairs of countries have held more than five meetings, and if these
are deducted the average for the remaining 86 is only 2.7. E/PC/T/S/4
page 5
ANNEX .
STATE OF TARIFF NEGOTIATIONS
(as at 12th July)
1. 102 NEGOTIATIONS
Number
of
meetings
held up
to
12 July
tote of
egot'ns
s re-
orted by
he two
ountries
(1)
2 - 2
3 - 2
1 - 1
2 -2
2 -3
2 - 4
2 - 2
3 - 3
1 - 1
3 - 2
4 - 4
3 . 3
3 - 2
2 - 2
1 - 1
2 -.1
3 - 2
2 - 2
3- 2
S
n
a
p
t
c
34 Canada - U.S.A.
26 U.K. - U.S.A.
2 India - U.K..
14 Benelux - U.K.
9 Benelux - France
8 S. Africa - U.K.
13 Benelux - U.S.A.
15 France - U.K.
6 France - U.S.A.
30 Cuba - U.S.A. .
5 Brazil - U.S.A.
4 Norway - U.K.
10 China - U.S.
5 India - U.S.A.
1 A ustralia - U.S.A.
2 S. Africa - U.S.A.
4 Brazil - U.K.
3 Chile - U.S.A.
20 Czechoslov..- U.S.A.
Trade in 1938
Approx. as a %' of
value in total trade
Dollars among all
(millions) countries
represented
at the Conf.
(2)
782 11. 3
607 10.0
405 5.9
361 . 5,2
287 4.2
263 3.8
249 3.6
212 3.1
198 2.9
194 2.8
.73 2.5
107 1.6
100 1.5
98 . 1,4
88 1.3
87 1.3
61 0 O.9
59 . 0o9
54 0.8
(1) The figure "1" indicates "in preliminary stages",
t " f ""2' "making progress",
"3"1*t " t "making considerable progress",
1" I ""4' " " nearing complet"onn, and
.'" f" "I5f " that the negotiations have been completed.
The first figure records the opin on.expressed by the first-named
country, the second figure records that of the second-named country.
(2) The trade of dependent territories is not included with that of
the countries having international responsibility for them.
Number
of
weeks
since
first
meeting
il
11
10
6
6
8
9
10
11
8
IC
10
9
10
11
10
7
10
11 E/PC/T/S/4
page 6
Number
of
meetings
held up
to
meeting 12 July
3 Benelux - India
Czechoslov. - U.K.
China - U.K.
Australia - France
Chile - U.K.
Norway - U.S.A.
Benelux - Czechoslo
Benelux - Brazil
Bnelux - Canada
France - India
Benelux - S. Africa
Benelux - Norway
Australia - Benelux
N. Zealand - U.S.A.
Brazil - France
Cuba -U.K.
Czechoslov. - France
France - Norway
Australia - India
Canada - France
Benelux - China
France - S. Africa
China - India
Chile - France
China - France.
Benelux - Chile
Canada - India
Czechoslov - India
Canada - Norway
Australi -- China
China - Czechoslov.
3 France - Lebanon/Sy
Trade in 1938
State of Approx. as a % of
negot'ns value total trade
as re- in among all
ported by Dollars countries
the two (millions) represented
countries
2 - 2 50
1-1 48
2 3 47
3 -3 46
2 -3 45
3 -3 44
2 - 2 37
1 1 36
3 -2 35
2 -2 34
3 -2 34
2- 2 33
1- 1 33
1- 1 31
2 -1 30
1 -4 27
2 -3 22
2 - 2 20
1 -1 20
2 -3 20
2 -2 17
4 -4 16
1 -2 15
1-1 13
2 - 2 13
1- 1 12
3 -4 12
4 - 3 11
5 - 5 10
2-1 9
4 - 4 9
1-2 8
at the Conf.
(2)
0.7
0.7
0.7
0.7
0.7
0.6
0. 5
0 . 5
0.5
0.5
0.5
0.5
0.4
0.4
0.4
0.3
0.3
o.3
0.2
0.2
0.2
0.2
0.2
0.1
0.1
0.1
Number
of
weeks
since
first
9
6
9
10
6
10
6
1
9
7
8
9
6
10
61
10
6
10
6
11
8
11
7
1
10
10
7
8
5
8
8
3
5
11
4
12
4
1
5
5
3
2
3
1
3
2
3
5
2
10
4
2
1
4
3
3
6
3
5 E/PC/T/S/4
page 7
Trade in 1938
Number Number State of Approx. as a % of
of of negot'ns value total trade
weeks meetings as re- in among all
since held up ported by Dollars countries
first to the two (millions) represented
meeting 12 July countries at the Conf.
_ _ ( 1) (2)
4 2 Benelux - Cuba 1 - 1 7 0.1
6 4 Czechoslov. - Norway 4 - 4 7 0.1
7 4 Czechoslov.- S.Africa 5-- 5 7 0.1
6 5 France - N. Zealand 2 - 2 7 0.1
4 1 Brazil - Czechoslov. 2 - 3 7 0.1
4 4 Australia - Czechosl. 2 - 3 6 0.1
9 5 Canada - Czechoslov. 2 - 3 6 0.1
6 3 Benelux - N. Zealand 2 - 2 5 0.1
6 3 Brazil - Canada 4 - 2 5 0.1
5 3 Australia - S.Africa 2 - 4 5 0.1
7 4 Canada - China 3 - 2 5 0.1
8 2 Cuba - France 1 - 1 5 0.1
7 5 Lebanon/Syr. - U.K. 3 - 3 5 0.1
8 7 Lebanon/Syr. - U.S.A. 3 - 3 5 0.1
5 5 India - Norway 4 - 4 4 0.1
:6 2 India - New Zealand 4 - 4 3 0.1
6 4 Benelux - Lebanon/Syr. 3 - 2 3 0.1
4 1 Brazil - India 2 - 3 3 0.1
7 2 Australia - Norway 3 - 3 2 - _
1 3 Brazil - Chile 1 - 3 2 -
7 1 Brazil - Norway 2 - 1 2 -
2 3 Chile - Cuba 2 - 3 2 -
3 1 Chile - Czechoslovak 1 - 3 2 -
8 3 China - Norway 2 - 4 2 -
7 a 2 Cube - India 4 -4 2 -
1 Brazil-- China 2 -1 1 -
6 1 Srazil - 3. Africa 2 - 1 1 -
7 1 Canada - Chile 1 - 2 1 -
9 4 Canada - Cuba 1 - 2 1 -
6 2 Chile - India 2 -4 1 -
9 1 China- N. Zealand 1 -1 1 - E/PC/T/S/4
page 8
State of
nageot'ns
as re-
ported
by the two
countries
(1)
China - S. Africa
Cuba - Czechoslov.
Cube - N. Zealand
Cuba - Norway
Czechoslov.-Leb/Syr.
Czechosl. - N.Zealand
India - Leb./Syria
N. Zealend - S.Africa
Norway - S. Africa
Australia - Brazil
Australia - Cuba
Brazil - Cuba
Brazil - N. Zealand
Canada - Lebanon/Syr.
Chile - N. Zealand.
Chile - Norway
Chile - S. Africa
China - Cuba
Cuba - S. Africa
N. Zealand - Norway
-5
-3
-1
-4
-1
-2
-1
-4
-5
-2
-2
-1
-2
-1
-2
-5
-5
-2
-5
-2
Trade in 1938
Approx. as a % of
value total trade
in among all
Dollars countries
(Millions) represented
at the Conf .
(2)
1 -
1 -
1. -
1 -
1 -
1 -
1 -
1 -
1 -
5426
Number
of
meetings
held
up to
12 July
Number
of
weeks
since
first
meeting
9
10
8
7
8
9
3
9
9
6
8
9
6
8
2
7
9
78,8
467 E/PC/T/S/4
page 9.
2. POSSIBLE NEGOTIATIONS NOT YET INITIATED
Trade in 1938
Approx. value as a % of
in dollars total trade
(millions) among all
countries
repres.at
the
Conference
(a) Two pairs of countries expected to
initiate negotiations in the near future:
Australia -Chile 1
Chile - China -
1_
(b) Eight pairs of countries - Members of a
Preferential System:
Australia - United Kingdom 527 7.6
Canada - United Kingdom 496 7.2
New Zealand - United Kingdom 310 4.5
Australia - Canada 45 0.7
Australia - New Zealand 36 0.5
Canada - New Zealand 24 0.3
Canada - South Africa 19 0.3
India - South Africa 8 0.1
1,465 21.2
(c) Bight pairs of countries having insufficient
trade to provide a basis for negotiations:
China - Lebanon/Syria 1
Australia - Lebanon/Syria
Brazil - Lebanon/Syria - -
Chile - Lebanon/Syris - -
Cuba - Lebanon/Syria - -
Lebanon/Syria - New Zealand - -
Lebanon/Syria - Norway
Lebanon/Syria - South Africa
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Total trade among countries reoresented
at the ConferencU -6,893 100.0 E/PC/T/S/4
page 10
14 NEGOTIATIONS BEGUN PRIOR TO 1ST JUNE
BUT ONLY OME £EETING HELD UP TO 12TH JULY
Week ending:
26 April M3 bay 10 May M7 P y '24 May 31 May
Australia - U.S. 23 April
Brazil - China 8 May
Brazil - Cuba 9 May
BrazilC- Uzechosl. 30 May
Brazil - India 27 May
Brazil - N.Zealand 30 May
B.azil - Norway 9 May
Brazil - S.Africa 28 May
Canada - Chile 20 May
Canada - Lebanon/
Syria 1a Muy
ChinaMN 4. Zealand 7 May
Cuba - N.Zealand 13 May
Czochcslov. - L.Syria 16 May
N.Zealand - U.S. 30 April E/PC/T/S/4
page 11.
ANNEX C
THE 28 NEGOTIATIONS THAT HAVE PROCEEDED
BEYOND THE FOURTH MEETING UP TO 12 JULY
(Showing in brackets the percentage of
the total trade in 1938 among the
countries represented at the Conference)
eetings:
g LeetinRs:
ngs etiee :
8 ieetlngs:
g Ivet nzs
1g Meetin-s.
11 Yeetings;
1gsLeetin ' :
13 Meetings:
14 :eetings
15 Leetings:
20 M:etings
26 Meetings
30 ge:tines.
34 geetinrs:
Benelux - Canada (0
Brazil - United States (2
Canada - Czechoslovakia0 (C
China - Czechoslovakia 0 (C
China - United Kingdom 0 (O
France - India 0 (C
France - New Zealand 0 (C
France - Norway (0
France - South Africa (0
India - Norway (0
India - United Otates (1
Lebanon/Syria - United
Kingdom 0 (°
Canadaw- Nor'ay 0 (O
France - United States (2
Lebanon/Syria - United
States 0 (°
South Africa - United Kingdom
Benelux - France
Canada - France
China - United States
Auetralia - France
Norway - United States
Benelux - United States
Benelux - United Kingdom
France - United Kingdom
Czechoslovakia - United States
United Kingdom - United States
Cuba - United States
Canada - United States
. 5)
'5)
D1)
.1 )
.7)
. 5)
.1)
.3)
D.2)
7.1)
L. 4 )
.4)
.1)
.1)
.9)
).1 )
(3.8)
(4.2)
(0.3)
(1.3)
(0.7)
(o.6)
(3.6)
(5.2)
(3.1 )
(0.8)
(10.0)
(2.3)
(11.4) |
GATT Library | qn100dc5626 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Thirteenth Report by the Tariff Negotiations Working Party | United Nations Economic and Social Council, August 15, 1947 | United Nations. Economic and Social Council | 15/08/1947 | official documents | E/PC/T/176 and E/PC/T/169-178 | https://exhibits.stanford.edu/gatt/catalog/qn100dc5626 | qn100dc5626_92290223.xml | GATT_155 | 269 | 1,880 | UNITED NATIONS NATION'S UNIES UNRESTRICTED
E/PC/T/176
ECONOMIC CONSEIL 15 August 1947.
AND ECONOMIQUE ORIGINAL: ENGLISH
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT,
THIRTEENTH REPORT
by the
Tariff Negotiations Working Party.
During the fortnight ending 9 August the ten following
tariff negotiations were completed in their bilateral stage
bringing the total number of completed negotiations up to
22.
Canada - Czechoslovakia
Canada - Lebanon/Syria
Chile - Lebanon/Syria
Chile - New Zealand.
China - Czechoslovakia
China - Norway
Czechoslovakia - Norway
New Zealand - South Africa
Norway - United Kingdom
South Africa - United Kingdom \
It is to be understood that the results of these
negotiations are subject to any adjustment that may be
required in the light of other negotiations as they are
completed and are to be incorporated in the schedules to
be annexed to the General Agreement on Tariffs and Trade;
P.T.O. E/PC/T/176
page 2
further, the General Agreement, when arrived at, may be subject
to approval by the authorities of the countries concerned.
Nine other negotiations are reported by both countries
concerned to be nearing completion:
Australia - South Africa
Brazil - United States
China - France
China - United Kingdom
Czochoslovakia - India
Czechoslovakia - New Zealand
India - New Zealand
New Zealand - Norway
Norway - United States
Seventy-nine meetings of tariff negotiating groups
held in the same period bring the total number of meetings
held up to 9 August to 590.
The total number of bilateral negotiations has now reached
105, three new negotiations having been opened during the
current period. |
GATT Library | dw143mc1865 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Tweleth Report by the Tariff Negotiations Working Party | United Nations Economic and Social Council, August 1, 1947 | United Nations. Economic and Social Council | 01/08/1947 | official documents | E/PC/T/145 and E/PC/T/142-152 | https://exhibits.stanford.edu/gatt/catalog/dw143mc1865 | dw143mc1865_92290180.xml | GATT_155 | 237 | 1,638 | UNITED NATIONS NATIONS UNIES UNRESTRICTED
ECONOMIC CONSEIL 1 August 1947
AND ECONOMIQUE ORIGINAL ENGLISH
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
TWELETH REPORT
by the
Tariff Negotiations Working Party.
Reports received for the fortnight ending 26th July
show that five more tariff negotiations were completed in
their bilateral stage, bringing-the--total in this
category to twelve. These are the following:
Benelux - South Africa
Canada - India
Cuba - Norway
France - South Africa
India - Norway.
It is to be understood that the results of these
negotiations are subject to any adjustment that may be required
in the light of other negotiations as they are completed and
are to be incorporated in the schedules to be annexed to the
General Agreement on Tariffs and Trade; further, the General
Agreements when arrived at, may be subject to approval by the
authorities of the countries concerned.
In addition, ten other negotiations are reported by
both countries concerned to be. nearing completion:
Brazil - United States
China - Czechoslovakia
P.T.O.
P.T.O. E/PC/T/14 5
page 2.
China - Norway
Czechoslovakia - Norway
India - New Zealand
New Zealand - Norway
New Zealand - South Africa
Norway- United Kingdom
Norway - United States
South Africa - United Kingdom
81 meetings of tariff negotiating groups were held
during the fortnight ending 26th July, bringing the total
number of meetings to 5146. |
GATT Library | yc525jb2976 | Second session of the Preparatory Committee of the United Nations Conference on Trade and Employment : United States Delegation | United Nations Economic and Social Council, May 6, 1947 | United Nations. Economic and Social Council | 06/05/1947 | official documents | E/PC/T/W/23 and E/PC/T/W/23-81 | https://exhibits.stanford.edu/gatt/catalog/yc525jb2976 | yc525jb2976_90050148.xml | GATT_155 | 1,118 | 7,260 | RESTRICTED
UNITED NATIONS NATIONS UNIES E/PC/T/W/23
6 May 1947
ECONOMIC CONSEIL
AND ECONOMIQUE
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
UNITED STATES DELEGATION
The following amendments to Articles 15 to 23 and Article
37 of the New York Draft Charter are proposed by the United States
Delegation:
(l) Article 15 should be revised as follows (square
brackets indicate deletions, underlining indicates additions):
Nations Treatment on Internal Taxetion
and Resulation
1. The Members agree that neither internal taxes nor other
internal charges nor internal laws, regulations or requirements
should be used to afford protection directly or indirectly for
any national product.
2. The Products of any Member country imported into any
other Member country shall be exempt from internal taxes and
other internal charges of any kind higher than those imposed,
directly or indirectly, on like products of national origin.
Moreover, in cases in which there is no substantial domestic
production of likt products of national origin, no Member shall
impose new or higher internal taxes on the products of other
Member countries for the purpose of affording protection to the
production of competitive products. E/PC/T/W/23
page 2.
[3.] 2. The products of any Member country imported into
any other Member country shall be accorded treatment no less
favourable than that accorded to like products of national origin
in respect of all laws, regulations or requirements affecting
their internal sale, offering for sale, purchase, transportation,
distribution, exhibition or use of any kind whatsoever. The
provisions of this paragraph shall be understood to preclude the
application of internal requirements restricting the amount or
proportion of [an] any imported product permitted to be mixed,
.processed exhibited, or used, Provided that any such requirement
in force on the day of the signature of this Charter may be
continued until the expiration of one year from the day on which
this Charter enters into force, or, in the case of laws,
regulations or requirements relating to cinematograph films,
until the expiration of three years from the day on which this
Charter enters into force. [which period may be extended] Such
requirements may be continued for additional periods in respect of
any product if the Organization [concurs that the requirement
concerned is less restrictive of international trade then other
measures permissible under this Charter.], after consultation
with the other Members whose trade is substantially affected by
the requirement, determines that in the special circumstances
alternative measures permissible under this Charter would not be
practicable. Requirements permitted to be maintained under [the
foregoing proviso] this paragraph shall be subject to negotiation
for their liberalization or elimination in the manner provided
for in respect of tariffs and preferences under Article 24. E/PC/T/W/23
page 3
[4]. The provisions of paragraphs 1 and 3 of this Article
shall not be construed to prevent the applications of internal
laws, regulations or requirements, other than taxes, relating to
the distribution or exhibition of cinematograph films. Any laws,
regulations or requirements so applied shall, however, be subject
to negotiation for their liberalization or elimination in the
manner provided for in respect of tariffs and preferences under
Article 24.]
[5] 3. The provisions of this Article shall not apply to
the procurement by governmental agencies of [supplies] products
purchased for governmental [use] purposes and not for commercial
purposes such as resale [nor for] or use in the production of
goods for sale."
(2) A new Article should be inserted between Articles 15
and 16, reading as follows:
"Article 15A
The products of any Member country exported
to any other Member country shall not be subject to
any measure imposed by either the exporting or the
importing country requiring such exports to be
financed, shipped or insured by enterprises of any
prescribed nationality.
(3) Article 16: Delete the second sentence of paragraph 6.
(4) Article 17:.
A. Paragraph 1 of Article 17 should be revised as
follows : E/PC/T/W/23
Page 4.
"1. No anti-dumping duty or charge shall be imposed on
any product of any Member country imported into any other Member
country in excess of an amount equal to the margin of dumping
under which such product is being imported. For the purposes of
this Article, the margin of dumping shall be understood to mean
the amount by which the price of the product exported from one
country to another is less than [,](a)the comparable price for
the like product [to buyers] for consumption in the domestic
market of the exporting country, or, in the absence of such
domestic price, is less than either (b) the highest comparable
price [at which] for the like product [is sold] for export to
any third country [in the ordinary course of commerce], or (c)
the cost of production of the product in the country of origin
plus a reasonable addition for selling cost and profit; with
due allowance in each case for differences in taxation, and
for other differences affecting price comparability in the
ordinary course of commerce."
B. The second sentence of paragraph 2 of Article 17 should
be revised as follows:
"The term 'countervailing duty' shall be understood
to mean an additional or separate duty imposed for the
purpose of offsetting any bounty or subsidy..." etc.
C. Delete paragraph 6 of Article 17.
(5) Article 18: Delete sub-paragraph 2(c) and
re-letter (d) as (c).
(6) Article 19:
A. At the end of paragraph 1 of Article 19, add the
following sentence: E/PC/T/W/23
Page 5.
The Organization is authorized to investigate
and recommend to Members specific measures for the
simplification and standardization of customs formal-
ities and techniques and for the elimination of
unnecessary customs requirements.
B. Item (d) of paragraph 4 of Article 19 should be
revised as follows:
"(d) Foreign exchange [regulations] transactions;"
C. A new item should be added to the list included. in
paragraph 4, as follows:
"(i) Port facilities"
This wculd necessitate transferring the word "and" from
sub-paragraph (g) to the end of (h) and changing the period to
a comma.
(7) Article 21: In paragraph 3, line 8, add the words
retroactively or" after the word. "applied .
(8) Article 37: It is proposed that items (c), (d), (e),
(j) and (k) be removed from Article 37, which relates only to
Chapter V, and that a new Article be inserted at an appropriate
place toward the end of the Charter which would make these items
general exceptions to the entire Charter. It is proposed, that
the new Article contain the following introductory language:
"Nothing in this Charter shall be construed to
prevent the adoption or enforcement by any Member of
measures (the foregoing would be followed by a list
of the items transferred from Article 37). |
GATT Library | vp156nr2674 | Second session of the Preparatory Committee of the United Nations Conference on Trade and Employment : United States Proposal for a note on Article 23 | United Nations Economic and Social Council, August 14, 1947 | United Nations. Economic and Social Council | 14/08/1947 | official documents | E/PC/T/W/294 and E/PC/T/W/261-306 | https://exhibits.stanford.edu/gatt/catalog/vp156nr2674 | vp156nr2674_90050445.xml | GATT_155 | 242 | 1,704 | UNITED NATIONS NATIONS UNIES RESTRICTED
ECONOMIC CONSEIL E/PC/T/W/294
AND ECONOMIC 14 August 1947
SOCIAL COUNCIL ET SOCIAL ORIGINAL: ENGLISH
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
United States Proposal for a note on
Article 23
In connection with its proposal to delete
Article 23, the United Statas Delegation suggests
that the following note be included in the Report
of the Preparatory Committee:
"In omitting fron the Charter provisions
relating to boycotts, such as appeared in
earlier drafts, the Committee considered
that this problen would be most effectively
dealt with by the provisions of the Charter
relating to consultation among members and
to the possible nullification or impairment
of the benefits of the Charter."
DEUXIEME SESSION DE LA COMMISSION PREPARATOIRE DE
LA CONFERENCE DU COMMERCE ET DE L'EMPLOI
DE L'ORGANISATION DES NATIONS UNIES
Proposition des Etats-Unis relative à une note
au sujet de l'article 23.
Conformément à sa proposition de supprimer l'article
23, la délégation des Etats-Unis propose que la note suivante
soit insérée dans le Rapport de la Commission Préparatoire:
"En supprimant dans la Charte les dispositions relatives
au boycottage telles qu'elles existent dans les rédactions
antérieures, la Commission considered que ce problème serait
réglé de la façon la plus efficace par les dispositions de
la Charte qui ont trait aux consultations entre Etats Membres
et oui reglent les cas ou les avantages de la Charte se trouveraient infirmes ou compromis.
.
.
. |
GATT Library | qc577jc0202 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. -1- Fourth Meeting held on Monday, 14 April 1947 at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, April 14, 1947 | United Nations. Economic and Social Council | 14/04/1947 | official documents | E/PC/T/PV.2/4 and E/PC/T/PV2/3/CORR.1-6 | https://exhibits.stanford.edu/gatt/catalog/qc577jc0202 | qc577jc0202_90260193.xml | GATT_155 | 7,458 | 46,220 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
E/PC/T/PV.2/4.
SECOND SESSION OF THE PREPARATORY COMMITTEE
OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
FOURTH MEETING
HELD ON MONDAY, 14th APRIL, 1947
AT 10.30 a.m. in the PALAIS DES NATIONS,
GENEVA.
M. MAX SUETENS (Chairman) (Belgium)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (tel. 2247).
NATIONS UNIES A1 - 2 - E/PC/T/PV2/4
CHAIRMAN (Interpreted): We will take up again the discussion of a
general character. I now call on the Delegate of Chile.
B E/PC/T/PV. 2/4
M. Angel Faivovich SITZCOVICH (Chile) (Interpretation): Mr President
and fellow delegates, at the beginning of this second phase of
work entrusted to the Preparatory Committee for Trade and
Employment of the United Nations, the Chilean delegation which
represents a country, the economic and industrial development of
which is still in its beginning but which is proud of its
political and constitutional structure, my delegation is glad
to restate its willingness to contribute to the best of its
ability to the success of this Conference, the object of which
corresponds entirely to the policy which Chile has pursued in the
field of international relations.
At this time in the history of the world, there is no
economy which could survive independently, nor can there be any
strictly national economies. On the contrary, the increasing
inter-dependance between peoples leads them towards solidarity
of their interests, and towards the organization of world economy,
which is to further political peace between nations.
We agree, consequently - and we have stated this
opinion at the London Conference - to contribute to the gradual
elimination of any obstacles which are in the way of the policy
outlined by me. But it is necessary, we feel, to approach this
goal gradually and to base it on a mutual understanding between
nations. For those countries more particularly for those whose
economy is undeveloped it means as a necessary basis of such
policy a gradual increase of their industrial position in order to
satisfy the real legitimate and permanant interests.
We feel equally that the success of the international
Trade Organiaation is intimately linked up with the efficiant
functioning of the numerous international organizations which E/PC/T/PV*2/4
-4 -
have recently been set up and which are in close touch with the
financial, commercial and economic development of nations in the
world. The adequate functioning of this system of international
agencies would gradually bring about full employment, which is
one of the aims of our future organization, and it would afford
the working classes in the world conditions of life compatible
with human dignity.
The fundamental problem of Chilean economy, and I believe
this is equally true of many countries, is to increase its
production capacity in its various aspects in order to obtain a
permanent equilibrium of its balance of payments, thus increasing
the purchasing power which the country has for her
purchases abroad.
For Chile, exports oonstitute the essential element
of its economic life, since they afford for the country means of
payment for purchases abroad, and consequently determine the
volume of its imports and enables it to live up to its international
organization, and in the long run this is the decisive factor of
its monetary stability. These Chilean exports are constituted
in their major part by raw materials and imply that prices
paid for such goods are remunaritive and not subjected to
fluctuations on the international market. If this was not so,
it would be impossible for us to bring about the equilibrium of
our balance of payments and to achieve an adquate capitilzation
for the future development of the national economy.
Imports in Chile are not seriously hampered by customs
tariffs. The mainly difficulties which. we have experienced in
our country, which needs to import considerable quantities of
foreign goods which are urgently needed for the economic development B.3 .
E/PC/ T/PV.2/4
-5-
of our country, is the increasing rarity of foreign exchange,
which has been made more acute by the constant rise in prices of
our major imports. we note with pleasure that the proposed
Charter recognizes that under certain circumstances it may be
possible for certain countries to apply transitory measures.
We feel, furthermore, that besides these measures there my be
other measures of a broader nature which could be applied at
certain times without necessarily violating the basic principles
of the Charter. We wish to refer more particularly in this
respect to the most-favoured-nation clause which is, in the
proposed Charter, known by the term expansion of neighbouring
countries.
C C1
- 6 - E/PC/T/PV2/4
We agree that t.z equality of treatment ,ust be established
as an indispensable condition for the expansion of international
trade, but we feel also that in certain circumstances the economy
of yet undeveloped countries may join and be amalgamated so as
to form the first phase of their industrial development, and afford
to ,the other countries a mass of economies which would afford a
solid basis. This exception, as far as America is concerned,
anyhow, is not only on a firm economic basis, but it is also good
geographically, politically and historically, as its basis, which
one cannot ignore. If it is true that it is not advisable to
destroy existing unions, whether political or economic, it is
equally true that one cannot refuse beforehand any tendency which may
exist towards the formation of new economic units, the ultimate goal
of which would be a Customs union.
We have accepted to take part in the multilaterial negotiations
in order to show our intention to co-operate in all efforts which
may be made to find an equitable solution to all problems which
exist in the domain of international trade. We feel, however, that
in pursuing this aim, one must not lose sight of the necessity for
certain countries to develop their production, and more particularly
their industry, and this applies more particularly to the countries
which are as yet insuffictently developed. If this was not
applied one would obviously bring about in the world a system of
inequality between those countries already highly developed, and
those still undeveloped. We have thought it necessary to explain
very clearly our point of view in respect of the problems which are
brought before this Conference because we feel that both the Charter
and the multilateral treaty must contain just and equitable principles
which will guide international trade in future. If we recognise
those principles we will do justice to the will of co-operation
between the countries here represented and will make it easier for - 7 -
E/PC/T/PV2/4
other countries to join us in our common effort.
CHAIRMAN. (Interpretation): I now call on the First Delegate: from India.
THE HON. Mr I.I. CHUNDRIGAR (India): probably in no country has the
work accomplished by the Preparatory Committee at its first session
evoked greater public interest than in India. With the basic idea
of an international charter for the regulation of commercial policy
there has throughout been in my country deep and genuine sympathy
and appreciation has been spontaneous of the inspiring lead given,.
in this, as in other sectors of the economic and moneta y.fields,
by that great and distinguished country, the United States of Ameri.a,
By our standards, however, earlier versions of the Draft Charter
suffered from undue rigidity and a certain narrowness of outlook, and
opinion in India has been insistent that an International Commercial
Charter, if it is to be of permanent value,s,Should, whilst providing
an enduri g'basis of international collaboration, be flexible
enough to enable all countries, whatev r-the r.size, degree of
economic development or political importanc : o. attain to their
full economic stature.
In the recognition of this prcnaiple - a principle to which under-
developed countries attach special importance - lies, I believe, one
of the. outstanding achievementsfo0 the first session, and the
afPrt Charter, in the form in which it s' now being presented to us
4 -all the richer for the incorporation in it of the n ewchapter on
Industrial Development. The economic development of the less
advanced countries is no ngb er to be the exclusive concernfo
responsibility f those countries butsi& to benai international
obligation. The removal or reduction f trade barriers, however
essential. to the expansionof world trade, is only neB aspect of.
the problem confronting us, the more positive and constructive aspect
being to promote development both as an end in itself and as a means 03
- 8 - E/PC/T/PV2/4
to increased trade. With this new understanding, the I.T.O.
will find its proper orientation, not merely as a sort of
international policeman, watchful of the conduct of countries in
their observance of accepted regulations, but fulfilling a positive
role as a guide in the developmental programmes of countries seeking
its help, this is not to, s y that perfection has been imparted to
the 'draft Charter. Far from it - there are still a number of
divergent views to be reconciled and conflucting aims to be
harmonised, but the signal success achieved at the London Conference
encourages me to hope that we shall be able this, the Second
''Session, to settle all outstanding issues in a spirit of sympathy
and understanding
I am anxious that our advocacy of the cause of under-
developed countries should not be interpreted to imply that we are
wedded to a policy of blind protectionism. The old theory of "once
protected, always protected" has had no application in India.
Though the relevant criteria have varied from time to time, there
has always been a, considerable element of selectivity in the choice
of industries to be protected; more important still, decisions on
the quantum of protection to be granted and the period of protection
have been based on the findings of semi-judicial enquiries. It is
worthy of note that we are now, without seeking counter advantages
from other countries, contemplating the withdrawal of protection from
certain of our major industries. I say this merely to emphasise that
the protectionist policy we have in view is a sane and rational one,
designed to safeguard our legitimate interests, and not to suggest
that we can dispense with tariffs or with other necessary aids to
protection. Tariffs are in any case essential to India for revenue
reasons, while she may on occasion find it necessary to have recourse
to other forms of protection if they prove to be on the whole less C4
- 9/10 - E/PC/T/PV2/4
burdensome to the interests affected and to the community at large.
Nevertheless, we shall approach the tariff negotiations in a practica
friendly and constructive spirit, though we hope it will be
appreciated that inadequately developed countries may not be able to
offer tariff concessions to anything like the same extent as the fully
developed countries, and especially those with high tariffs, can and
should India to-day is entering on a new, and what we Indians all
fervently hope will be a glorious chapter in her long history. We know
that the thoughts and good wishes of all our friends, and especially
of those with whom we have for long been intimately associated, are
with us; but we know, too, that our future is now for us alone to
fashion. Great and urgent tasks await us, no least in the economic
sphere. Our masses have for long lived in squalor, poverty and
ignorance. To make life more tolerable for them, in a material and
social sense in particular, is one of our immediate objectives.
Translated into terms of human effort, this means the undertaking of
a scheme of economic development on a scale never before attempted
or thought of in my country. At no time, therefore have we felt
more acutely than now the need to retain in their plenitude the
economic-powers that we are now free to exercise. Nor, when saying
this, can we be accused of taking too parochial view of our
responsibilities, for who shall deny that service to found hundred
million human beings is service to all mankind?
D. D.1 E/PC/T/PV2/4
Nor, when saying this, can we be accused of taking too par-
ochial a view of our responsibilities, for who shall deny
that service to four hundred million human beings is service
to all mankind? We are, nevertheless, deeply conscious of
the fact that we are of the World, not apart; faith in inter-
national co-operation is almost traditional with us; and we
realise, none better, that economic prosperity, like peace,
is one and indivisible.
Therefore, consistent with the obligations that we
owe to our own people, we are prepared, and indeed are anxious,
to make our full contribution to the creation of a better world
economic order. It is in this spirit that we of the Indian
Delegation shall enter upon the di scussions that are about to
begin, and we are confident that with so much goodwill displayed
on all sides towards the common cause, the united labours of
the Nations represented at this Conference will not be in vain.
CHAIRMAN: (interpretation) I now, call upon the representative of
the International Chamber of Commerce.
MR. WALLACE B. PHILLIPS (International Chember of Commerce) Mr.
President and Gentlemen, as a representative of the International
Chember of Commerce, it is again my privilege and pleasure to
address the Delegates to this Preparatory Committee.
In the course of the last Session of the Economic and
Social Council, the President of the Council reaffirmed the
conviction of the leaders of the United, Nations that both the
advice and the support of non-governmentl organizations were
indispensable to the successful operation of the official organs
of the United Nations. The International Chamber of Commerce
is therefore glad to offer its views to this important meeting,
for its success will be a vital factor not only in the future
development of the world economy but also in the establishment
of an enduring peace.
Following the London meeting, many technical committees
of the International Chamber working in a number of countries
devoted much study and thought to the conclusions that had been
reached by your committee. The men comprising these committees
are among the great business leaders in their respective count-
ries and are all deeply concerned with and desirous of seeing D.2.
-12-
E/PC/T/PV2/4
the earliest possible resumption of international commerce freed
from the tiresome and restrictive rules that are still the order
of the day.
The results of the study of these combined committees were
collated by our economic staff in Paris and have resulted in a
considered document approved by the Executive Committee of the
International Chamber of Commerce, which document has been sub-
mitted to you, through the Secretariat, for consideration and
such action as may be deemed pertinent.
We have takin the liberty to comment on and discuss at
very considerable length many of the articles in the draft Charter-
in some cases expressing completely divergent views and in other
instances suggesting additions, in the case of capital movements
and conciliation and arbitration we have ventured to outline a
new approach to these questions.
The International Chamber's full report is based upon
three fundamental postulates. First, the objectives we all
share of higher standards of living and greater welfare for the
peoples of the world can be attained only if there is a consider-
able expansion of international trade. Second, this expansion
is possible only if the international movement of goods and
capital is allowed to develop with maximum freedom on a multi-
lateral basic . And last, but by no means least, the full expan-
sion of trade and economic activity can be achieved only if the
widest possible scope is given to the energy and initiative of
the individual producer and trader.
In the contacts which the officers and members of the Inter-
national Chamber are privileged to have, with many of the Delegates
here assembled, we have gained the impression that it is the
desire of the Economic and Social Council, as well as of this
Committee, to encourage the Chamber to. make suggestions that are
constructive and can contribute to your deliberations. Itis with
this thought in mind that the International Chamber of Commerce
is submitting its report which expresses a consensus of industrial,
commercial and financial opinion in more than thirty countries.
This collective thinking may, we hope, offer, suggestions that you
will find acceptable. .
The International Chamber, as an organization, has no con-
cern wi h the' d tails' of the confidential tariff negotiations
that are about to commence, but its membership hae a deop
concern in their success and hopes teat tho movement of goods
and onpital will be thereby freed from the burdensome restrictions D.3. -13- E/PC/T/PV2/4
under which they are at present laboring.
During the course of this Conferenceo the International
Chamber will maintain a liaison office in Geneva with its
Assistant Secretary General in charge, assisted by an experienced
economic adviser. These representatives, as well as leaders of
the International Chamber, will be available for consultation
throughout the Conference.
In conclusion, may I thank you Mr. President, for having
afforded me tne opportunity to address the Conference and to
make these few explanatory remarks, and may I express the
International Chamber's heartiest good wishes for your success
in establishing the Charter of a vigorous and effective inter-
national trade organization. E/PC/T/PV.2/4
- 14 -
Mr. MOUSA MOUBARAK: (Lebanon): The Lebanese delegation of which I have
the honour to be the President,is glad first of all to congratulate
all members of this Preparatory Commission on Trade and Employment
in the resultse obtained at London and New York. All delegations
represented here in this Preparatory Committee have shared a
responsibility in the success achieved so far. In view of its
geographical position at the cross-roads of communication between
East and West, Lebanon is, by its very nature, a country of
In all times Lebanon has been in favour of freedom of commerce and
development of exchanges. History tells us that our forefathers
have been first navigators and also pioneers in international trade.
It is consequently fitting and normal that we should be in these
modern times also in favour of free trade. Exceptional
circumstances have, at certain times, made it difficult for us to
follow this policy in all its lines. We are consequently
favourable in principle to world international co-operation which
would tend to liberate trades in the world and do away with
existing restrictions.
One should however recognize that it would be necessary
for a young country, a still undeveloped country such as my own,
to take up when the time is come the modality of application
of certain of the clauses contained in the proposed text. I
should like however to make it perfectly clear right now that it
would not be possible for a country like mine to change rapidly
the existing system of our economy. A period of transition seems
to be indispensable for us, all the more as modern economy implies
a constant and careful control by the state authority over such
economies. I fully understand the legitimate concern of certain
chiefs of delegations who consider it worth the utmost care, the E/PC/T/PV.2/4
total and immediate adoption without any reservation of all the
measures which have been contemplated by the Preparatory Committee.
For some time to come Lebanon will be obliged to follow the policy
of prudence which I have outlined and this will be done in order to
.ensure the equilibrium of our balance of payments by the power of
our currency and in order to enable us to give a sufficient amount
of foreign exchanges for the needs of our national equipment.
The Lebanese delegation is convinced that the transitory
measures far from hampering the interests of United Nations will
contribute to improve their situation, for their main object is to
contribute to the development of the Lebanese market, and will
consequently increase the purchasing power of my country. One of
the aims of the Charter of the United Nations is to contribute to
the economic development of its members and to favour the raisin
of the standard of living of all the people. This development
however, has not reached the same degree in all countries. It is
consequently in the interest of the Nations which have not yet
achieved a certain degree of economic development, to be able to
reach it gradually and thus to contribute to the well-being of
their populations.
F. - 16 -
Thus we will contribute not only to increasing the purchasing power
but also to maintaining the economic stability which is the basis
of a lasting peace.
I wish to thank this meeting for having admitted the
participation of Syria to the work of the Preparatory Committee,
taking into account the fact that Syria is part of the customs
union which exists between the Lebanon and that country. I
hope sincerely that the participation of Syria in the work of
this Preparatory Committee will contribute to the ultimate success
of our tariff negotiations. Lebanon is linked to Syria by a
customs union based on the mutual respect of our countries and
the independence of thos two countries. Wa have joined this
Conference in the hope of being able to contribute with loyal
co-operation to the success of this Meeting. I hope this will be
taken into account in our negotiations on certain final consi-
derations due to the fact that in our two countries receipts from
customs duties still represent one of the main sources of our
budgets. In the same way the necessity for us to protect a certain
number of goods of our young industries will be a guiding principle
in the negotiations which our two countries will conduct here.
I must point out the legitimacy of this principle has been recog-
nised by the London Conference in the draft charter of the Inter-
national Trade Organisation. Finally, our close contacts with
all other Arabic countries and other countries in the Near East
make it compulsory for us to interpret loyally to them the wishes
of members of the United Nations in this part of the World. We
know that we may count on your spiriti of co-operation to appreciate
the difficulties of our task and the peculiar problems with which
we are faced in our part of the world. We have started on a work
of primary importance. The success of our work depends on the
degree of loyalty and mutual understanding which is shown.
E/PC/T/PV2/4.
F1 E/PC/T/PV2/4.
Lebanon for one is prepared to co-operate with all of you sincerely
and firmly.
CHAIRMAN(Interpreted): I now call on the First Delegate for Cuba.
MR. I. Sergio CLARK (Cuba): Mr. Chairman, Ladies and Gentlemen,
We are about to enter into the more advanced stage of the work that
we commenced in London almost six months ago. This Second Session
of our. Committee will probably be more laborious and complicated
than the first - I purposely avoid using the word difficult. But
I am certain that all will agree that the fruits that we shall reap
if we succeed - and we must succeed - will amply justify our
efforts.
We have travelled a long and most promising road since
the original "Proposals" were first put forward by the American
government. The daring and brilliant work done by our colleagues
from the United States was completed and improved by the contri-
butions made by everyone of us in London.
From that meeting there cam out a document further
improved at New York - which is more comprehensive of the problems
we are dealing with, has a bettor balanced and a more realistic
approach to them, and offers a much more workable instrument for
the attainment of our common goals, namely, an expanded world trade,
a fuller degree of employment in all countries, and a fuller and
better balanced economic development of those countries which have
not reached, as yet, the degree of industrialisation which is
essential to the well being of their people.
It is a most important, in fact, an indispensable condi-
tion for our success here, that the tariff negotiations we are
going to undertake, be carried out with the same spirit that pre-
vailed at the London meeting, the spirit which alone made possible
the high degree of agreement we were able to reach there.
-17 -
F2 F3
- 18 -
E/PC/T/PV2/4.
We believe that the negotiations we are about to begin
will be the test as to how real and sincere is the agreement on
principles we have already reached, a test as to whether the Inter-
national Trade Organisation can actually be set up to govern the
economic relations of our countries. For the time has now come
to put to actual work a very important part of the principles that
we have in general accepted, and of the rules that we have gener-
ally recognised as just and suitable to govern our commercial and
economic intercourse.
For my country, so very largely dependent for its well-
being on a prosperous and expanded world trade, the stake is very
great. During the last few years we have expanded our foreign
trade to, a considerable degree, making a most vital contribution
to the efforts of the United Nations in the conduct of the work
and satisfying a considerable part of the world demand for many
products. .Today we are the largest sugar-producing country and we
also export great quantities of the best tobacco that is consumed
in the world. On the maintenance of our exports of sugar, tobacco,
alcohol, molasses, cordage, minerals and a diversity of industrial
products, depends to a very large, extent the standard of living and
the degree of employment of our population.
Cuba depended principally on her own domestic industrial
production during the dark days of the last war. The severe hard-
ships suffered by our people during the deflationary years of the
thirties, and those they are still suffering today, have forced the
Cuban people to diversify agriculture and increase industrialisation,
Today Cuba produces not only sugar and tobacco: we are growing sub-
stantial amounts of fruits, vegetables, grains, milk and dairy pro-
ducts, poultry and various other foodstuffs, Our industries of
shoes, leather goods, textiles and others, satisfy today a very
substantial portion of our domestic demand.
This second recent development in our economy we are F4 - 19 - E/PC/T/PV2/4.
necessarily determined to preserve and to foster. In our case, this
determination springs not from a desire to reduce our foreign trade,
nor to curtail the imports from other countries. We shall always
need to import a great diversity of manufactured products and raw
materials, Besides , our experience shows that our internal develop-
ment fosters the exchange of goods with other nations instead of
reducing it. The development of a more diversified and better
balanced economy is a condition for the economic stability of our
country and for the attainment of a fuller and a more stable employ-
ment. We sincerely fool that these two different aspects of our
economic development are not contradictory to each other and far
from contradictory to the principles of the Charter we have almost
completely drafted.
We have one of the lowest tariffs of all countries repres-
ented at this meeting, and we are not here in a spirit of betrayal
of our liberal traditional policy in the conduct of international
trade We feel that we can fully make our contribution to the common
goal. But we very definitely expect that our contribution be rightly
understood and appreciated, taking into consideration all the aspects
of the problems and needs that we have, that is to say, honouring,
in the actual negotiations, the principles and rules embodied in the
Charter as a whole We very strongly feel that in order to give those
principles more meaning and to make them more effective, it is
necessary to expand Chapters III and IV of the Draft Charter setting up
specific rules for the implementation of the principles there stated.
It is also essential that the General Agreement on Tariffs and Trade
contain, to the largest possible extent, the principles embodied in
those two chapters and the rules that we suggest should be drawn to
Implement them. F4 - 19a - E/PC/T/PV2/4.
If the spirit of the Draft Charter is observed by every-
body here present, in the conduct if the negotiations, and in the
drafting of the General Agreement on Tariffs and trade, I am
certain that we will succeed in our task, Our efforts and even
sacrifices to achieve economic stabilisation and security will
stand the test of comparison with these that can be made by any
other nation. But no country should, think that it can sell to
others without buying frm then, nor that it canachieve and
maintain high levels of employment and standards of living, without
giving the others the same opportunity.
It is necessary to put an end as rapidly as possible
to the inflation sharing in all countries. If the United Nations
cannot defeat the present infationery trend the inflation will
defeat our goal of economic peace and security. Ina world so
interdependent as we live in, no nation could escape the disaster
that would follow should we fail in our task To the success of
that task, so vital for the future of all the people of the world,
I pledge, in the name of Cuba, the best .and untiring efforts of
our Delegation, Let us set ourselves to the task with faith and
decision. C.1
E/PC/T/PV.2/4
-20-
CHAIRMAN: I now call on the chief of the Brazilian delegation.
H.E. MINISTER ANTONLOE DE VILHENA FERREIRA BRAZA (Brazil) (Interpretation)
Mr. President, the importance which Brazil attaches to the
Conference on International Trade and Employment is well evidenced
by the reference to it contained in the recent message of the
President of the United States of Brazil at our National Congress.
The Brazilian government is convinced that the object
of these meetings will be to establish such rules as to enable
us to free international trade of all obstacles, whether official,
or private, which have hampered it untill now. We are equally
convinced that all the nations represented in this meeting of
the Preparatory Committee will do their best to devise such means
as to enable each country to unite to the fullest extent possible
their means of production and to increase the standard of living
of their populations.
The Charter of the International Trade Organization,
which it will be our duty to frame, will probably also contain
certain basic principles which should guide international
relations in the sphere of trade and commerce and will also
contribute to establish the basis of an internation economic
system in which the interests of all countries will be finally
organized.
Our co-operation in order to achieve this aim has
already been reaffirmed and restated by the Brazilian delegations
which have taken part in the previous meetings of this
conference. I am particularly glad to be able, at this opening
session of the conference, to recall the valuable contribution
which the United States of America and the United Kingdom have G.2
//E/PC/T/PV.2/4
- 21 -
made to our common efforts by their preparatory studies and their
discussions on post war economic problems.
The Brazilian delegation considers that the results of
the negotiations which have taken place in London, and of the
meetings which have since taken place in New York, justify the
full confidence of all the delegations here represented in the
final success of our work.
The Brazilian delegation feels that the improvement of
world economy depends to a large extent on the agreements which
we will be able to conclude here. The development of trade
currents is a factor of the essential importance for the prosperity
of the nation and the fundamental basis of lasting peace.
H We feel, furthermore, that the reviving of world economy and the
guarantee of full employment is closely linked up to the problem of
the development of yet undoveloped countries. The more these
countries will be able to develop their economies the more the
already developed countries will be able to develop their exports.
The economic interdependence of nations is demonstrated by the
mere fact that that solution of the problems of under-production and
unemployment will not be possible as long as the purchasing power
of the other countries is not increased.
This establishes the necessity for sincere and complete
co-operation between all nations of the world. In the long run,
the final problem will always be to increase purchasing power
both of the highly developed countries and of those which are not
yet developed. Brazil, which is a country which supplies mainly
raw products and basic products, and the foreign trade of which re-
presents a large portion of its purchasing power, is fully aware
that all these problems hare been already considered by the London
Conference. Let us hope that at our Geneva meeting the consideration
of these problems will be still improved and developed. Negotiations
concerning tariffe constitute one of the main pieces of our whole
machinery. As regards this question. I should like to note that
Brazil has already gone forward in the way pointed by this Conference.
Brazil's tariffs, in fact, have not been increased during the war
and the depreciation of her national currency has had as a result
that these tariffs have gone down. Consequently and conforming
to the principle which provodes for the mutual concessions which
we are here to negotiate, we raserve the right for us to adjust our
tariffs until such point where they would not imply a
of our tariffs. Mr. Prosident, we have gathered to work for the
future; on the results of thiis Conference depends to a large extent
the progress of the nations and the advance of civilisation. H2
E/PC/T/PV2/4
CHAIRMAN (Interpretation); I wish to inform the meeting that as there
are only two speakers left on my list, and that all of us are anxious
to complete our discussions this morning, we shall continue until
those two delegates have spoken.
I now call on the Head of the Czechoslovak delegation.
Mr. ZDENEK AUGENTHALER (Czechoslovakia): Mr. Chairman, Ladies and
Gentlemen: We had the opportunity to listen until now to a series of
very interesting delcarations made by the Heads of delegations of
different countries as well as of that made by the representative of
the World Federation of Trade Unions. They have give us a quite
comprehensive picture of different aspects of the problems we are faced
with and of the views of different countries as they result out of
their social and economic structure and I would add also out of
conditions which are determining their internal and external economic
policy. As I already had the honour to state in London, no country is
entirely master of its international trade policy which is a result of
a multitude of circumstances. One of those, of course, is the
geographical position of a country. For instance, Czechoslovakia is a
direct or indirect neighbour of some enemy or ex-enemy countries like
Germany, Austria, Hungary, Rumania and Bulgaria and of important allied
countries like Poland, Soviet Russia and Yugoslavia. It is quite clear
that the economic situation and possibilitities of those countries must
be taken in account if we are formulating our own international trade
policy.
May I. now, Mr. Chairman, try to elucidate a little my view on
the tasks which lie before us in this Conference. Some time ago I had
an opportunity to visit a large telephone factory. A telephone is more
or less an instrument enabling the free flow of speech - pleasant as well
as unpleasant talks sometimes - and I sincerely admired the tremendous
amount of human knowledge, intelligence and skill which had to be H3
24 E/PC/T/PV2/4
accomplished before we get, as sometimes happens to us,/wrong
number. I could see how many installations and machineries are
necessary before the free flow of speech can be materialised.
It seems to me that something verys similar applies to our work,
which aims at developing as free and beneficial flow of goods
among nations as possible. We shall need a huge amount of tact,
mutual understranding, knowledge and skill to enable us to achieve
our task and I hope that when this complicated machinery shall be
completed we shall always get right numbers and not wrong ones.
Anyhow, I feel that here ends the comparison between the telephone
and our work, because we have to deal with life itself, in all its
social and economic forms. No doubt we are living in great times,
when many things are changing around us and inside us and when
even words and notions are changing their meaning. That is why
in our view this flexible instrument cannot be substitute by any
itp
slogan, as attractive and simple as/may seem, and that any
instruments-which have to govern the relations between different States
and types of economies must be elastic enough and adaptable, to the
evolving and changing world.
We are confident that it is possible, especially when all, the
present countries will put, as they did until now, into the work
the great amount of knowledge, experience and goodwill they are
presenting here, Czechoslovakia, for her part, was from the
beginning and is to-day as well ready to do her best; when we
were lately reintroducing the Czechoslovak custom tariff we did
not use the possibility we had to adapt our custom duties to
the present purchasing power of the Czechoslovak. crown but we
remained far behind our real pre-war tariff protection.
To the countries represented here, it means that their.
exports into Czechoslovakia are to-day charged by custom duties
on the average less than one -half of the pre-war scale. H4
25 E/PC/T/PV2/4
As the Honourable Delegate for Norway, Mr. Colban, said in
his speech, neither will I spend any more of your previous time
because we think that the earlier we start our work on concrete
problems the more could be done at the present Session.
I. E/PC/T/PV2/4
CHAIRMAN: (Interpretation): I now call upon the Head of the
United States Delegation:
MR. CLAIR WILCOX (United States of America): It is a matter of
regret that the Chairman of the Delegation of the United States,
Mr.W.L.Clayton, Under Secretary of State for Economic Affairs,
was unable to be present for the opening of this meeting. He
is now on his very to Geneva and should be with us by the middle
of the week. The statement that I shall make, on his behalf,
is brief.
In the speech which he delivered at Waco,Texas. on the
sixth of March, the President of the United States made clear
the great importance which he attaches to the success of this
meeting.. Speaking of the preparation of a Charter for an
International Trade Organization, he said: "The progress that
has already been made on this project is one of the most heart-
ening developments since the war. If the nations can agree
to observe a code of good conduct in international trade, they
will co-operate more readily in other international affairs.
Such agreement will prevent the bitterness that is engendered
by an economic war. It will provide an atmosphere congenial
to the preservation of peace." And speaking further of the
negotiations directed toward the reduction of tariffs, the
elimination of other restrictive measures and the abandomment
of discrimination, the President went on to say: "The success
of this program is essential to the establishment of the Inter-
national Trade Organization, to the effective operation of the
International Bank and the Monetary Fund, and to the strength
of the whole United Nations structure of co-operation in economic
and political affairs. The negotations at Geneva must not fail."
These last words may be taken as the message of the President
to this meeting: "The negotiations at Geneva must not fail. "
During the months that have intervened since the first
meeting of this Committee, the Government of the United States
has completed its preparation for the work that is about to
begin. As a part of this preparation., it carried the London
draft of the Charter to the American people and asked for their
advice. In informal conferences and in public hearings, held
in seven cities, testimony was received from some 250 persons
representing business, labor, agricultural, consumer, civic and
religious organizations from twenty states. This testimony
I.1. revealed a careful and sympathetic appraisal of the document and
brought forth a number of thoughtful suggestions for its clari-
fication.and development. More recently, a committee of the
United States Senate subjected the Charter to a detailed and
painistaking, analysis. And, in the course of this inquiry,
additional suggestions for the improvement of the draft were
made.
As a result of these suggestions, the American delegation
is prepared, at the appropriate time, to present a number of
proposals for amendment. All of these proposals, I may add, are
in the spirit of the Charter and are consistent with the purposes
upon which we are all agreed.
The other part of our preparation for this meeting has con-
sisted of steps leading up to definitive negotiations on tariffs
and other barriers to trade. It will be recalled that this
Committee had agreed, at its meeting in London, upon the pro-
cedures that were to be followed at each stage of this work. At
the first stage, each Member of the Committee was to "transmit
to each other Member ... a preliminary list of concessions which
it proposes to request....." This we have done. At the second
stage, "each Member should submit a schedule of the proposed
concessions which it, would be prepared to grant to all other
Members in the light of the concessions it would have requested
from each of them." This we are now prepared to do.
The basis of these negotiations is set forth in the London
Memorandum in the following words:
"Article24 of the Charter provides that tariff negotiations
shall be on a 'reciprocal' and 'mutually advantageous'
basis, This means that no country would be expected to
grant concessions unilaterally, without action by others,
or to grant concessions to others which are not adequately
counter-balanced by concessions in return."
It is on this basis that the United States is now prepared to
proceed.
As soon as the Committee is ready, in accordance with the
procedure upon Which it has agreed, to enter into actual nego-
tiations, whether they be on the text of the Charter or on the
details of trade concessions, we shall be ready to participate.
It is our hope that these negotiations will be initiated at the
earliest possible moment and carried forward with the greatest
-27-
E/PC/T/PV2/4
I.2 . I.3. -28 E/PC/T/PV2/4
possible dispatch. We realize, of course, that the magnitude
and the complexity of this undertaking are without precedent.
But we know, too, that this Committee has already earned for
itself a reputation for quiet industry, steady progress, and
the prompt completion of an appointed task - a reputation that
gives ground for confidence of achievement in the weeks that
lie ahead.
CHAIRMAN: (Interpretation): Before we proceed with the trans-
lation of Mr. Wilcox's remarks, I would like to call upon the
delegate of France who has, I understand, a declaration to make
in the name of his Government - a declaration which may be
interesting to everybody.
M. ROGER NATHAN (France) (Interpretation): France is struggling
with great difficulties. However, she works as hard as she
can, and she has the advantage of the vicinity of Switzerland.
Therefore, in order to permit the delegations to have a better
view of what France is doing, the Mayor of Lyons would be very
happy to welcome the delegates on Saturdry and Sundy next. Two
special trains will be put at the disposal of the delegates
and they will be able to spend part of the days of Saturday and
Sunday in Lyons. Either on the way there or on the way back
they will stop at the Venissieux Dam in order to inspect one
of the new dams of France.
You are kindly requested to get into touch with the Secretaria
of the French Delegation, Room 320, Telephone No.23.77, if poss-
ible this very afternoon.
J/K. - 29- E/PC/T/PV2/4.
CHAIRMAN (Interpreted): As already announced, we will now
suspend the course of our public meetings, The Commission will
meet at an early date and you will be informed of the date when
that will be possible, to take into consideration Point 5 of our
Agenda, in Executive Commission.
The meeting is adjourned.
The meeting rose at 12.45 p.m. |
GATT Library | gr373kk2646 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Eighteenth Meeting of Commission A held on Wednesday, 25 June 1947 at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, June 25, 1947 | United Nations. Economic and Social Council | 25/06/1947 | official documents | E/PC/T/A/PV/18 and E/PC/T/A/PV.18-20 | https://exhibits.stanford.edu/gatt/catalog/gr373kk2646 | gr373kk2646_90240120.xml | GATT_155 | 4,439 | 26,593 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL RESTRICTED
E/PC/ T/A/PV/18
ECONOMIQUE 25 June 1947
ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
EIGHTEENTH MEETING OF COMMISSION A
HELD ON WEDNESDAY, 25 JUNE 1947 AT 2.30 P.M. IN THE
PALAIS DES NATIONS,
MAX S UETENIS
(Chairman)
GENEVA
(Belgium)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247).
NATIONS UNIES E/PC/T//A/PV/18
CHAIRMAN (Interpretation): Gentlemen, the meeting is
called to order. We resume the discussion on Article 33. The
first speaker on the list is Mr. Deutsch, the delegate for
Canada.
MR. J.J. DEUTSCH (Canada): Mr. Chairman, I wish very
briefly to indicate the attitude of the Canadian delegation to
the New Zealand proposal. The delegate for New Zealand emphasized
particularly that the Charter should be developed in such a way
that it would accommodate the different types of economies of
countries whom we would wish to have Members of the I.T.O. To
our mind, Mr. Chairman, the Charter does that now. The Charter
is a compromise between economies which depend very largely -
operate very largely - on the basis of private Enterprise and of
economies that employ varying degrees of planning. That compro-
mise has, by and large, been worked out and with that we agree -
that it should be a compromise.
The delegate for New Zealand pointed out that countries
should, within the confines of the Charter, be able to plan their
full employment programmes,to plan their development programmes,
and he said also to plan their foreign trade. It seems to us
in the first instance that nothing in the Charter would rule out
the adoption of programmes of full employment in any country;
indeed, the Charter requires Members to undertake certain obli-
gations in that respect about maintaining full employment and
the implications of that are recognised in various parts of the
Charter, and particularly in the vital Balance of Payments Section.
The programmes countries may wish to adopt regarding development
are also recognised. In the present Chapter IV specific recogni-
tion is given to the objectives of countries to promote the
development of their economies and, with respect to the matter P.
- 3 - E/PC/T/A/PV/18
of planning foreign trade, the instruments of tariffs and
subsidies are permitted and, in certain exceptional cases, cases
where it can be demonstrated that certain devices are necessary
suh as quantitative restrictions, even those are permitted.
So it is permitted to every Member of the Institution to plan
its foreign trade by means of tariffs and subsidies; and there-
fore the only weapon in which there is a general limitation,
that is, the only device where there is a general limitation, is
the one concerning quantitative restrictions; and we for our
port feel that the device of quantitative restrictions is the
one device which is capable of the most destructive effact
upon world trade, and for that reason we feel it is important
that limitations shall be laid down regarding the use of that
particular device - limitations which in almost every case
impose certain sacrifices upcn the countries concerned. Every
country makes sacrifices in adhering to those limitations, but
we agree that these sacrifices are necessary for the common good,
and unless we are all prepared to make the sacrifices involved
in those limitations we cannot auhieve the aims which we are
seeking to attain.
Now the New Zealand proposal would in effect create a very
large loophole in that rule regarding the use of quantitative
restrictions. It would be a major breach in that rule and that
we cannot accept.
In brief, Mr. Chairman, we feel that the aims of the
New Zealand delegation are recognised in the Charter at present. P.
4. E/PC/T/A/PV/18
They may not be met quite in the details desired but that is
something that can be examined, and we egree that that should
be examined by the Sub-Committee. But as for the specific
proposal of New Zealand which really would involve. a very
major ohange in one of the fundamental principles of the
Charter, that we could. not accept. If, however, the particular
details at present throughout the Charter can be modified,
perhaps, to make the present provisions more Applicable to
New Zealand, we would be prepared to accede to that undertaking
but the specific proposals which New Zealand. is now proposing
we could not accept. E/PC/T/A/PV/18
CHAIRMAN (Interpretat ion) Mr. Coombs..
Dr. H.C. COOMBS (Australia): It tous almost without saying
that the Australian delagation is in the strongest sympathy with the
domestic policy outlined by the delegate for New Zealand out of which
the problem he has presented to the Conference arises, the policy
of the maintenance of high levels of .employment and effective demand.
The policy of the progressive and concentrated development of the
resources of the country which cheacterise the New Zealand policy,
are, we believe, not only, sound policy, but also provide the first two
pre-requisites of an expanding volume of world trade. So long as
the levels of demand are maintained. at the maximum, and so long as
the resources of the country are being progressively developed in a
way which increases the purchasing power of the. economy for domestic
and internationally purchesed products at loast two of the most
important requirements of expending world trade have been fulfilled.
The New Zealand delegate has pointed cut that his country is one of.
the greatest traders in -the -orld 'n pr:onrtion I its size. I
cbink we would als say we would feel perhaps less concerned for the
future of world trade if we were confident that other countries of
the world would maIation a similar Approach to at last these re-
quirements.
It is necessary to say, howevar, that important as those two
requirement centainly are for the expension of world trade, they do
not represent the what-: L :: i-r .mnt , It might be possible
for them to be fulfilled and for there to take place at the same time
developments which might lead to a construction of trade, and to a
reduction in standards of productivity, end therefore to a reduction
of standards of living throughout the world, if, by their unwise
interpretation, they lend to a destruction of the specialisation
between the countries upon which the highest level of productivity
does depend. I think it is in this particular requirement that the
difficulties of the New Zealand problem arise.
L.. E/PC/T/A/PV/18
In our discussions in London, I think it is correct to say that
we had the problems and types of economy of New Zealand very much
in mind. We recognise that the maintenance of high effective
levels of demand and a policy of internal development could, and in
fact were very likely to, produce difficulties in the international
payments of the country concerned - so much so that it was essential
that the provision should be made for that country to plan or to
control, whichever word you like to use, its international trade,
Then, it enoounttzbalance-of-payments difficulties which we
recognize would be almost inevitable in small country, particularly
where it had a substantial overseas debt where it was unwilling to
add to that debt at a high rate, and where it was maintaining a
level of effective demand higher, probably, than that in the
majority of other countries. In those circumstances it was
recognised that it would be necessary for the country to control
the level and, to some extent, the character of its imports, and
provision was made for that. It was hoped that that would meet
the requirments of economies of this character. It recognised.
the need for a planning of international trade, but it recognisad
that need as arising from, as being a consequence of, the.
maintainence of effective demand and the pressing on of development
as part of the domestic policy.
Now, the New Zealand delegates, has, iisod that approach
as being in admission so to speak, through the back door, or
through a window indequately fastened. That, I feel, is perhaps
a little unfair to the London Conference, since what was done there
was done, I believe, in part at any rate; deliberately to meet the
circumstances of economies of this kind. It is true that the
right to control imports is granted not for itself, but as a
necessary complement to the right to maintain a high effective demand
-6- E/P C/T/A./PV/18
domonst ically.
The New Zealand delegate now, in effect, says that it is
necessary that countries which so desire it should. have the right
to plan international trade as an end in itself, not merely as a
necessary instrument to the carrying through of their domestic
social policy. That view is understandaole where a country, for
political or social reasons, decides that a given course of action
is desirable. It is to be hoped, at any rate, that it will be
possible for that to be provided for in an international
instrument of this kind. That hope, however, can only be
fulfilled if the planning of international trade, contemplated as an
end in. itself, is consistent with the general purposes of the
Charter, with the interests of the other countries concerned - or
at least, not unduly inconsistent with them - and if it does not
enable a country obtaining it to obtain privileges which are
denied. other people.
I regret that the United States delegate, in particular, has
in his remarks yesterday choson to discuss this issue as, so to
speak, one of doctrine. I cannot remember precisely the words of
the leader of the United States delegation whon he spoke the other
day, in which he reminded us that he had warned his delegation when
they began that there would be moments in the course of this
Conference when all would. appear to be threatened. I think
perhaps this is one of them, but that the danger is not as acute as
he may have imagined. I am not prepaod to bolieve at this stage
that 'it is not possible to roso'.vo this difficulty in a way which
recognises fundamentally the rights which the New Zealand delegation
seeks, but recognises them in a way which fits then into the general
structure of the Chartor, which recognizes also that whatever
provission is made for economies of the, kind which New Zealand
J .
- 7 - J.
entails
embodies/for those economics obligations which are parallel with
the obligations which the other parts of the Charter impose upon
the economies to which they are applicable..
Here, I think the oritical. issue is the issue of protection.
As I said earlier, the third. requirement of an expending volume of
World trade is the best use of the world's resources - not merely
the full use, but the best use, through international specialization
in its blast sensor. When I say that I would like to remind
delegates (it is unlikely, perhaps, that they will have forgotten)
that I do not mean by that a division between industrial countries
and primary prodcting countries, but a specialization in which all
countries are able to produce . goods of all kinds according to
their special capacities, and that international trade will
gradually develop into an exchange between economies of a graat
variety of goods of all elisees which are prodauoed. in the places
where natural and human resources give a particular advantage It is clear that in some circumstances the use of
protection may well be necessary for the Development of that
spealisation. We have argued that it is. On the other hand,
it is equally clear that the misuse of protection can destroy
international specialisation. It can prevent its development
and could ultimately lead to the development of a series of
isolated independent economies, to standards of living that
will necessarily be far lower than they need be.
The Charter does seek to impose upon countries - while
recognising their right to development ane the use of protective
devices - it does seek to impose on them some discipline
in the degree to which those devices are used, and the
circumstances in which they are employed.
It is important, therefore, if we seek to embody in the
Charter provisions which will recognise the rights of countries
to plan their international trade apart from the right already
embodied to plan it when the consequences of a full employment
end development policy make it necessary, that that provision
should impose upon them the same sort of obligations as are
imposed on other countries.
Now I fear that there is a danger that we are going to be
confused in this issue. It is important that we confine our
discussions on the New Zealand Amendment, I believe, to the
question of whether it is possible to write into the Charter,
without destroying its general fabric, provision for a country
which seeks to plan its international trade, recognising that
if we do that one of the problems of doing it is to write into
that part of the Charter which deals with those countries
obligations of the same kind as are imposed on other people.
Let us leave the question of what those obligations should
G - 10 -
be to be dealt with where they have been dealt with already,
and confine our discussion of this particular problem as to how
parallel obligations can be written into this part the
Charter.
For instance, it is clear that the issue here is going to
be very closely bound up with the employment of quantitative
restrictions for protective purposes. Now there is an argument
going on around Conferences, whether the present provisions
for the control of quantitative restrictions for protective
purposes is good, or whether it does not go too far.
Let us f ight that out in the place where it is provided in the
Article which deals with the quantitative restrictions, and
whatever is the answer there; let us make our job at this stage
to apply that automatically - as automatically as it can be
applied to the other sections of the Charter which deal with
particular types of economy to which the article sealing with
quantitative restrictions itself itself not necessarily apply.
I believe if we do that there may be other problems, other
measures of the same kind which are involved in this issue;
but I feel certain that the New Zealand Dalegation in putting
forward this proposal is not putting it forward as a means of
obtaining for New Zealand privileges that they are not prepared
to extends to other countries, but they are putting this forward
because of the political and social policies of their Government,
because the political and social policies of their Government
are such that they doubt whether adequate provision is made
for them in the Charter, and they would therefore be willing
for us to approach this question on the basis that when seeking
to recognise their particular problem we seek to recognise it on a
basis which grants them no privileges which are not granted to
other countries in other parts of the Charter.
E/PC/T/A/PV/18
G G - 11 - E/PC/T/A/PV/18
Mr. Chairman, I do not believe there is any need for
despair about this question, I think it can be adequately
dealt with. I believe there is a prospect, at any rate, that
it can be adequately provided for; and I would therefore suggest
at the appropriate time that we can well do with this issue
what has been done with so many others - that is, we can refer
it to a small Committee with the confident expectation that
human ingenuity (of which we appear to have a good. deal at this
Conference) will find a solution to this problem also. - 12 -
E/PC/T/A/PV/18
CHAIRMAN: The Delegate of Belgium.
M. Pierre FORTHOMME (Belgium):(Interpretation): I merely
wish to state, Mr. Chairman, that the Belgian Delegation fully
supports the statement made by the Canadian Delegate.
CHAIRMAN Does any Delegate wish to speak on this subject
The Delegate of the United Kingdom.
Mr. S.L. HOEMES (United Kingdom): Mr. Chairman, the United
Kindom Delegation has studied with interest and, I think, like
other Delegations, with thoughtful and sympathetic interest, the
New Zealand amendment to Article 33 which we have before us.
Whatever may be felt about the content and the implications
involved in the New Zealand representative's speech, I feel that
no one could but have listened to it with admiration as to its
moderation and dignity, Just as we had listened on a previous
occasion--I think on 20th May--to the speech delivered in this
room by his distinguished leader, the Deputy Prime Minster of
New Zealand. Bult in saying that, I should say also that we, like
other Delegations, have tended to feel that the case presented
by New Zealand was already largely met, and fairly mat, by the
draft Charter as it stands.
We have a great responsibility, and I suppose we do well to
remind ourselves of the responsibility from time to time, of
drafting a document which we hope will be greatly to the
advantage of all countries in the world; and if I might turn for
a moment to something my United States colleague said yesterday,
we in the United Kingdom feel that the Charter must certainly
be drafted in such a way that the United States could become a.
member. However, I would not wish in anything I say to be
thought to be minimising the difficulties, yet I was encouraged by
V V E/PC/T/A/PV/18
and I think I share the restraint optimism of Dr. Coombs, whose
usual masterly analysis of the problem I will not attempt to
reproduce, in believing that a way out of this difficulty can and
will be found.
Perhaps Mr. Webb Quill. f.;r ive me if I say that much of the
Charter (especially, I think, so far as concerns Chapters III and
IV) is modelled on lines proposed by the New Zealand Delegation
itself, to fit the circumstances and the stage of development
reached in New Zealand, and the measures which New Zealand has
been taking and wishes to continue to take in order to carry on
her domestic policy. The Charter recognizes fully that it is
for countries themselves to decide on their domestic policies, and
insofar as this. does not adversely affect the interests of other
countries or the purposes of the Charter as a whole, that it is
for them to decide on the means whereby those domestic policies
are effected.
It can also be said that a good deal of latitude has been
allowed for in the Charter to meet special cases, and we are up
against the difficulty that if every country, whatever its shape,
begins to have, as it were, a hole made to suit its individual
shape, the shapes of countries are necessarily so varying that the
resulting global hole, if I may use the term, would be rather
large. There must, in other words, be a certain amount of give
and take, and no one, I imagine, will be satisfied to the extent
of one hundred per cent. with the document we finally evolve
after a great deal of labour and a great deal of consideration
to our own and other people's cases. I am sure that that will
apply to the Delegation that I represent.
Of course, it is said, and rightly said, that circumstances
are difficult and peculiar: that they have been peculiar over a
number of years now; but it might not, I think, be altogether
unfair to say that some of the measures taken even in New Zealand
in the course of the peculiar period have been such as might have
led to certain complaints by others had the Charter been in effect
complaints perhaps directed to the content of Article 13 (1).
- 13 - ER
- 14 - E/PC/T/A/PV/l8
Nevertheless, I believe that we all feel that there has been
a great deal to admire in New Zealand's policy and development,
and clearly we have to make every effort to satisfy ourselves that
a reasonable satisfaction is given to all countries who find that
the Charter as it stands may not be entirely appropriate to their
individual circumstances, or that it bears heavily upon the
domestic policies which they may be pursuing in their own interests,
and as they would claim, in the interests of all other countries
also. We therefore would welcome, Mr. Chairman, the proposal
that the amendment suggested by the New Zealand delegation should
be considered carefully by a strong and especially competent
Committee, the exact composition of which will, of course, be
very largely in your own hands. - 15 - E/PC/T/A/PV/18
CHAIRMAN (Interpretation): I suppose that other delegates
wish to speak ? Mr. Webb.
MR. L..C. WEBB (New Zealand) : Mr. President, it would be,
I feel sure, less than grateful on my pert if I were to attempt
to turn this into an argument. I would only ask your permission
to correct certain misapprehensions which may have arisen as to
what I said yesterday, and I would like to begin by referring
to the remarks c the United States delegate and incidentally to
thank him for those remarks, because I felt th t in some way we
were perhaps looking at one another across a gulf created by
different economic backgrounds and different economic experiences,
but I felt all through his speech that he was making an effort
to understand our problem, and I feel grateful for that. But
I felt nevertheless a little unhappy over his fear that what we
were seeking was to make a position of complete development of
the protection of all the domestic industries, "wi h the only
restraint on that development resting in the will of the country
which controls its trade." Those are his exact words. That is
not what we desire, and I am certain that it would not be the
position were our amendment adopted, because it seems to me that
paragraph 2 of Article 35 - and we specifically refer to Article 35
in our amendment - prevents that sort of thing from happening.
And I think if we doubt the efficacy of Article 35 then really
we doubt the possibility of enforcing any of the Rules in this
Charter,
Dr. Coombs in a very helpful speech has said that the
New Zealand delegation has perhaps misunderstood Article 26
and perhaps been a little unfair in. its in .erpretation of the
work which was done in London, and. if that is indeed the case
then I regret it. We have read Article 26 very carefully and P. - 16 - E/PC/T/A/PV/18
we have read in particular those passages in the London Report
which are relevant particularly - pages 12 to 14 - where the
effect of Article 26 is set out, and our impression was that
Article 26 means that as soon as a Member apparently has enough
exchange to finance all types of imports, then it must abandon
its system of import selection. If that is a wrong impression,
then,I repeat, I regret that we have not studied .article 26
thoroughly enough.
We chose to approach this problem in this particular way
because at one point in the Charter we do make provision for a
completely controlled economy of a certain type - the economy
which works its whole foreign trade through a system of trade
monopolies or one great trade monopoly; and we thought that
it was logical there to provide for our particular type of
economy, particularly as we saw the danger that i! we left the
Charter as it was countries in our position - and. we believe
that there are quite a number of countries in our position -
are lieable to be forced by the Charter into a rather damaging
choice between going over to liberal trade or going in the
direction of state-monopoly, and we feel that the last thing
perhaps that this Conference would desire. to do would be to
push countries in our position further towards the state-monopoly
system. And it was for that reason that we felt that it would
perhaps be more helpful to the Conference and to ourselves to
put the amendment in this particular place.
That, Mr. Chairman, is all I have to say except to thank
this Commission for its patience in listening to what they
perhaps thought was an unconscionably long speech by myself
yesterday, but above all to thank them for approaching this
problem in a very sympathetic and understanding way, so
sympathetic and understanding that I feel that I can almost
share the optimism of Dr. Coombs. Thank you. - 17 -
E/PC/ T/A/PV/18
CHAIRMAN (Interpretation): Are there any other delegates
who wish to speak?
Two delegates have asked that this question should be referred
to an ad hoc/Committee who would try to find a solution to this
difficult problem. Mr. Holmes considered that the membership of
this Committee should be fixed by myself.
Since the sub-Committee on Articles 31 and 32 is already over-
worked and has a very large membership, end as I wiish a more
restricted membership for the sub-Committee on Article 32, I propose
the following members: New Zealad, United States and I.
slovskia, the three delegations which presented amendments to this
Article; and in addition, the United Kindom and Australia. I
would ask your. permission to preside over the work of this Committee
myself. Do you agree to this proposal?
(The meeting agreed)
Mr. B.J. BAYER (Czechoclovakia): I Would like to enquire
to which of these sub-Committees the Czechoslovakian Amendment is
to be referred, whether to the Committee dealing with Articles 31
and 32 or to this new Committee? I am speaking of the amendment
relating to Article 35 where a representation is being made and the
country concerned may be called upon for confidential information
which would damage its internal economy. What we had in mind was
that this amendment should refer to the whole of Section E
Chapter V
CHAIRMAN (Interpretation): I think it would be better if the
Czechoslovakian amendment were referred to the Sub-Committee on
Articles 31and 32. Ifi this Committee finds it difficult to solve
the problem, it can refer it back to the Committee on Article 33.
L.. L.. _ 18 _ E/PC/T/A/PV/18
Mr. B.J. BAYER (Czechoslovakia): We quite agree
CHAIRMAN (Interpretation): Does any other delegate wish
to speak?
The meeting is adjourned.
(The meeting rose at 4 p.m.) |
GATT Library | tz212sd2384 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Eighteenth Meeting of the Tariff Agreement Committee held on Friday, 12 September 1947 at 9.p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, September 12, 1947 | United Nations. Economic and Social Council | 12/09/1947 | official documents | E/PC/T/TAC/PV/18 and E/PC/T/TAC/PV/17-19 | https://exhibits.stanford.edu/gatt/catalog/tz212sd2384 | tz212sd2384_90260066.xml | GATT_155 | 12,081 | 72,674 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/TAC/PV/18
12 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
EIGHTEENTH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON FRIDAY, 12 SEPTEMBER 1947 AT 9.P.M. IN THE
PALAIS DES NATIONS, GENEVA.
Hon. L. D. WILGRESS (Chairman) (Canada)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247).
Delegates are reminded that the texts of interpretations, which do
not pretend to be authentic translations, are reproduced for
general -gui'dance only; corrigenda to the texts of interpretations
cannot, therefore, be accepted.
NATIONS UNIES J. 2 E/PC/T/TAC/PU/18
CHAIRMAN: The meeting is called to order.
Before we broke up this afternoon I said that the Secretariat
would prepare a redraft of the first two paragraphs of the Protocol
of Signature in the light of the discussion. The draft of the
first two paragraphs as prepared by the Secretariat has been
circulated and I think it is now before each Member of the Committee.
We regret very much that, owing to pressure of time, it has not been
possible to circulate a French text, but I trust that we can
consider the text in English.
Are there any comments with regard to the text prepared by the
Secretariat?
Dr. Augenthaler.
H.E. Dr. Z. AUGENALIAER (Czechoslovakia): Mrm Chairman, I
vauld suggest that we finish the first paragraph at "duly authorised"
and that we delete the rest: "by their respective governments".
We think it is not necessary and that, with regard to the signature
it could be, for instance, "On behalf of the Government of the
United Kingdom" and, in the case of Czechoslovakia, it could be
"On behalf of the President of the Republic, and so on.
CHAIRMAN: The Delegate of New Zealand.
MR. J.P.D. JOHNSEN (New Zealand): Mr. Chairman, I was just
wondering whether an undertaking of this nature would be given by
Governments and not by representatives.. I thought that perhaps it
Might read this way: "At the time of signing the General Agreement
onTariffs and Trade, the undermentioned Governments through their
duly authorised representatives". E/PC/T/TAC/PV/18
CHAIRMAN: We have now got two opposite proposals.
Dr. Augenthaler
H.E. Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, as
this is an international obligation, I chose a text as it is in
hundreds of different protocols and treaties, because it is entirely
neutral, and I thought that it would accommodate everybody.
CHAIRMAN: I think that if we carried out the suggestion of
Dr. Augenthaler the first paragraph would read as follows: "At
the time of signing the General Agreement on Tariffs and Trade, the
Undersigned duly authorised representatives". Would that be the way
you suggest?
The Delegate of New Zealand.
MR. J.P.D. JOHNSEN New Zealand) Mr. Chairman, that is not
quite consistent with the form of the Agreement itself, as we refer
there to the Governments of certain countries. Is it a matter for
the Legal Drafting Committee?
J.
3 - 4 -
Mr. SHACKLE (United Kingdom) Mr. Chairman, I wonder if
we could not say "by the respective Governments and Heads of
States," and then. everybody who is authorized by Heads of
States and everybody who is authorized by Governments would be
satisfied.
M. ROYER (France) (Interpretation): Mr. Chairman, if you
Just say plainly "duly authorized" everyone ought to be
satisfied, because some of the representatives would be
authorized by the Foreign Office, others by the Head of State.
This depends entirely upon the constitutional rules of each
State.
CHAIRMAN: Are there any other comments?
Cannot we find some solution of this difficulty? I
understand that the New Zealand Delegate and the United Kingdom
Delegate attach importance to the retention of the word
"Governments." The Czechoslovak Delegate, supported by the
French Delegate, thinks it is sufficient if we Just say: "The
Undersigned duly authorized representatives. "
Mr. SHACKLE (United Kingdom): Mr. Chairman, I would not
like to be understood as insisting in any way about it. We
shall no doubt have some provision to allow for the Government
of the United Kingdom, Great Britain, Northern Ireland, etc.
I suppose that really, in an indirect way, conveys the sense.
Mr. J.P.D. JOHNSEN (New Zealand); We shall get into
another difficulty, too, when we look at ,She third paragraph
of this Article.
CHAIRMAN: The Delegate of the United States.
Mr. J. M. LEDDY (United States): I wonder whether it could
be solved by saying that at the time of signing the General
Agreement on Tariffs and Trade the Governments in respect of
E/PC//T/TAC/PV/18
S E/PC/T/TAC/PV/18
which, or on behalf of which, this Protoool has been signed,
having agreed, undertake, etc.
GHAIRMAN: Would that give satisfaction to the Delegate of
Czechoslovaikia?
H.E. Mr. Z. AUGENTHALER (Czechoslovakia): I am sorry,
but I cannot sign any Agreement on behalf of the Government.
Mr. SHACKLE (United Kingdom): Why not "State or Government
an Whose behalf"?
H.E. Mr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman,
I do not understand. The formula is taken exactly as it
stands here, and now we are making such difficulties.,
Mr. SHACKLE (United Kingdom): Mr. Chairman, in the last
resort I am quite indifferent as to the exact terms.
CHAIRMAN: Can we than agree on "The undersigned duly
authorized representatives" ? Are there. any objections?
Then we come to the net. paragraph. Mr. Leddy suggests
"having agreed" instead of "agree."
Mr. LEDDY (Unitod States): Well, Mr. Chairman, that does
not quite take sense. If we say "the Undersigned duly
authorized representatives" we must say they have agreed on
behalf of or in respect of their Governments. It the
representatives agree, it makes no difference.
I think, if you use the form you suggest, Mr. Chairman,
that "the Undersigned duly authorized representatives, having
agreed on behalf of their respective Governments", you must say
that in order to make the thing effective.
Mr. SHACKLE (United Kingdom): In that case, Mr. Chairman,
I would renew my suggestion of State or Government. Would not
that perhaps give satisfaction to Mr. Augenthaler?.
- 15 - E/PC/T/TAC/PV/18
H.E. Mr. Z. AUGENTHALER (Czechoslovakia): Is there any
contradiction between State and Government, Mr. Chairman?
Mr, SHACKLE (United Kingdom): I should not have thought
there was any necessary incompatibility. Those who are
authorized to sign on behalf of their Governments would sign
on behalf of their Governments, and those who are authorised
to sign on behalf of States would sign on behalf of States..
I should have thought it would work.
CHAIRMAN: We do not seem to be able to get away from
Governments.
Mr. SHACKLE (United'Kingdom): Mr. Chairman, surely we
shall all sign this on behalf of somebody or something. If
it is not a Government, what is it? Is It the Head of a State
or is it a State, or what?
Mr, LEDDY (United States): I thought this problem had been
solved for the Trade Agreement by the word "Governmnent."
CAAIRMAN: I agree that was the case in regard to the
General Agreement. We had agreed that in the Preamble the
word "Governments" could remain.
- 6. -
S - 7 -
V E/C/T/TAC/PV/18
CHAIRMAN: Having omitted the word "Governments" from
the first paragraph, perhaps Dr. Augenthalor would agree to
have it in the second paragraph :"having agreed on behalf of
their respective Governmcnts"?
Dr. Z. AUGENTHALER (Czechoslovakia): I am sorry,
Mr. Chairman, I stated that I had no objection and our Legal
department has no objection, to its beginning with "Governments"
and. so on, but I stated that as to the signature, this would
be on behalf of the President of the Republic.
I have taken here a formula which has existed for I do not
know how long, and I would like "at the moment of signing the
convention of today's date relating to the simplification of
customs formalities, the undersigned, duly authorized, have
agreed as follows" (now come the provisions, and at the end
we have "Germany, Austria" etc. and signatures). In is the
internal affair of each country who is authorised to sign.
In one country it is the Government, in other countries it is
the President, in other countries it may be signed another way;
but it is the internal affair of each country.
CHAIRMAN: TheDelegate of France,
M. ROYER (France) (Interpretation): Mr. Chrairman, I will
make another attempt to find a compromise here. The only
important undertaking by the Governments is the last undertaking,
"The Governments undertake pending the entry into force of a
Charter". It is the only thing, in fact, which is important
from the undertaking point of view. This is the last paragraph
of this Protocol, and whether we mention "the Governments" before
for the other paragraph does not really matter. E/PC/T/TAC/PV/18
I wonder, therefore, if we could not say that "the
Representatives... agree to the following'" and then we would
state the contents of the paragraph, and when we came
to the last paragraph we would say:
"The Governments as represented undertake, ponding the
entry into force of the ''Charter" etc.
The French Delegation would have no difficulty in
accepting the word "Governments', but there might be some
difficulty in inserting here the word "States", because the
object was not to commit the States but only the executive
power -that is, the Government, and therefore I think that
the formula which I proposed might give satisfaction to
everyone.
CHAIRMAN: Are there any comments on the proposal which
has just been made by the Delegate of France?
Dr. H. DORN (Cuba): I only want to raise one question.
I see that it is said "at he time of signing the General
that
Agreementt. Is it really the intention/in signing the
General Agreement, one signs at the same time the so-called
Protocol of Signature? Or is that not something quite
different under the new conditions? Is that signed before,
or at the same time? When you sign the Agreement, you will
sign this Protocol - is that the idea?
CHAIRMAN: We had a very lengthy discussion of this point
this afternoon, .and it was agreed that the General Agreement
and its accompanying Protocols should be signed at the same
time. The Secretariat were instructed to prepare a document
setting forth the various considerations in relation to
-- 8 --
V V - 9 -
signing the various documents, and that will be circulated
tomorrow morning. The Delegate of Cuba was not there at the
time, and therefore I can understand he was not aware of what
took place this afternoon.
Dr. H. DORN (Cuba): Thank you very much, Mr. Chairman.
M. ROYER (France) (Interpretation): Mr. Chairman, I would
like just to close the brackets which the Cuban Delegate opened.
I think that there is a link which is missing now. In the
Protocol of Provisional Application we ought to mention also
the Protocol of Signature, and not only the Protocol relating
to Parts I, II and III of the Agreement.
CHAIRMAN: The Delegate of Cuba.
Dr. H. DORN (Cuba): Mr. Chairman, would you allow me to
add something, because Mr. Royer touched upon just the point I
wanted to raise. I have the impression that the words "Protocol
of Signature" wore chosen at a time when the whole situation was
quite different from the present situation, Therefore, first
of all, I would prefer to give another title to this Protocol,
because it is not the Protocol of Signature but its content is
more far-reaching. Perhaps that can be discussed.
The second point is the question whether you will at the
moment of the provisional application, also apply this Protocol?
Is it not necessary to insert something about the application
of the principles of the draft Charter and the moment of the
provisional application?
CHAIRMAN: The Delegate of Cuba this afternoon did propose
that the title should be changed, and I said at the time that
after we had established the text of the Protocol, we could then
V
E/PC/T/TAC/PV/18,r /, Q V -10 - E/PC/T/TAC/PV/18
be in a better position to decide what title there should be.
With regard to the relationship of the Protocol of
Signature to the Protocol of Provisional Application, we have
already passed the Protocol of Provisional Application, but,
as I understand it, the Delegate of France and the Delegate
of Cuba propose there should be some reference in the Protocol
of Provisional Application to the Protocol of Signature.
Mr. J.M. LEDDY (United States): As I understand it,
Mr. Chairman, the Secretariat will prepare for us a paper
setting out the relationship of the several documents and the
possible time of signature of each, and I suggest that the
point raised by the Delegate of Cuba, which is an important
one, should be held over until we have the document, because
I rather suspect that his point will be met by the tin g of
signature.
In other words, if we agree that you must sign the Trade
Agreement if you sign the Protocol of Provisional Application.
then you will have covered the Protocol of Signature. On
the other hand, anybody signing the Trade Agreement without
signing the Protocol of Provisional Application will also be
required to sign the Protocol of Signature, because it refers
to the moment of signing the Trade Agreement; but I think we
had better wait for a detailed discussion of this until we
get the paper.
CHAIRMAN: I think the suggestion of the United States
Delegatation is a food one because when we have the Secretariat's
paper we will see more clearly the implication of the signing
of these various documents.
Can we get back now to the text of the Protocol of
p . r /-rr / ^S V
- 11 - E/PC/T/TAC/PV/18
Signature, particularly the difficult question as to whether
or not, to refer to "governments"?
Baron F. de GAIFFIER (Belgium): Mr. Chairman, would it
not be a very simple way of meeting the Czechoslovak Delegate's
point by just keeping the first paragraph and adding after
"Governments" "or Head of State as the case may be"?
Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I do
not find it very elegant, but I have no objection.
Mr. J.M. LEDDY (United States): Mr. Chairman, I think
the Delegate of France has pointed the way to a solution of
this problem; and has also indicated a possible objection to
the proposal by the Belgian Delegate.
He points out that the basic undertaking here is on
behalf of the executive authority. The understanding is that
the last paragraph extends the executive power to follow the
principles of the Charter. Now, if we say "The Heads of States
or Governments as the case may be", I think we shall draw a
distinction between the executive power in some cases and the
whole power of the Government in other cases. What I would
suggest is that we might say in the first paragraph:
"At the time of signing the General Agreement on Tariffs
and Trade, the undersigned, through their duly authorised
representatives, having agreed that the objectives laid down"
etc. "undertake pending the entry into force of a Charter, to
observe to the fullest extent of their executive authority the
principles of the draft Charter" etc. Then there would follow
"for the Government of so-and-so" or "for the President of so-and-
so''. But I think that "the undersigned" would mean the
authorities listed below, and the inclusion of the words
"executive authority" in the.last paragraph would avoid any
implication that some undertakings were more extensive than
others. E/PC/T/TAC/V/l8
- 12 -
CHAIRMAN: Does the proposal of the United States Delegate
get us out of the difficulty?
Any objections to the proposal of the Delegate of the
United States? Then the first paragraph would read: "At kit
the time of signing tehe GneAgreemal rent aon Triffs and Trade,
tuhe ndersigned through their duly autheorisd representative."....
Then tehe naxtg praraph swailltrt o"ff: Having agreed that....
etc." Ias tht right?
ny otherm coLents in regard to the seconad gpnacaph?
Mr. P. Garcia ONMLDI (Nont iprtserted).
Dr. AZ. ugenthaler (Czechoslovakia): May I suggest the
French text as it stands her"Aue om ment de pédrocàer
la signature les sougnéssisûm, dent autoériss, sont convenues
de ce qui suit."
M. ROYER a(Frnce) (Inteerprtation): Mr. Chairman, I
would not wish to refer the matter to the Iegal Drafting Committee
but I wonder, nevertheless, if this would not be the proper
solution.
IRMAN: CdI I think we weillhaevo it st out the way we
agreed and then we will see Leg:if tahealg Drftin Committee can
mae.any imemprovelts.
ny comments.wigth refrd eto thGthird paragraph?
MPr. J..D.JNOHNSE (Nelaw Zeand): I do not know whether this
paragraph actually sets out the requisition. It says there that
thee Membrs of the Preparatory Committee of the Conference
reommend the text of thae Dr.t to the Economic and Social Council.
I have not before me a copy of athe tual Draft sent forward - 13 - E/PC/T/TAC/PV/18
but I notice on Page 3 of the Report of the Preparatory Committee
it refers to the draft adopted as a basis for discussion at the
World Conference. I think i n the light of that after the word
"rer. ULrdfiJ" we should have the words "for consideration" -
"recommended for consideration."iO. i'
ACKLEr,U$ILed KCtgdumi:'-o vuld t not beu bes tot ;c: s
...7r commeiEed tLle tex`Uof -adtrft Chlater for counideration
by the Conference ....." ? That would be a little better.
amended by Mr. Shackle, approved?
Mr. LEDDY (United States ): With a very slight change.
I think if we make that change, with which I agree, we ought to
have the phrase " ....... through the Economic and Social Council
of the United Nations."
CHAIRMAN: If the proposal if the New Zealand Delegate is
adopted, the paragraph would read as follows: "HAVING, in their
capacity as Members of the Preparatory Committee for the Conference,
recommended to the Social and Economic Council of the United
Nations the text of a draft Charter for consideration by the
Conference." Is that agreed.
(Agreed)
M. ROYER (France) (Interpretation): Provided that this
question of majority is settled because although governments are
Members the Heads of States cannot be Members of the Preparatory
Committee. R - 14 - E/PC/T/TAC/PV/18
CHAIRMAN: I think. we have agreed that that problem is one
suitable for the LegaI Drafting Committee. Is that paragraph
as amended , approved?
In the last paragraph, I think Mr. Leddy has proposed the
wording "executive power" for the word "authority" in the second
line.
Mr. LEDDY (United States): There is one other suggestion
I would like to make. There is a phrase in the protocol
which came to us from the Drafting Committee in New York. I
think it is probably better than the the phrase we have here
"pending, the entry into force of the Charter". The reason
why I think it is better is because it lends more precision to
the undertaking. In response to the request br the Delegate
of Australia the othner day that we should make it as clear as
possible so that we should know where we stand, I would suggest
deleting this phrase - "pending the entry into force of the
Charter" - and sabstituting in lieu the phrase "pending their
acceptance of a Charter in accordance with their constitutional
procedures. That would mean that only the signatories
accepted a Charter of the kind, we are talking about. They would
to
be obliged to observe/the fullest extent of their executive
authority the principles laid down in the draft Charter. I
do not think that is suite clear from the existing text. - 15 -
CHAIRMAN: Are there any objections to the proposition Just
made by Mr. Leddy?
Mr. J.P.D. JOHNSEN (New Zealand): I do not wish to raise an
objection, Mr. Chairman, but I would just make an observation,
I was wondering whether we should not relate the Charter to the
Charter adopted by the Conference: whether you had in mind a
particular Charter. In that case I would suggest the wording might
be:
"Pending their acceptance in accordance with their
constitutional procedure of a Charter as adopted by the
Conference .
CHAIRMAN: The Delegate of Chile,
Mr. F. Garcia OLDINI (Chile) (Interpretation): Mr. Chairman,
this paragraph raises two questions.
The first is a question of drafting, linking this text to the
definitive text of paragraph 1. I cannot think that we can make a
decision on this last paragraph before we know the final draft of
paragraph 1.
The second question is a question of substance and I thought
that we had decided to postpone the debate on these questions of
substance until we had seen the document which the Secretariat is
to prepare to establish the relations between the signatures of
these various documents.
CHAIRMAN: We are just endeavourin-g now - I do not think there
is any decision to the contrary - to establish a text of this
Protocol so that we can include it in the new clean draft which the
Secretariat are going to get out for our second reading. If we
keep deferring every subject until ve deal with something else vie
shall never make any progress, and I would like to have a text
agreed at that second reading stage so that we could finally
approve it in our third reading.
P. 16 -
_ I_ , _ , . , _
P. ~~~~~~~~~EPC/T/TAC0/PV/18
M:. F. Garcia OLDINI (Chile) (Interpretation): Mr. Chairman,
as Chairman I think that you are quite right to try to speed up our
debates and the procedure. which we are now following; but if we
read the first paragraph and see that, it is stated that "the.
undersigned, duly authorized. " and so forth and -then we read
the last paragraph and see "undertake ... to observe to the
fullest extent of their executive authority ..... then it seems to
me that this has no sense.
Furthermore, if we do not know the place of the Protocol and
to what other document this Protocol will be attached, then of
course we cannot discuss it.
CHAIRMANL The Delegate of Chile proposes that the question
of this particular Protocol be left in abeyance until we receive
the docunt.e from the Secretariat setting forth the various stages
of signature, and I think it s perhaps preferable that we-should
leave it because we do need a little bit mare time to think over
the first paragraph; it is quite obvious that we are not going
to have a satisfactory document if we leave it in the form we
have decided. The proposal to refer it to the Legal Drafting
Committee is not a very good way of solving this problem because
the Legal Drafting committee consists of representatives appointed
in their personal capacities and this question of whether we
mention governments or not is of very great interest to certain
members of the C.mmittee who are not on the Legal Drafting
Committee.
-So I think it would be wise to leave this Protocol of
Signature over until we have had that document from the Secretariat
and to then, erhaps, consider it tomorrow'morning.
Mr. R.J. SHACMZE (United Kingdom) Purely for the purposes
of a clean text, Mr. Chairman, would it not b.e a good thing to
write in Mr. Ledd''s amendment and Mr. JohnsenTs addition to it? P- 17 -
I have the feeling that that is a serious question and I think,
for the purposes of a clean text for our consideration later, we
Right do worse than write that in.
CRAIRMAN: I. that would meet with the agreement of the
Committee, .the Secretariat could prepare another draft of the
Protocol of Signature including the amendments which were suggested
by Mr. Leddy, as amended by Mr. Johnsen.
Mr. J.P.D. JOHNSEN (New Zealand): Mr. Chairman, there is
another point of substance I wish to raise in connection with the
paragraph, but if you prefer I can let it stand over until tomorrow
when you next consider it,
CHAIRMAN: I think it would be butter to leave it over until
tomorrow.
Dr. R. DORN (Cube.): Mir. Chairman, may I make only a practical
proposal in order, possibly, to save time?
This morning the Legal Drafting Committee tried to clear up,
as far as possible, the relations between the different documents
to be signed, and it would perhaps be useful if the Secretariat
were to cooperate with the Letal Drafting Committee in preparing
the new document because we tried to find a way of clearing these
points; .,I am not quite sure that we sugceedeo in doing so, but
perhaps by combining the work we could save time later on.
CHAIRMAN: I was anxious to have that document circulated
tomorrow morning so that we could consider these matters tomorrow.
We want to get a clean text of this Agreement finished by 'tomorrow
so that we can circulate it over the weekend.
Dr. Z. AUGENTHALER (Czechoslovakia); Mr. Chairman, I would
like to observe here one thing which is very amusing and that is
that we have reason to celebrate that, in the Protocol of Sigature,
E/PC/T/TAC/PV/18 Q - 18 -
E/PC/T/TAC/PV/18
we have for the first time baptised the Charter which we have been
discussing for so long. Up till now, nowhere has the Charter been
named, and now here we are putting in its name because we say
"a Charter for an International True Organization". That is
the first time I have met the name of the Charter. I do not know
if it is the right name or not but anyhow I v uld like to observe
this curiosity.
CHAIRMAN: We will now take up the Protocol of Interpretative
Notes to the General agreement on Tariffs and Trade. The
Secretariat prepared a draft which is given in document W/318 of
3 September. There is also Addendum 1 which gives a Note to
Article XI.
We will first of all consider the title and first paragraph of
this Protocol.
The title given to this Protoool is Protocol of Interpretative
Notes to the General Agreement on Tariffs and Trade. Are there
any objections to the title?
Mr. J.MS LEDDY (United States): Mr. Chairman, I just want to
say this on the subject of those Protocols. I was wondering
whether we could not avoid having one more Protocol. Could we not
make these Interpretative Notes simply another Annex to the
General Agreement, an integral part of the General Agreement,
saying that the following Notes shall serve as a basis for
interpretation of the provisions of the Trade Agreement? Then we
might save having another Protocol.
CHAIRMAN: The Dolegate of the United States has suggested
that instead of a Protocol we have these Interpretative Notes set
forth in the form of an Annex to the General Agreement. - 19 E/PC/T/TAC/PV/18
MR, J.M. LEDDY (United States): Mr. Chairman, I might explain
That if there is any question as to the validity, one could put a
very simple provision in the Agreement saying that the Annexes form
part thereof.
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, after all,
we shall have several Protocols anyway, and I do not think that it
will matter whether we have one more or one less. We might even
resort to a scheme of Unumbering protocols, Protocol 1, 2, 3, etc.
I would rather hesitate to embark upon a brand new form of drafting,
but I do not think that it makes any difference to the substance at
this tage.
CHAIRMAN; Are there any other comments?
Monsieur Royer.
M. ROYER (France) (Interpretation): Mr. Chairman, I think that
if we want to have one Protocol we could have one Protocol of
Signature only and insert under (1) the contents of what now appears
in 'the Protocol of Signature, under (ii) the Interpretative Notes,
and then if we wish we could even have (iii) for something else.
of course, we would have another Protocol which would be the Protocol
of Provisional Application, but this might be a saving of signatures.
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, I am s rry to
break in with another suggestion, but I think that these Notes are
part of the placing on record of the text. In the Final Act, we
place on record the text of the Draft Agreement, and these are
Interpretations of the Draft Agreement, so it seems to me that their
right place is in the Final Act and the Interpretative Notes are part J. - 20 - E/PC/T/TAC/PV/18
of the text itself.
CHAIRMAN: The Delegate of Cuba.
DR. H. DORN (Cuba): Mr. Chairman, I have the impression that
we have to start with the question of what are the Annexes to the
Final Act. The Agreement has to be authenticated and then we will
have-to ask for the other parts of the Agreement which have to be
authenticated, and that will be the Interpretative Notes and will b,
I think, the Reservations. Therefore, I think all these will nave
to be put as Annexes to the Final Act. Therefore, I thought that
it would be useful to ask, from a purely legal point of view, what
will be covered by the Signature of the Final Act, and what will be
authenticated? Then, we will have the whole thing together and we
will see what has to be finally signed. In my opinion, we must
have first the Final Act with all its Annexes, and afterwards there
is the question of what documents have to be signed after that.
CHAIRMAN: The question before us now is whether the
Interpretative Notes should be included in the Protocol or in an
Annex of some other document in the General Agreement.
Monsieur Royer.
M. ROYER (France) (Interpretation): Mr. Chairman, I have no
objection to inserting these Notes in an Annex appended to the
.General Agreement, nor do I have any objection to inserting these
Notes in a Protocol which would be signed at the same time as the
General Agreement, but the system which has been devised by the
Secretariat does not-satisfy me, and I would like to explain briefly
why. - 21 - E/PC/T/TAC/PV/18
Delegations have asked that the Notes should have an authentic
character and should be placed on an equal footing with the text of
the Agreement. Therefore, the procedure must be the sazge and the
validity of the undertakings regarding the Interpretative Notes and
the Agreement must also be the same. If we only have a Signature
given in the Final Act, only the Delegates in their personal capacit.
will be committed and not the Governments, and this is not what we
are seeking. Therefore, I think that the Notes have to be placed
on the same footing as the Agreement, and they must have the same
value as the Agreement. There are two ways of achieving this
result, one is to append these Notes in an Annex to the General
Agreement, the other is to insert them in a Protocol which will
be signed at the same time as the General Agreement, but once again
it seems that we are faced with the problem which we had this
morning in 'chassé-croisé', that is, that we are trying to provide for
the entry into force of an Annex before the entry into force of the
document.
CHAIRMAN: I would like to mention with regard to the reference
to the Secretariat that we did agree that these Interpretative Notes
should be placed in the Protocol, and it is on the basis of those
instructions that the Secretariat has prepared thiJ document. Their
task was to set forth the various Interpretative Notes which appeared
in the relevant Articles of the Charter and they have presented a
text to us for our consideration, so that the Secretariat were simply
carrying out the instructions that we gave them.
As regards the time of the signature of the Protocol, it was
understood when we came to a decision as to the Protocol that it
would be signed at the same time as the General Agreement. E/PC/T/TAC/PV/18S
. MROYER (France) (Interpretation): Mr Chairman, that is jsut
the point. The proposal of teh eScretariat differs from what you
have just stated, .because the Secretariat does not provide ofr the
signature at the time of the Signature of f ote hGeneral Agreement, but
at the timeof theSi gnature of the Final Act.
CHARMA N: The rfeerence was done at Geenva, and that is the
formula which we have been usign.
M. ROYER( France) (Inteprretatin): o M r.C ahimarn, in the Frechn
tex t there is th werd ''hoolemgue'r, whchi appears to be the
equivalent of thew rod. ercifyyig.n" Therefore, it seems to me that
time of the sgintuare of the
it would not crroesopnd to theG/neeral Agreeemtn, but to the time of
signature of the Fnial Act. 'H mooeluge"r means that the Protcool
has been signed, oro ne Annxeto ad ocme,nth as been signed, bfoere.
MR. .RJ. HASKLCE: (UnitedK ingdmo) : Mr. Chairman, I would
like to make a suggestion. Frist, I will eatmay words about the
parallel Final Act . Monioeur Royer has convinced me that I was
quite wrong about that, it clearly should be on the same principle
as the General gAreemetn. If we decide to keep the Protocol form
we should surely have the sametyp e of heading as that which we will
eventually adopt for the so calIde PxIZ tsbl fo Sginature. Whatever
form i sadopted fo rthta shuold be daopetd fro thi.s
J. E/PC/T/TAC/PV/18 -- 23 --
Mr. E. McCARTHY (Australia): Mr. Chairman, the view that
the interpretative matter should be attached to the Agreement
appeals to us and we should like to recall that it seems to us
quite sound to have the Agreemant, then an Annex interpreting
the various aspects of the Agreement, and when you sign the -
Agreeemnt you automatically sign the interpretative provisions
as-well.
As Mr. Shackle has eaten his words,w Il il not make the
reference I wgoas ing to make. Put into the Final Act, that
appeals to us as being purely to certifye th correctness of the
text and we do not think it should contain anything else. Again
we would prefer the Annex to the Prcotool. The Protocol would
serve the purpose but it seems not to be as simple and certainly
i not more effective than having the Aenno to the General
Agreement.
CHAMAIRN: The Delegeat of Cuba.
Mr. H. DORN (Caub): Mr. Chairman, I have the impression
ta- here is a misunderstanding here which impedes the Agreement.
I think we have two different questions to solve. The first is
the question of the Final Act and the certifying of texts and we
have to answer the question of what shall be certified in this way,
the General Agreement or the so-called Protocols. Then we have
the Annex to the Final Act; all this is only for the purpose of
certifying. But that is quite a different question from the other
one; what has to be signed later on if we have to sign the
Agreement ?
Then we have to ask what is the relation between the General
Agreement and the so-called Protocols. I think the General
agreement has some Protocols which always have the nature of
S . E/PC/T/TAC/PV/18
Annexes. That means they have the same legal force. There
is ,*¢. who so-called Protocol of Signature: that means a
Protocol which talks about the observance of the principles of
the Draft Charter.
Secondly, there is the Protocol of interpretative notes,
and perhaps a third one which contains reservations. These
three Protocols form an integral part of the Charter and they
can take the form either of an Annex or a Protocol if you insert
a clause into the Agreement clearing up this relationship.
But there is another Protocol which stands on its own feet;
that is the Protocol of provisional application, and that has
nothing to do with the Annexes to the Agreement. You can sign
the General Agreement later on, giving the so-called Protocols
the character of Annexes. Then you have one signature. But
you can also sign a Protocol in itself, as has been the case in
the history of international treaties, saying, within the Agreement,
that the contents of the Protocol have the same legal force as
the Agreement itself. We have always had it so in commercial
treaties, in treaties on double taxation, and so on.
Therefore, I think we have to make a clear distinction
between the Final Act and its annexes on the one side,and between
the documents which have definitely to be signed, on the other side.
I think those documents should be the contents of the Note of the
Secretariat, In order to make clear what has to be signed first
here in Geneva, together with the Final Act, and then what documents
have to be signed definitely.
CHAIRMAN: The Secretariat will take due note of the
comments Just made by the Delegate of Cuba.
Thare is developing a difference of opinion in the Committee
as to whether the interpretative notes should be included in a
Protocol or an Annex to the Agreement. I think it is necessary
S. - 25 -
that we should develop the sense of the Committee on this question,
in order that we may be able to know how we should frame the
document which will carry these interpretative notes.
The Delegate of Norway.
Mr. J. MELANDER (Norway) Mr. Chaiman, I think they
ought to be in an Annex to the Agreement; they ought to be an
Integral part of the Agreement
Mr. G.A. LAMSVELT (Netherlands): Mr. Chairman, I _ the
same opinion as the Delegate of Norway.
Mr. F. Garcia OLDINI (Chile) (Interpretation): Mr. Chairman,
I am also of the same opinion
CHAIRMAN: There appears to be general support for the
proposal first made by the Delegate of the United States, that
these lnterpretative notes s should be in the form of Annex
attached to the Agreement, I also take it that should mean
there should be some reference in one of the Articles to the Annex
of the Agreement
Are there any objections to this form of procedure? No
objections.
I take it the Committee agrees to the Proposal that these
interpretative notes should be in the form of an Annex. Could we
have some suggestions as to what sort of heading should be given
to this Annex?
Mr. R.J. SHACKLE (United Kingdom): Annex of Interpretative
Notes is the obvious thing
Mr. LEDDY (United States) I suggest we make it Annex A,
Mr. Chairman, and underneath put "Interpretative Note".
E/PC/T/TAC/PV/18I 0 -26-
CHAIRMAN: The Delegate of Cuba.
Mr. DORN (Cuba): Mr. Chairman, may I say only that then
we would have to ado to one of the Articles, before the words
which you will find in Article II (1), that they are annexed and
hereby form an integral part of the Agreement,
CHAIRMAN: Yes. The Delegate of the United. States had
pointed-that out. I am not quite sure where that Article would
Come, or whether we would make it part of another Article.
Mr.LEDDY (United States): I think that what we might add
is simply in a separate Article to say: "The Annexes and
Schedules to this Agreement are hereby made an integral part
thereof."
M. ROYER (France) (Interpretation): Mr. Chairman, I have
only one slight objection; that the Schedules must be attached
to Part I of this Agreement, because unanimity is required to
modify the Schedules. I wonder if we want to have this rule
of unanimity to modify the interpretative notes.
Mr. LEDDY (United States): In that case, Mr. Chairman,
I withdraw my suggestion. I think it is quite correct. we
could have a provision in Part II to say that the Annex will form
part of that Agreement and the other Annexes which relate to part I
will relate to that Part. I think that is a question which we
might well pass to the Legal Drafting ComMittee for examination.
CHAIRMAN: Will it do if we place this Article at the and
of the last Article, to take the place of the present Article XXXII,
and then leave it to the Legal Drafting Committee to decide whether
"it should be in some other place?
Does the Committee then think there should be any introductory
paragraph to the Annex, or should it just start off with the
interpretative notes?
E/PC/T/TAC/PV/18
S. V E/PC/T/TAC/PV/18
Mr. J. M. LEDDY (United States.): Mr. Chairman, if nobody
else have any suggestion to make, I do not think that any
heading is needed.
CHAIRMAN:The Delegate of Czechoslovakia.
Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I agree
with Mr. Leddy. I would only suggest that we should put at
the end of the Interpretative Notes: "The Interpretative Notes
will have the same force, effect and duration as the Articles
to which they refer".
Mr. F. Garcia CLDlNI (Chile) (Interpretation): Mr. Chairman
would we not have to mention this facts in the corresponding
Article itself?
CHAIRMAN: The Delegate of Cuba.
Dr. M . DORN (Cuba): Mr. Chairman, I understood that the
general clause which Mr. Leday proposed should cover this idea,
and it is not necessary to repeat the fact in every Article,
because this clause would say that the Interpretative Notes
have the same force - legal binding force - as the Articles.
The question is, whether we could add that they have the same
force, effect and duration.
I. think that that is not necessary, because they have only
the character of interpretative notes. That means that they
have no standing on their own account. Therefore, we know
that in the ,'-. . . ... >:-', changed at a certain
point, the note in itself would have no special effect.
I think the general clause of Mr. Leddy's would cover the
idea completely. Another question relates to whether it is
V E/PC/T/TAC//PV/18
necessary for there to be an introduction saying that "in
interpreting the following Articles, these Notes shall be
taken into account". I do not think that that is indispensableI
because it goes without saying; if one says "Interpretative
Notes" and mentions the Articles, and then gives the content, I
think it is not legally necessary; but perhaps it would be
useful to let the Legal Drafting Committee think it over once
again.
CHAIRMAN: I think the Committee is in agreement that all
that is required is the title "Interpretative Notes"without any
further heading. We can leave it at that.
The only comment I would like to make is that I do not think
this should be labelled "Annex A" but rather "Annexe I". If
we refer to the Annexes, Annex A , Annex B, Annex C, Annex E,
Annex F and Annex G all refer to Article I. I think it is
therefore logical they should come first, and this Annex on
Interpretative Notes should be the last of the Annexes. Is
that agreed?
Now, these Interpretative Notes have been compiled .d by the
Secretariat from the notes of relevant Articles of the Charter.
I take it that as we have not heard from any Delegation, there
has been no note omitted with the exception of the note to
ArticXI i , to which attention was called by one of the
Delegations. This note is given in Addendum 1.
Mr. R.J.ASHLCKIE (United Kingdom): Mr. Chairman, I'think
there is one other note which will be nDeded to be added. It
arises out of the Retor' of tse 8uomCinmettoe An SrticII SI,
paragraph 3, in documeEtPC/T/'C/191. You may recall that
yesterday we somewhat amended thenal) L paragraph on page 1 of
V E/PC/T/TAC/PV/18
of Document T/191 and produced an extremely inelegant result.
I have since attempted to produce something a little better,
and suggest the following:
"It is understood that except where otherwise specifically
agreed. between the parties to a particular negotiation, the
provisions of paragraph 3 of Article II will be applied in
the light of the provisions of Article 31.of the draft Charter
referred to in." (I have put the Protocol in square brackets
because I do not know what title is going to be given).
That is the wording I would g.ve to that note.
CHAIRMAN: Is the new text of this note, as proposed by
Mr. Shackle, agreed?
M. ROYER (France) (Interpretation): Mr. Chairman , if
I have understood correctly, this note would replace the
note which appears in Document (/318, which would now be of
no use.
There is another small suggestion I want to make and
that is that when one refers to the Article, one could use
the small Latin preposition "ad".
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R..J. SHACKLE (United Kingdom): As regards Mr. Royer's
first remark, I presume that he means that the note which is
at the head of page 2 of Document W/318 would be replaced,
and there I agree with him.
CHAIRMAN: Is that agreed? Agreed.
Mr. J.M. LEDDY (United States): Are all of these notes
what we call "starred" notes -that is, notes that are
V
29 E/PC/T/TAC/PV/18
essential to an interpretation and understanding of the
particular provisions about which there was some doubt in
the drafting? Or do some of these notes cover provisions
that were simply put in with a view to bringing out what might
not have been apparent at a casual reading? I think we
should go through these notes and see if we cannot confine
them to the absolute minimum - those which are really
necessary to bring out obscure points.
For example, I find at the bottom of page 2 it is stated
as to what the signatories of the draft have considered, and
why they decided not to do something other than what they did.
I do not think that sort of note is helpful. It is helpful
to the World Conference, but it is not helpful as far as the
interpretation of the Agreement is concerned, and I think
there may be other notes of that character. I
CHAIRMAN: I think the remarks of Mr. Leddy are very
relevant, and I think it would be desirable that we should go
through each one of these notes to decide whether or not they
should be retained.
We first of all come to the note to Article I on the first
page of Document W/318. Are there any objections to the
inclusion of that note?
Mr. J.M. LEDDY (United States): Mr. Chairman, I am not
quite certain as to what our procedure should be. I wonder if
it might not be better simply to go through the notes and
decide whether they should go in or not, and then go on to any
drafting points.
CHAIRMAN: We will first of all go through the notes and
see whether or not they should be included, and then return to
V
30 E/PC/T/TAC/PV/18
any drafting points.
Are there any objections to the inclusion of the notes
to Article I? No objection.
The note to Article II, paragraph 3, has already been
replaced by the text proposed by Mr. Shackle, so we can take
that as being included.
Note to Article IV, paragraph 5.
Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
apologize for coming back to Article II, but I would like to
say that we made a proposition -that is,about the value of the
Czech grown, in which we agreed that where rates of duties are
expressed, it is understood to be the par value, and so on,
and if these currencies deprciate,in accordance with the
Article of Agreement of the International Monetary Fund, the
Czech Government reserves its right to adjust its specific
rates of duty in proportion to the depreciation of its
currency Now I was wondering whether we should place a
general note here as an interpretative note to Article .II
or whether we should put our proposition directly in our master
list.
31 R 32 E/PC/T/TAC/PV/18
CHAIRMAN: Those Interpretative Notes have been confined
to what we call Starred Notes appended to the Charter. They
are interpretations of the Charter; they do not include
anything in the nature of reservations submitted by one or more
Delegations.
Mr. SHACKLE (United Kingdom): Is It not rather a question
of the basis on which the particular negotiations take place?
If in the case of any p. rticular country the negotiation was on
the casis that there was this devaluation of specific duty, I
think the note should relate to that particular country and not
to others where the basis of negotiation may have been different..
CHIRMAN: I think the proposal of the Czechoslovak Delegate
originally'
was/that this note should be appended to the. Schedule,
Dr. H. DORN (Cuba): Mr. Chairman, may I ask a question.
This reservation is practically a general question of substance
because there is the question in the case of depreciation of money.
The general idea which was expressed in the' London Report was that
adjustment of the specific duties does not mean an increase of
the duty. That is the general idea which was expressed in London
but which is not taken up in the Agreement and if I understand
the idea expressed by the Delegate of Czechoslovakia then it would
mean just the same principle as was expressed is London.
CHAIRMAN: The Delegate of Czecheslovakia.
Dr. z. AUGENTHALER (Czecheslovakia): I think this note
should be placed as a General Note. I do not mind if other
countries are ready to renounce it. In this case we would place
it in our list, out I think it would be fair to have it as a
general note because in Paragraph 1 of Article IIwhere it says:
"Eah contracting party shall accord to thc commerce of the other R 33 E/PC/T/TAC/PV/18
contracting parties treatment no less favourable than that
provided for in the appropriate Schedule annexed to this Agreement
~~er I.. th. .r~n
and hreby made an inte;a part of Thr Ithereof'", the margins
in the scacle would be a customs duty of, say, 100 rowns.
Supposing that in 10 or 15 years the crown would have only 1/10th
of i^alue, according to this provision I would still be bound to
a-Ay. f10 crwns whiasceeh would mean only 1/10th of the sigr
proteoioi That isge why I think it should be made a Fcral nLoe
bo0ts9t s abnormamle proviso which is in most conmnril treaties.
Mr. aCKE (United Kineedoa:) I would like to rmpe..xtth
point of viewp which I have already exyuressed, that it is sure a
mgatter of the unde:hdinegnS n whnmich particular a6iatioahave
ban,ondudc. f these negotiations have been condiauct onl the
s f this undersetaneding, I prbsum. th the -partes to the
negotiation would find no difficulty. If, oan the other hnd,
oney negotiations have not been conductned on things xierstandii
then I consider that notge should enot o into etacsh Schedule bue
t gotiations were conducted not on the basis oderf that u.n(,xrding,.
Mr. J M. LEDDY (United Statgges): I suest the proposal has no
pa9iNrpresent discussion I Tt is a interpretative noWte. 'ie
are aling here with particular provisions of Agthem ,; eet. The
suggestion that spec ificduties may be raised in conjunction with
the depreciation of currency is quite a different matterchj wh has
nothing to do with the general provisions of the eAgrement at all.
It is quite a separate provision and should be discussed on its own
merits. I think we might se t itside and go on with the discus.sion
OEANIM: The proposal of the Czechoslovakian Degle6aiona ws
gicilly mrae in connection with the Schetlle. I therefore
propose that we discuss this paper submitted by the Czechoslovak
Delegation action when we come to consider the Schedule. E/PC/T/TAC/PV/18
The Note to article Iv, Paragraph 5. Any objections to the
inclusion of this Note?
Aarticle V, Paragraph 1. any objections to the inclusion of
this Note?
Article V, Paragraph 2. Any objections?
Article V, Paragraph 7. Any objections to the inclusion of
this Note?
Mr. LEDDY (United Statas): I have a question on that Note,
a question as to the wisdom of putting it in, Prohibitive measures
other than the application of duties is, of course, subject to the
right of any country to invoke emergency Provisions to permit
quantitative restrictions, for example, in the event of an
increase in imports which threatens damage to a domestic industry.
had
I realise the importance the inclusion of this Note/in the Charter
with respect to the position of some Delegations on that particular
paragraph, but the objection I have to include it in the Trade
Agreement in the form in which we are including it here, that is to
say, in the Annex which is to be used as a basis for interpretative
agreement, is that it may throw some doubt on other provisions. as
a matter of fact, all the provisions of the Trade Agreement are
subject to article XVIII of the Emergency Provisions and I see no
reason for taking out a particular paragraph and saying that this
paragraph is subject to Article XVIII. I wonder, therefore, vvhether
we could dispense with this particular Note, It really is not
essential to an interpretation of the Article, and the Note does
appear of course in the Charter as it will serve as an explanation
to the World Conference and to Governments.
34 E/PC/T/TAC/PV/18
CHAIRMAN: Mr. Leddy has proposed that this Note be omitted.
Are there any objections to the omission of this Note?
Agreed. The Note will therefore be omitted.
Article VI. Paragraph 1.
Mr. E.L. RODRIGUES (Brazil): Mr. Chairman, the Note under
paragraph / was omitted?
CHAIRMAN: Yes.
Mr. E.L. RODRIGUES (Brazil): I know we have the Notes in the
Charter but I think for that same reason we ought to have it in the
Agreement. The Brazilian Delegation attaches great importance to
this Note.
Mr. J.M. LEDDY (United States): The only suggestion I can
make is to broaden the Note and say that the obligations set forth
in paragraph 7, as in the case of other obligations under this
Agreement, are subject to the provisions of Article XVIII. That
would make it clear that this does not refer exclusively to
paragraph 7.
M. ROYER (France) (Interpretation): Mr. Chairman, I would
second Mr. Leddy's proposal. If we left the text as it stands
now we would give the impression of an argument per contra that
the other provisions of the Charter are not referred to in
Article XVIII.
CHAIRMAN: Are the words proposed by Mr. Leddy agreed to as
an addition to this Note? Would you give us the words again, Mr.
Leddy?
35
P. E/PC/T/TTAC/PV/18
Mr. J.M. LEDDY (United States):
" "The obligations set forth in paragraph 7, as in the
case of other obligations under this agreement, are subject
to the provisions of Article XVIII".
CHAIRMAN: That is agreed.
Paragraph 1 of Article VI. Are there any objections to the
inclusion of this Note?
Mr. L.E. COUILLARD (Canada): We would agree, Mr. Chairman,
with Mr. Leddy's original proposal that this Note be dropped.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I would
task that this Note be maintained. I think it is a pleasant one
and in its somewhat ironical form it pleases us. When we discussed
Article VI, may I remind the Committee that we requested the
deletion of the words "as soon as possible" and we were told that
the text of the Charter was sacrosanct and that we could not touch
it, therefore that the words "as soon as possible" would be
maintained; but, as a compromise, we would be given an
Interpretative Note. This was a meagre satisfaction, but therefore
'I would request now that this meagre satisfaction should not be
withdrawn from us.
.;AIR CHIPMAN: I think the Delegate of France is quite correct in
his recollection as to what happened when we were considering
Article VI and therefore I take it we would have no objection to the
maintenance of this Note.
Mr. R.J.KLHACTIE (UnKted Xingdom): Mr. Chairman, I feel that
our discussion has shown that everyone of these Notes is specially
dear to the heart of one delegation or another; and I remember
also that all these Notes have been thrashed out with a great deal
P.
36 E/PC/T/TAC/PV/18
of toil and care in Sub-Committees. So I wonder if we could not
take all the rest as read, subject to any particular objection
which any delegation wishes to raise?
CHAIRMAN: I was of the same opinion as Mr. Shackle at the
beginning of this discussion; I was only hoping that none would
be added. However as we have embarked on them, I propose we
hurredly go through them. I will read the Notes off and if any
delegation has any objection to the inclusion of any Note I would
ask him to stop me.
Article VT. Paragraph 2.
Article VII, Paragraph 4.
Article X. Paragraph 2(c). Is there any objection to this
Note?
Article X. Paragraph 2, last sub-paragraph.
We now come to Article XI and I think this would be the place
to add the Note which is given in document W/318, Addendum 1.
Are there any objections to the inclusion of the Note to Article XI?
Article XI. Paragraph 3(b)(i),
Article XII. Paragraph 2(d).
Paragraph 4.
Article XIII. Paragraph 3.
Article X1V. Paragraph 4.
Article XVI. Paragraph 1.
Paragraph 1(a).
Paragraph 1(b).
Paragraph 2.
We now return to these Notes for ony drafting changes.
Will the delegates please indicate to which Notes they would like
to submit drafting amendments.
P
37 E/PC/T/TAC/PV/18
Mr. J.M. LEDDY (United States) Mr. Chairman,. I have come to
the conclusion that these Notes are really more sacred than the
text. I would hesitate to suggest anything in the way of draf ting
changes; but I hope that the Legal Drafting Committee will look at
them carefully.
CHAIRMAN I am sure the Legal Drafting Committee will give
a very careful review of these Notes with a view to improving the
drafting if at all possible.
We shall therefore leave the Interpretative Notes and, in the
time that is still at our disposal, I would like to introduce the
Report of the Sub-Committee on Article XXVI. This Report is given
in document T/194, on the second page of which is an alternative
text of paragraphs 1 and 2 of Article XXVI.
I would ask Dr. Adarkar, the Chairman of the Sub-Committee, to
introduce this Report.
P .
38 J.
MR. B.N..ADARKER (India): Mr. Chairman, the revised text of
Article XXVI was unanimously accepted by the Members of the Sub-
Committee.
I should like to draw attention to two principle changes which
have been made in this Draft as compared with the original version.
The: first important change will be found in the last two sentences
of paragraph 1. it was thought necessary to state that any
negotiations which will follow . Member proposal to modify or
withdraw concessions might include Provision for compensatory
adJustment with respect to other products.
-The same paragraph also provide that in such negotiations the
contracting parties shall endeavour to maintain a general level of
reciprocal and mutually advantageous concessions not less favourable
to trade than that provided for in the present Agreement. This
was a suggestion made by the Delegate for the United States and it
was approved in full Committee.
The second important change will be found in the new paragraph 2.
This a paragraph is divided into two parts; it takes into account the
amendment suggested by the Delegate for Australia, the principle of
which was also approved in full Committee. It covers two cases,
one in which there is no Agreement at all between/contracting parties
primarily concerned, and the other in which there is agreement
between the contracting parties rnnil ¢ _ but some other
contracting party which is substantially affected is unable to accept
the Agreement.
It was agreed in the Sub-Committee that both the contracting
parties with which a concession was initially negotiated and a
contracting party which was substantially affected should have the
E/PC/T/TAC/PV/18
39 E/PC/T/TAC/PV/18
right to withdraw substantially equivalent concessions. What was
a substantially equivalent concession would be determined in the
light of what the party concerned had paid for the concession which
had been withdrawn.
It was also agreed that, sined the contracting party which
proposes to withdraw a concession or to modify a concession has,
under the proposed draft, been given the right to act if negotiations
break down without having to seek the aproved of the Committee or
the contracting parties taken as a whole, the same right should be
given to any other contracting party which is affects by the action.
These are the only important points which need to be noticed
with regard to this Draft.
CHAIRMAN: I wish to thank the Chairman of the Sub-Committee
for the very thorough explanation he has given of his Report, and I
wish to congratulate him, and through him the Sub-Committee, for the
success achieved in reaching unanimous agreement in one meeting.
Are there any comments on the Report of the Sub-Committee?
MR R.J. SHACKLE (United Kingdom): Mr. Chairman, there is just
one question which , would like to ask which is a point of clarification.
At the end of paragraphs 2(a) and 2(b) there are the words:
"application to the trade of the contracting party taking such
action, of substantially equivalent concessions". That is, of course,
very similar to Article XXI, the Nullification or Impairment
Article. Am I right in understanding that that implies a suspension,
whiah is, so to speak, discriminatory and directed against the trade
of that particular party? It seems to me that that is a point
which it is desirable to make clear. One oould read it in two ways -
40
J. E/PC/T/TAC/PV/18
either it would not be contrary to Article I, or, on the other
hand, the concession would be suspended in respect of that particular
party alone, and that would be contrary to Article I. I think we
should be clear what the answer is, I am not quite sure about it
myself.
CHAIRMAN: Mr. Adarkar.
MR. B.N. ADARKAR (India): Mr. Chairman, this question was
not discussed in the Sub-Committee, but, if I may venture my
personal opinion, I would state that the negotiations in question
will proceed more of less on the lines of the negotiations taking
place here.
It would therefore seem to follow that if a particular
contracting party decides to withdraw an item from its Schedule,
the action which v uld be taken by the other contracting parties
will also be in the same form, that is to say. they will remove the
item
from their Schedule, and the removal will therefore affect not
merely the contracting party taking the action, but all the
contracting parties. Therefore, it seems to me that it is not
intended that any discriminatory action should be taken, but this
is purely my personal opinion, and I might state that it might be the
opinion of our Delegation, but this aspect was not considered in the
Sub-Committee.
J.
41 E/PC/T/TAC/PV/18
CHAIRMAN: The Delegate of France,
M. ROYER (France) (Interpretation): Mr. Chairman, I would
like to adhere to the interpretation which has just been given
by the Delegate for India, and it was on the basis of this
interpretation that we accepted Article XXVI.
There is only a question here of withdrawal of concessions;
there is no question of discriminatory measures against a
particular country. The text may not be very clear, but I
would like, as an excuse, to point out that the Sub-Committee
only met once and, -as one author said, we had no time to make
it any shorter.
CHAIRMAN: The Delegate of the United States.
Mr. LEDDY (United States): I think the relative term
here is drawn from the Multification or Impairment clause. There
it Clearly means - and I think it clearly means here - I think,
that the language does mean the concession is suspended in respect
of the trade of a particular Member. That is certainly the
case with regard to the Nullification or Impairment clause. If a
particular Member takes action contrary to the Charter, other
Members may suspend the application to the trade of that Member
of Concessions granted. That means that other countries should
not be penalized because one country has failed to carry out its
commitments,
But this, I think, is probably a different thing-and if it
is the desire of the Committee to provide for the withdrawal of
Concessions negotiated with the country which initially withdraws
the item from the Schedule, I think we had better say so, because
this Ianguage definitely does not mean that. It reads "If such
action is taken, the contracting party with which such treatment
S .
42 E/PC /T/TAC/PV/18
was initially nagotiated and other contracting parties
shall be free to suspend the application to the trade of the
contracting party taking such action of substantially equivalent
concessions."i
There is no authority to suspend the application of those
concessions to the trade of other contracting parties who are
entitled to the concessions. I think we need to re-cast that
and make it clear. I think probably the non-discriminatory
action provision is the right one.
CHAIRMAN: The Delegate of India.
Mr. B.N. ADAKAR (India): Mr. Chairman, I wonder whether
there would be any objection to deleting the words "to the trade
of the contracting party taking such. action" in Paragraph 2 (a),
and also the similar words - "to the trade of the contracting party
taking action under such Agreement" - in Paragraph 2 (b), in
order to make the point clear.
CHAIRMAN: The Delegate of the United States.
Mr. LEDDY (United States): Mr. Chairman, I think if we
mean non-discriminatory action to adjust the balance of the
Schedules we mean withdrawal and not suspension of concessions.
I would like some changes to be made before the formulation of
the last four lines of Paragraph 2 (a) and Paragraph 2 (b) . It
Would then read as follows: "Shall then be free, not later then six
months after such action is taken, to withdraw upon the expiration
of 30 days a ter written notice of such withdrawal is received
by the Committee of such substantially equivalent concessions
as have been initially negotiated with the contracting party
taking such action." The same changes would be made in the
last four lines of sub-parapraph (b)
43 E/PC /T/TAC /PV/18
CHAIRMAN: The Delegate of China.
Mr. D. Y. DAO (China): Mr Chairman , I know it is very
difficult to cover all the casus we can think of. I think
this is the best text we can produce. However, even with the
amendment suggested by the United States Delegate, we have not
covered the case in which a contracting party which may be
affected by the withdrawal of substantially equivalent concessions
withdrawn by the country taking the counter action against the
first contracting party.
However, if it is understand that the contracting party which
is affected could take action under the Nullification or
Impairment clause, I would be satisfied with the text.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom) Mr. Chairman, I think
we have got to put a limit to what I may call the widening ripples,
and it does seem to me it is probably not desirable to carry it
beyond the stage of the original action and the counter measures.
I think we may find ourselves in great confusion if we do.
I have the feeling that if unfairness does result from the
practical action of those measures, it will have to be sorted out
by the Committee. I do not think we could possibly follow out
all the repercussions
I might say I would agree with Mr Leddy's drafting and I
do feel that this is the right interpretation of the Article,
because this is, so to speak, a negotiation in reverse. It is
not like the Nullification Article; it is something which we
might describe as misbehaviour and the penalty for misbehaviour.
CHAIRMAN: The Delegate IoIndia.ie
1
,
41 S.
45
E/PC/T/TAC/PV/18
Mr. B.N. ADAKAR (India): Mr. Chairman, I think the
substitution of the word "withdraw" for "suspend" is an
improvement, but as regards the second suggestion made by Mr.
Leddy, I order whether some terminology could be employed
under Paragraph 2 (b), because in this case the action is taken
by a contracting party having a substantial interest in the
product, and, in the case of such a contracting party, the
concessions which it withdraws may or may not have been initially
negotiated with the contracting; party taking such action.
I am not sure of the point, but if that is the intention
then it should be confirmed. In that case, of course, with a
slight modification we could say "of the substantially equivalent
concessions as have been negotiated with a contracting party
taking such action under the terms of such Agreement."
CHAIRMAN : The Delegate of the United States.
Mr. LEDDY (United States): Yes Mr. Chairman, I think
Mr. Adakar is right. The second sub-paragraph - Paragraph 2 (b)
would read "with a contracting party taking action under such
Agreement" instead of "the contracting party taking such action."
because Paragraph 2 (b) is broader than Paragraph 2 (a). A
contracting party might be dissatisfied with the compensatory
adjustments which might have been necessary on the part of the
county which did not initiate the action in the first place but
agreed to it as part of a general arrangement. E/PC/T/TAC/PV/18
CHAIRMAN: is the Committee now agreed as to the changes
proposed by Mr. Leddy?
Agreed.
Any other comments?
Dr. H. DORN (Cuba): Mr. Chairman, I only wish to ask a
question. I understood the original proposal of the Sub-Committee
that
to mean/they used the wording "suspend the application" in order
to make clear that this concession does not work any longer
against only one country. That really excludes the application
of the Most-Favoured-Nation clause, because that is a counter-
action against an action taken by this contracting party, and
they said, as I understand it, "suspend the application" in
order to imply that the concession as such is maintained: that
means, it is maintained in favour of all the other countries,
and "suspend" applies to the action country. But now it
seems to me one speaks of withdrawal of the concessions and that
it applies to all countries. That is a substantial charge.
of the sense and not of the wording,.
CHAIRMAN: It was agreed that there was no intention to
in any way interfere with the operation of the Most-Favoured-
Nation clause This Article is headed "Modification of
Schedules". It refers throught to concessions negotiated
"under paragraph 1 of Article II, the Schedules, and there is no
reference in the Article to Article I, which is the Most-Favoured-
Nation clause. Therefore, I think the intent is clear: that
in no way should this Article interfere with the operation of
the Most-Favoured-Nation clause.
Is the text of Article XXVI recommended by the Sub-Committee
as modified by the amendments we have agreed today approved?
46
V E/PC/T/TAC/PV/18
Agreed.
Mr. D.Y. DAO (China): Mr. Chairman, may I ask whether the
same amendment will be made to paragraph 2(b)?
CHAIRMAN: The amendment to paragraph 2(b) is that as
changed by Mr. Leddy, and paragraph 2(b) would read:
"to withdraw upon the expiration of thirty days from the
day on which written notice of such withdrawal is received
by the Committee such substantially equivalent concessions as
have been initially negotiated with a contracting party taking
action under such Agreement".
Are there any other comments?
The text as amended is approved.
Tomorrow morning we shall meet at 10.30 and we shall first
of all take up Document T/195, which is a draft prepared by the
Secretariat in preparation for the signature of the Final Act
and the General Agreement on Tariffs and Trade and the Protocols.
After that. we shall take up the proposed new Article XVII,
paragraph 6 and 7, as proposed by the United States Delegation,
as given in Document W/328, and after that, the text of
Article XXIII of the General Agreement also proposed by the
United States Delegation, as given in Document W/330. We
will then deal with any other points that are necessary
to clear up the text.
The meeting is adjourned.
(The meeting rose at 12.10 a.m.)
47
V |
GATT Library | mj531gz8816 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Eighth Meeting of Commission A Held on Wednesday, 4 June 1947 at 3.25 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, June 4, 1947 | United Nations. Economic and Social Council | 04/06/1947 | official documents | E/PC/T/A/PV/8 and E/PC/T/A/PV.7-8 | https://exhibits.stanford.edu/gatt/catalog/mj531gz8816 | mj531gz8816_90240076.xml | GATT_155 | 12,123 | 73,295 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL RESTRICTED
ECONOMIQUE E/PC/T/A/PV/8
ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
EIGHTH MEETING OF COMMISSION A
HELD ON WEDNESDAY, 4 JUNE 1947 AT 3.25 P.M. IN THE
PALAIS DES NATIONS, GENEVA
H.E. Mr. ERIK COLBAN
(Chairman)
(Norway)
Delegates wishing to make corrections in their speeches should
address their communications to the Documente Clearance Office,
Room 220 (Tel. 2247).
NATIONS UNlES ER
2 E/PC /T/A/PV/8
CHAIRMAN: We were, yesterday, examining paragraph 3 of
Article 24. There we mentioned a reservation or a suggestion
made by the delegate of Brazil and Chile to insert in that
paragraph the words "andparticularly with regard to Members
legitimate need for protection". The delegate of Brazil was kind
enough to say that the same idea was expressed also in an amendment
proposed by the United States delegation, and as he has no amour
propre with regard to his own draft, he would accept the wording
proposed by the United States delegation to the Commission.
I would also mention that the delegate of China has made a
similar proposal, particularly to the "legitimate need for
protection". That is exactly the same idea as the one submitted
by the Brazilian and Chilean delegates, and. which we find in the
United States proposal, so I think we can concentrate on the United
States proposal when we come to it. I hope the delegates of
Brazil, Chile and China have no objection to this. Before we
tackle the United States proposal we should clear away a slight
proposal made by the United Kingdom delegate. You will find it
under number 4 on page 13 of document 19/150. I would ask the
United States delegate whether the idea contained, in the United
Kingdom amendment may be fitted into the United States text.
The, question is simply whether you would agree to"complete such
negotiations? "
Mr. WIETHROP BROWN (United States) Mr. Chairman, I think
that I would prefer to hear what the United Kingdom delegate has
to say. and any other comments that might be made by members of the
Commission. - E/PC/T/A/PV/8
M. BIRtDUC (France) (Interpretation); It is merely, Mr.
Chairman, an observation of drafting. In the English text we read:
"enter ints"negotiation '. In the French text"we read: touvzir
ou de conclude".
LE. R.J. SHOLCL (United Kingdom): The English text reads:
eenter into nLgotiations with such complaining memanr in acoordm ce
with the requirements of paragraph 1 of this Article or to couple te
such" egotlation ".eThe word t;ncgotiate" by itself is ambiguous,
it mign juerelyopen <negotiaeir2-; r tiattons and then do nothing
about It. We thought it was desirable to put not only enter into
negotiations but to carry them through, and that was the main
object of our amendment. - 4:E f/rV/ Lf.M/.rVIcJ
CF.INI&N: Lre there any other further remarks?
DI. T.E.HOLLOWAY (South ifrica): Mr. Cu:,iriln, }
woUl1 like to know what is the process of completing such
negotiations? I. yvu Set to the stage when you complete
negoInations it is somathing which has substance. La
our experience in theso negotiations, we enter into
negotiations but wc find, after a little while, that we
can Get nothing in exchange. N;;,have wa competed the
negotiations by breaking there off then?
haM BJLADUC (Er.:c) (Irj:rrtation): In bit&t ce,
om amendement I think the United Ki:: Emrom iwndment should
read: . . . *water into negotiations with such complaining
Membea in accordance with the requirements of Pvragraph 1
of this Article and to complete such negotiations. ."
instead of "or to c:zplete. . ".
CH"IRJBM: I -::- t so sure. Wit:. r r- to the
words " . * -'L it linds that a Mtmber has, -without sufficient
justification, . . . failed to enter into,. . or to complete
suchdoes ooiations. . ."1, if you zay aand" it ;,e nrt give
exacmmi the same meaning. T-: Mv:bJr :ust co=zit himself to
enter into negotiations and he must commit himself to complete
dom npgotiations. T;,at is the Unit-::O Ei-: jroposal and
bligations fail'e Lz e; @Le ofro cb'igations, the
procedure will fail.
Are there any further remarks?
Mr, ROTSJthink (UaiLod KiaFdom): Mr. Chairman, I i'iirik
I .;.ust say, on the point as to what is meant by
completing such negotiationsS- -Y it must mean to carry them
through to a conclusion if it is possible, in fact, to do so
reasonably.
- /-Di Im f .. I=
.q S E/PC/T/A/PV/6
If circumstances intervene which prevent you from com-
pleting your negotiations, if there are good reasons, that will
provide a good deferece against the imputation, under this
paragraph, that you have failed without justification. You
have got to say whether there is sufficient justification or
not. If some force majure prevents you from completing
your negotiations, that is sufficient justification. If,
on the other hand, you cannot put forward any reason of that
kind, then there is not sufficient justificat ion.
Dr. HOLLOWAY (South Africa): M. I goint out, Mr.
Chirman, that that itoaning is fully covered by tho words
,which tho Unitod 1:Iiaoic D;Lc-:,at tries to eliminate, simply,
"to negotiated.
Mr. R.J. SHAKLE (United KingDom): I imagine is
better to specify that the progress of the negotiations should
be maintained than that they should be completed.
CHAIRMAN: Are where any --ny further remarks?
Dr. H.C.COOMBS (Australia): Mr. Chairman , the Austrelian
Delegation would like to support very strongly the United
Kingdom proposal.
Unless it is made clear that the intention is that the
Members have an obligation not merely formally to enter into
negotiations but to carry those negotiations through to a
conclusion, or to be willing to show cause that the reasons
why such a conclusion was not reached are valid reasons, then
it seems to me that it would be open to any country to evade
the obligation which is intended here merely by opening
negotiations and remaining in a state of suspended negotiation
indefinitely.
S - 6 - - -, - . , _
r. Wi:Ali o,)nited OWtateU-'At%; S>:lusm: , r. ChairLan$t
I thil-.; we are all in agreement that it would be undesirable
if i wtre possible to evade the purposes of this paragraph
by simply appearing at one side of the negotiating table for
an opening meeting and than-finding it impossible to go
Lhead -amore aty xaoIL uhan eel t. I fZ1 that is what the
gdomeielegation C l.,>ticn, anelegaher De.Lietions who have
spoken, are trying to awvoid. I onder if some phraseology
could be found to cover the cameeof a Me-bar who failed to
enter into-negotiations or unreasonably delayed their com-
plerhaps Purihsas we ould put .some language of that kind
into the report, semthat a M:;ber could not just make a formal
gesture and then sit back and go no further.
Dr. -HOLLO LYf(SouthL Alrica):ntro you i;ituduce the words
tle:tar into negotiawhen y", y you have got to say something
more;.whereas, if you use the words of the original draft, then
it includes the whole process.
V/8PrCp/ /'. /;
QR P 7 E/PC/T/A/PV/8
While one of the parties is prepared to say something to carry the
thing a stage further, the other party must be prepared to listen
to them, and the United States amendment on paragraph 3, as a
matter of fact, sets a period of time. About half-way down on
page 13 of the United States amendment they say: "... failed,
without sufficient justification, to negotatet with such complain-
ing Member with a reasonable time." I think If you use the word
"negotiate" instead of the six words which mean the same thing,
then this United States amendment covers the whole position.
CHAIRMAN: I think that we can now say that everybody is in
agreement with the idea behind the United Kingdom proposal, so what
remains is simply a drafting question, and I think what the South
Africa delegate has just said is extremely clear and true. The
word "negotiate" cannot only mean to take one's place at a table at
a first meeting, but it means everything connected with the negotia-
tions, and if you.add to that "within a reasonable period of time"
'it-emphasises that it should be the whole procedure of mutual talks
to arrive at a solution of the problems. before the delegations
cone erned.
So if the drafting ad hoc sub-committee can introduce some words
to make it still clearer, so much the better. So I think we willd1i1l
leave it like that and let the drafting sub-committee look into it.
Mr. R.J. SHACKLE (United Kingdom): C rmr.aiman, I would
Wsy'ust this: I think there is a certain point of substanc e
underlying this and it is desirable to clear it up. The intention
in this .paragraph, as I think we have always read it, is that it
should be open to the Organisation to say to a particular Member:
"You have not done well enough in these negotiations: you have not
contributed enough." That is surely implied in the words "having P. -8 - E/PC/T/A/PV/8
regard to the provisions of the Charter as a whole" , because that
would permit allowance to be made by the Organisatiop for a country
which was in process of economic development - something of that
kind. That surely implies that the Conference has the right to
say that -the contribution which the particular ,courntry has brought
to these negotiations is not good enough. We should be clear as
to whether that is what we mean to say or whether it is not.
M.BARADUC (France) (Interpretation): I only wish to say,
Mr. Chairman, that the French delegation fully agrees in substance
with the United Kingdom amendment and the comments. which the dele-
gate from the United Kingdom has just given us. There is only
therefore a question of form and I am sure the sub-committee could
settle it.
CHAIRAMAN: I believe we could be safe in saying that the
' whole Commission agrees with the underlying idea of the United King-
dom proposal and we now should proceed with the consideration of, the
United States proposal. You have it before you and have already
discussed it in some detail. I would like to know whether the
United States delegate wants to explain it further.
MR. WINTHROP BROWN (United States): Mr. Chairman; I think
that the only point of substance has already been discussed. The
remaining changes which are suggested in our amendment are simply
drafting changes and I think should. be examined as such.
CHAIRMAN: May I take it that the Commission agrees to the
United States re-draft? J. 9 E/PC/T/A/PV/9
ER. P.G. OLDIN (Chile) (Interpretation): Even since the
debate in London, and certainly after the debates in New York, we
have been concerned about the different interpretation which might
be given to certain words in the Charter. These words are used
when no meaning can be clearly defined and when it is impossible
to find the exact technical terms or linits of concessions which
co uld be made by Members or to Members, and in this case we have
used time and again the word sufficientt", when it is stated
"without sufficient justification".
I realize fully the difficulty to find an exact term to define
these things, but I am afraid the word "sufficient" might be
subject to various interpretations, according to the good or bad
tempers of the interested parties or their own conceptions or
theories on the subject, or even to their tendencies of the moment.
I wonder whether it would not be possible to find, either in
some commentries on this particular paragraph, or in the
conference; documents, or, which would be even better, in the text
itself a defiinition which would be nearer our intention than the
word "sufficient ". I think the word "sufficient" may be dangerous,
as I have explained, because it may be interpreted in different
ways.
Secondly, when comparing the suggestions which wezmacle in
New York, and the suggestions Embodied in the Chinose proposal
with the terms used in the Unced. St-t-As proposal, -I wonCler whether
they are; really eauiv2lent, a ;s has been said here. Sometimes there
may be what appears to be a very small change which m-y matter very
little, but sometimes even a small change might matter a lot,
and it might even alter Taotically the whole meaning. I think the
words "legitimate need for protection" are not exactly equivalent
to the words "econorzic position of a K:ember", an( I ami not qcuiite J. - 10 -
sure, especially in view of the place ln the text of the words
"economic position of a member" in the United States text, which is
vary different from the place which the similar proposal has in the
Chinese proposal. I wonder whether we are not having here a change
in the field of application of that sentence. When it says in the
New York text "if it finds that a Member has, withouit sufficient
Justification, having regard to the provisions of the Charter as
a whole", and so on, it would be much better if we could find some
sort of criterion enabling us to define the word sufficient", and
we might, as was said in the New York and in the Chinese proposal,
add something regarding tho legitimate need of Members.
If we amalgamate these two ideas, that is, the definition of
the word "sufficientt" and the "legitimate need of Members", we might
find the element enabling as to reach the aim we are pursuing
Of course, we would not reach an aboslute ogrtainty, but we
would reach at least some sort of relative certainty. I am in
no position at present to suggest the precise text, but a text
could easily be deduced from my statement, and I wonder whether
the sub-commiittee would not, if the Commission agrees, take these
remarks into account, and then perhaps it will enable that
sub-commttee to reach a conclusion which will clarify the text,
which, in my opinion, is not quite clear at present.
CHIRMAN : Does any other delegate want to speak about the
American propo sal?
MR. K.S. MA (China): Mr Chairman, I would support the
Chilean delegates proposal to refer the matter to the sub-committee,
so that some sort of a better way of wording it would be possible. -
OaI4i-F R: Yes, of uzurse vre shall send it to the sub-
mmomiettoegb-t he sub-ozme aguidance o have soLcie 6aiCanoe *n the
part f twouold haveisn, ampres ivoultah"vo the iis:prsion th-t the
CoMissiohe eUnited aparoves tiIr 'Jnitd St~.es proposal, ane. even
if eheesub-co=rittee isgpvrftctly willing to 6o through it very
carefully soeasdtv see whether .th; ideas of the Chilean anc
Chinese delegates can. be more fully expl-ined in the text, at any
rate, th sab-forcalled should& neot e ozllc upon to opan -the
ehola crsclssion on thQ mattez.
They shoule try to ameliorate thc- Ueited States text as woll
as Shey dan, but if uhey Ehoule fail, I woald sincerely hope there
wouldmbe nogq estion of sub.xttine dalternative tests, an I hope
hat there warl not beo any n ccssity for making reservations
either, `emmic e predaratdry .todrnttae anm we to noz to our
we
duty propeely if/sand only bunch s of reaservations and. alterntive
texts to the genol conference.
We will smnd.eit to the sub-comoittae, which will take note of
the discensioacewhloh have taks. plAca here. E/PC/T/A/PV/8
CHAIRMAN : Then we have on page 14 of Document 150 a note
that the US. Delegation "may wish at a later stage to make
certain suggestions for a general regrouping of articles under
Chapter V. Meanwhile, it is proposed that Articles 14, 15 and 24
should in any event be grouped together under a single section."
We have a suggestion on the Agenda of other Articles in
Chapter V, but as to the articles we are discussing here, I think
the Steering Committee has already indicated that these Articles
are very closely connected, and obviously must be inserted in the
Charter in such a way that this connection is not broken.
Unless any Delegate wants to speak about that, we go on to
the next item on page 14. Item 6. The Secretariat questions
whether or not the last sentence of paragraph 3 of Article 24 ought
to be omitted as superfluous, as the words are, "The provisions
of this paragraph shall operate in accordance with the provisions
of " article 67. "
as the Committee will see it concerns the Tariff Committee,
and it is the Tariff Committee's job to look after this Article 24,
and we carry it out.
Mr. SHECKLE (United Kingdom): As regards the question of
the last sentence in Article 24 being superfluous, I would say it
may perhaps be superfluous to have a number on a house, but it
is highly useful for the postman, tradesman and everybody else
to have a number they can follow. The same applies here. It is
useful to have the words, even though strictly they may be
superfluous.
CHAIRMAN: Well, I take it that the Committee is not prepared
to leave out this sentence.
Then we go on on page 14. It is suggested by the United
Kingdom that there should be a new paragraph - you will find it
12 13 E/PC/T/A/PV/8
on page 19 of the New York text, in a footnote. Perhaps.
the United Kingdom Delegate wants to speak?
Mr. SHCKLE (United Kingdom): All I want to say is that
we think this suggestion is entirely right in principle, and the
paragraph explains itself. Actually, as is noted in the footnote
on page 19, account has been taken of the point on the text of
the general agreements on tariff and trade, that is to say in
the second footnote, which appears on page 69, where it is said
it is contemplated that it would be included in the appropriate
place in the agreement "undertakings.designed to prevent .the
nullification or impairment of the benefits of the tariff
concessions of the Agreement which would result from any reclassify
-cation of products at higher rates of duty than those provided
for in the Schedules", and then goes on to suggest that "Such
undertakings might take the form either of provisions designed
to prevent such reclassification entirely, during the life of the
Agreement, or to prevent the imposition of higher duties resulting
from such reclassification, or, in cases where neither of these
two courses might be practicable, of provisions for negotiations
to restore the previous balance between concessions and counter-
concessions. "
I think there is no dispute that this is a proper provision
in principle; the only question is whether it is the right place.
It seems to us that wherever you have a provision for negotiations
there should be a provision of this kind worked. in. It may be
that the right place is in the text of the general agreement of
the text of the Charter; or it may be it would be good enough for
this to be worked in, for example, as headnotes to the various
tariff schedules. G.
- 14 -
On that point I have no strong view, but I do think the
principle should be clearly recognised and worked in at whatever
is the most appropriate place.
CHARMAN: The Delegate of the United States.
Mr. WINTHROP BROWN (United. States): Mr. Chairman, we entirely
share the view of the Delegate of the United Kingdom that the
prince ple included in this suggested paragraph is correct and
desirable, and we feel that perhaps it might be more desirable
to have it in the general agreement on tariffs and trade, since
it is, .in essence,a provision which safeguards the specific
concessions which will appear in that document.
CHAIRMAN: The Delegate of South Africa.
E/PC/T/A/PV/8 V
- 15 -
E/PC/T/A/PV/ 8
Dr. J.E. HOLLOWAY (South Africa): Mr. Chairman , this
seems to me to be introducing into the Charter what I think, in
certain religious terms, is called "plenary absolution". Here
are two things which you may do which take away things you have
undertaken to give to other parties. You have given them a
certain tariff classification, you have negotiated the tariff
and, you have agreed to that,and then you take something out of
the classification. You are taking something away from the
other party.
Similarily with regard to tariff valuation. A great deal of
time in now being spent on prescribing certain limits within which
Members will have to keep. This suggested paragraph implies
that there is nothing very wrong about getting out of your
obligations that way and in having benefited, provided that you
are willing-to negotiate about it afterwards. In the meantime,
of course you have got the bnefit of your wrong-doing. I think
that a paragraph like this sugests something wrong, and I think
the purpose of it is suficiently covered by the provisions in
the Charter which enable a Member to complain a against actions in
conflict with obligation that he , has undertaken
CHAIRMAN The Delegate of the United Kingdom.
Mr.R.J. SHAKLE (United Kingdom): I think this question
rather falls into two parts. First of all, there is the
question of tariff valuetion - the question of so altering your
system of tariff valuation as to increase the bound rates of
ad valorem duties. That is the first, part, and the second part
is the question of tariff classification.
Well, so far at the tariff valuation side is concerned , that
is taken care of in, the draft General. Aggreement on Tariffs and
Trade, Article VIII, paragraph 2, and that provides that: "No E/PC /T/A /PV/6
contracting party shall alter the principles "(or tariff
valutions)" so as to impair the value of duty of the concessions
Provided for in the appropriates Schedule annexed to this Agreement".
That takes care of that satisfactorily.
There we come to the part about classification .That is
perhaps a little more complication ,owing to the fact that in a s
;-ooaany countries the interpretaatonv of the tariff classif
b tL iLis a more or less legal .r. Ier ay, therefore, be that
there may be difficulties about providing for an absolute freezing
of olassifcoation.c I think ,hat a- -a mas r of equity and reason
one should provide for the freezing of one's classification,
but if that is not possible, one may need to have an alternative
resort; and it will be observed that in the second footnote to
Article VIII of the Gencral Ageecment, ehose two alternatives
are mentioned--either tho possibility of freezing or, if you
oa~not cannze, teen compensatory negotiations. It leaves that
question unresolved. We ought, I suppose, to attempt to resolve
it. As I say, I think our feeling would be that freezing is
the right course, if it is possible, but it is perhaps open to
doubt whether it is possible, and whether we now have to accept
the inferior alternative of possible compensatory negotiation.
CL;IRXLCHAIRMAe Delegate of Canada.
Mr. J.J. DEUTSCH (Canada): Mr. Chairman, we are in
agrEtment eeth the proposal of the United Kingdom. We think it
woud be disirabee to freeze th- classification, but do not think
that that is practicable, because tariff classifications are not
completely specific. In many cases, classifications are rather
general, and there is always the problem of interpreting the
eassifCclation. A11 goodllare not specifically mentioned in
- 16 - V - 17 - E/PC/T/A/PV/8
tariff classifications and many countries have machinery for
interpreting classifications, and from time to time rulings
will be given which may determine the classification of a
specification. Now, that .ruling may be contrary to the
understanding of the parties to the Tariff Agreement, and there
should be room, therefore, for an adjustment to take place.
For-that reason I do not think it is possible to freeze the
classifications;. therefore there must be a procedure for
dealing with the inevitable changes which have to take place
in such classifications.
CHAIRMAN: I do not quite understand the position. we
negotiate the binding of certain items of our tariffs. How is
it then possible that we should be free to modify our tariff
classification in such a way as to increase the duty? It is
up to us. We can modify our tariff classifications as much as
we like, but I should have thought that we could -not go it in
such a way as to increase the duty. I may be under some
misapprehension, but that is how I look upon it--more or less
in the same light are the Delegate of South Africa. Is it wise,
in the Charter, to take it for granted that countries, having
committed themselves to certain maximum rates for certain duties,
should alter their national rules or regulations in such a way
-as to make the concession they have given inoperative? ER
- 18 -E/PC/T/A/PV/8
Mr. J.J. DEUTSCH (Canada): Mr. Chairman I just want to
clarify what I was trying to say. The trouble is that, in some
oases at least, we do not always know precisely what we have bound
because the tariff classification is in general language and way
include a great range of commodities,and none of us knows exactly
all the commodities that come within a particular classification -
neither of the parties may know. They know it covers this general
group of goods, but there may be a specific Item which no one knows
exactly whether it is there or not. that has great significance,
but later on a greater significance is attached to an item and the
matter is referred to a tribunal in some countries, and a ruling is
given which may change the situation from what could have been
reasonably understood at the time. I think there should be some
provision for adjusting the situation .when that situation arises.
On the general point, Mr. Chairman, I am fully in agreement with
you. This is purely a technical problem.
Mr. R.J. SHAKLE (United Kingdom): Mr. Chairman, the point
which was raised calls my attention to the inaccuracy of the wording
'of the United Kingdom proposal on page 19, because it speaks of
altering its tariff classification. Well, that is not really the
point as I now see it. The point is that, when the classification
that is to say the specification of the items or particular products
may be transferred from one item to another as the result of a
decision, the wording there needs some kind of amendment. The
footnote on page 69 to Article VIII has expressed it more accurately
because it speaks of the reclassification of products. We should
have to think how to change the wording of this particular clause. - 19 -
E/PC/T/A/PV/8
CHAIRMAN: I understand the situation very well now, and I
would like to know whether any delegate is in disagreement with the
general principle of the United Kingdom proposal?
M. DESCLEE DE MAREDSOUS (Belgium) (Interpretation): I have
no special objection against the general framework which has been
mentioned of the United Kingdom proposal, but I think the procedure
should be studied in greater detail and with greater care. I think
that the general guidance was omitted and as regards the procedure,
the Sub-Committee would not be in a position to draft. For
instance, when it mentioned, in the United Kingdom amendment in the
new paragraph, "further negotiation", are we to understand that the
negotiation would be carried out according to the provisions of
Article 24, and, to be more precise, would it be the case that a
country refusing alteration in the tariff would have recourse to
the Organization? This is a very difficult question, and I would
prefer for myself a formulation, for instance, that in such a
case the Organization shall refer the decision of a question to one
of its technical Sub-Committees, as it is a very highly technical
question.
CHAIRMAN: My own view, before I ask for the opinion of the
United Kingdom delegate, is that I would say that this proposal was
made in New York as an addition to Article 24, and I think meet
members of the Drafting Committee have understood it to mean that
the procedure of paragraph 3 of Article 24 should apply. As to the
Belgian delegate's suggestion that the Organization, in applying the
procedure, should make use of the technical Committee at the disposal
of the Executive Board, well, I think it is a foregone conclusion to
think that the Commission would meet for exactly the same purposes.
I do not think that raises any great difficulty. - 20 -
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman, I
would like to say that I agree with.what you have just said.
It seems to us that this is a case where a tariff agreement
made in pursuance of Article 24 has, so to speak, gone wrong.
It has gone wrong through the re-classification of some products
which detracts from the value of the bargain as originally
struck. Clearly it is right that any further bargaining shall
be under the sane procedure exactly. I would also like to say,
whilst I am speaking, that the question has been raised as to
whether the proper place for this is in the Charter or in the
General Agreement on Tariffs and Trade. I would have thought
myself it was right it should be in both, because the principle
will surely apply to the original negotiations and any subsequent
negotiations.
CHAIRMAN; The Delegate of China.
Mr. K..S.MA (China): Mr. Chairman, the Chinese Delegation,
whilst not objecting to the United Kingdom proposal in principle,
is not quite in favour of making this addition. For instance,
the import tariff of China has not been revised for more than
ten years and requires re-classification to meet the actual
needs of the moment.
Even during the present tariff negotiations with other
Member countries, the Chinese Delegation finds it very difficult
to maintain the present classification without making considerable
readjustments. For this reason, we do not quite support the idea
of making another additional paragraph to this Charter.
CHAIRMAN: I should have thought that the difficult position
in which China finds itself should render you still more interested
in having such an additional paragraph.
E/PC/T/A/PV/8
S S - 21 - E/PC/T/A/PV/8
Mr. K.S.MA (China): Mr. Chairman, the fact is that, as I
have, said, we do not quite object to the United Kingdom proposal
in principle. We might agree to it in principle, but there are
great. difficulties in the way. For instance, in our tariff
we have about 600 items, whereas in the tariffs of most of the
countries of the world they run up to several thousands,
perhaps as many as 10,000. For that reason we need re-classi-
fication very badly and this new paragraph might put great
difficulties in our way when we make this re-classificat ion,
We do not entertain the idea of increasing tariff
rates wherever possible, but in the re-classification it may
happen.
Mr. R.J.SHACKLE (United Kingdom): I can appreciate
that that is an argument against the freezing of classification.
Surely not, because any changes which take place, and which
affect a private bargain already struck, are part of its
value. Our proposal illustrates the need for and desirability
of a provision of this kind.
CHAIRMAN: I am glad to hear that the Chinese Delegate
is in agreement with the principle of the United Kingdom
proposal. He hesitates because he anticipates that in his
country there may be some re-classification that might be
interpreted by some other nation as dealing with increasing the
duty.
I venture to suggest that it would be much better for
him - and would be quite a legitimate thing,- to be willing
to re-open negotiations in order to settle this difficulty than
to commit himself and then to alter his classification, because
then, not knowing the way out of it, he will have gone against
his obligation and there will not be any clause in the Charter
to cover him. E/PC /T/A/PV/8
22-
I really feel it is in his interest that this clause should be
inserted. I Apologise for pressing the point.
I do not expect the Delegate of China to give an answer
now, but I think he would agree that generally the Commission
accepts the principle of the United Kingdom proposal.. The
drafting will be done by the special sub-committee and there
the Delegate of China will have an opportunity - as he is a
Member of the sub-committee - of seeing whether the final
result is acceptable.
As to the question of where the special sub-committee should
place the draft they will prepare, I take it that it ought to
be in Article 24, as originally intended by the proposal
which they accept. At the same time, as a number of these
Articles will have to be referred to in the General Tariff
Agreement, it will also have to go in there, but only as lent
from the Charter for the purposes of the Tariff Agreement,
The Delegate of the United States.
Mr. Winthrop G. BROWN (United States): Mr. CHAIRMAN. I
am afraid I must maintain the position, at least for the present,
that we feel it would be preferable for this matter to be
covered in the General Agreement.
S - 23 -
E/PC/T/A/PV/8
CHAIRMAN: The delegate of Belgium.
M. C.D. de MAREDSOUS (Belgium) (Interpretation): I wish to
stress two points, Mr. Chairman. In the first place, the
interested country will be in a position to alter its methods of
classification without prior justification. In the second place
the procedure which is suggested is not more strict, therefore,
than for the initial classification. I therefore draw your
attention to these two points and make some reservation on the
choice of procedure to be adopted and on the extent to which
modification can be met without previously advising the Organization.
CHAIRMAN: Normally, I would be reluctant to refer this
question to any ad hoc sub-committee, but in this case all the
delegates who have taken part in the; discussion are members of the
sub-committee, and having adhered to the principle of the United
Kingdom suggestion, I think we can safely leave it to the ad hoc
sub-committee to attend to the drafting of the said text, and àlso
discuss and come to some agreement as to whether the text will
figure only in the tariff agreement or also, as I personally think
it should, in the Charter. Could we not leave it like that?
M.F.Garcia-OLDINI (Chile) (Interpretation): I would like to
say a few words wvhickh are not exactly on the point, but I
seem to have noticed a certain tendency shown by our Chairman,
when he said a few minutes ago that we might leave the remnants
of the discussion to tho sub-committee. I understand fully that
the Chairman, in his capacity as Chairman, should endeavour to
expedite our debates and to gain time, but perhaps on some occasions,
if I may be allowed. to say so, he seems to forget somewhat the rithts
of this Commission.
I realise, of course, the difficulty of the situation - he is always pressed for time by the Steering Committee and the
Secretariat.
The Chairman, on another point on another occasion, said that
he hoped that the text would come back from the sub-committee
without any new alterations or reservations. I would like to
remind him that the Committee is its own master and that a second
reading is always possible, and on that point I would immediately
say that our delegation reserves the right to present new
observations or alterations if necessary.
Also, all the time, the Chairman reminds us of the important
role of the Steering Committee . I am not saying for one
minute that it is his intention, but in so doing he runs the risk
of inducing us to some sort of error. The Steering Committee
appears in that light as the owner of this Conference, but this is
not the case. The Steering Committee is an organ which we
ourselves have appointed in order to simplify our work and to
undertake some work which we do not want to undertake, and to make
some proposals which we are in a position to accept or refuse. I
agree that if we accept them, they have some sort of influence for
us, but this does not alter the possibility of changing them if we
deem it desirable.
If we continue in this way, . I think that we might full in the
same error as we did at the first part of the Conference, that is to
say, we might complete our work in a hasty and incomplete way, and
I would like to remind the Chairman of the instance of the Working
Party on Articles 15 and 23, the work of which was certainly, not
satisfactory, and he himself will probably agree there because he
worked on that Working Party. There was no second reading; the
report of the Working Party was not made available; we were not
even allowed to study one of the Articles. Therefore, I think if
all the time we are imposed upon in such a way by the Steering
Committee, we might have bad results finally, and I very sincerely
wish to draw the attention of the Chairman to this danger.
E/PC/ T/A/PV/8 G - 25 - E/PC/T/A/PV/8
CHAIRMAN: The Delegate of Chile referred to the Steering
Committee and the Secretariat and gave the impression that I shifted
the responsibility for my way of directing the proceedings of the
Commission to the Steering Committee or to the Secretariat.
That is not the case. I do not take any instructions from
the Steering Committee or the Secretariat other than on questions
of procedure, and I even there retain .my right to have m' wnm view.
As to thequ estion that the Commission is sovereign, there is
no doubt of it. I have said that when we refer a question to
ad hco Sub-Committees we hope, and even expect, to receive a Report
that clears away difficulties and presents as far as possible a
unanimous and agreed opinion.. That is not in order to impose on
the Committe ebut in order to help balance the work of this
Committee.
We choose four members of ad hoc Sub-Committees from appropriate
Delegations, those who have shown particular interest in questions
under discussion, and. we think that a small group of this Commission
who have really proved their particular interest is the best working
method; but, of course, it does not infringe upon the sovereign
rights of this Committee. It is quite possible that a unanimous
Report from the Sub-Committee would be turned down by this Committee -
I hope it will not happen, but there is nothing in the Organisation
or this Committee to prevent it.
As to the question of the Working aPrty on Technical Articles,
I beg to mention - if it is not already known - that we got a
request from the direction of this Conference - that is the President
of the Steering Committee, and. the Secretariat - whether it was
possible for us to clear all that in time for Commissions A and B
to be set up at a certain date. I answered. it is possible, but we
cannot then have a second reading - the second reading would come. E/PC/T/A./PV/8
I must hope, in this Committee or the Executive Committee - but
nothing has been lost by that.
We established a number of Sub-Committees in the Working Party
on Technical questions. Most of these Sub-Committees - I think
there are six or seven of them - presented Reports which were
considered and agreed to. Two on Articles 17 and 18 are still under
consideration, and they will, when ready, be presented to, probably,
Commission A, and no time has been lost. It was a very logical
and very reasonable way of handling the problem.
Finally, as a general remark, I do my utmost to press for
speed. We must try to get through with our work within a reasonable
time; but that must not, in any case, be interpreted as an attempt
on the part of the Chair to prevent Members of the Commission from
taking their full share in any question before us.
Mr. GARCIA-OLDINI (Chile) (Interpretation): I would not like
to leave the Committee under the impression that I imply some
criticism of our Chairman.
I never intended to say the Chairman was in any way influenced.
What I said, and what I think we all feel really, is that we find
ourselves pressed all the time by the Steering Committee and the
Secretariat. I understand perfectly their viewpoint, but I ask the
Chairman to keep a balance between the special need of the Steering
Committee and the Secretariat for speed, and our own need and desire
for all explanations which are necessary; and I hope the Chairman
'will be satisfied with this explanation, and that my meaning has
been perfectly clarified.
CHAIRMAN: Thank you..
G V E/PC/T/A/PV/8
CHAIRMAN: We pass on to the last point on page 14
of W/150. The French Delegation proposes the addition
of a new paragraph to read as follows: "The Organization
shall, as soon as possible, fix the maximum rate of pro-
tection, which must not be exceeded by any Member. This
rate may be subject to periodic revision in order to achieve
a progressive reduction in customs tariffs. Exceptions
with regard to certain products may bo agreed to by the
Organization".!
M. BAADRUC (Fancre) I(netrpretation): It has been
said, Mr. Chairman, taht irony is one of teh traist of
teh French mind. The French Dlegateion , Iimmediately
ahsent to say, did not intend to be umohorusw Wen presenting
this aidition. Many ofopur colleagues have already let
it be knownt ha thet ydid not think such a proposal otbe
caceptaleb. However, other Dleegations have thoghut that
it wass implyw itty. That wFs wrong, I umst say, and other
Delegations finally appaeerd to be interested, but did not
know exactly how to apply this addition practically.
I would lie kto give you a serious explanation of our
amendment. I do not intend, in this somewhat stomry
atmosphere, to open a debate which might become impasssioend,
but I do not want to put any of tehDe elgations present in
ny difficulty.E I only wish to say a few words about the reason
for this amendment. I would like to have an exchange of views
on the exact application which it might find in the tariff
negotiations and of the powers to be given to a future
organisation. I would like to remind you briefly of the aims
of our work. I know, of course, that Chapter I is not yet in its
final form; but I do not think that it will be changed substantially
from its present draft.
E/PC/T/A/PV/8 ER
- 2 8 - E/PC/T/A/PV/8
I would like to remind you that it is written in paragraph 1
measures
that "further international/should be taken dealing directly with
trade barriers and discrimination which stood in the way of an
extension of multilateral trade.... etc."" I think that, if we can
see that the Charter contains numerous provisions for the elimination
of any form of discrimination and of customs barriers, the
Organization, on the other hand, will find itself completely
disarmed in the question of tariff. I say this with full friend-
ship and understanding, but it seems to me that it will be
necessary o reinforcet te provisions ofhA rticle 24. I think we
should seek to eliminate from the tariffs these duties which are
really too high - so high as to be prohibitive - and in any case
they restrict,and not improve ,the international trade. They even
do so more than quantitative discrimination. In maintaining in
the tariffs these excessive duties, I think we are going against
our own aims which I expressed in the introduction to our work.Wh en
these excessive duties were established they had two ends. First
fo all to defend the interested countries against i neqiutable
condition sof work prevailing elsewhere in the world. But we see,
in Article 5 of the charter that we are precisely seeking to
establish fair labour standards everywhere and eliminate therefore
these unfair competitions in laobur. If, therefore, this Article 5
is respected, we need not fear at all that there might be any
competition ni tat respect, and therefore the excessive duties
disappear.
The second rectification was that it wasi ntedned, at the time
when these duties were re-established, to protect newly created
industries, ibt since these excessive duties have, in most cases,
been established for a long time, it is to be supposed that these
new industries are now devlepod eot such a level thta htey are now ER
-29- E/PC/T/A/PV/8
fit for international competition on the markets. If we therefore
compare these ideas of excessive rights with the measures which are
legitimate and which we advocate in Article 13 for members needing
economic development, and the way in which the newly economically
equipped countries are to be protected in some cases by the
agreement of the Organization,and if we compere also the procedure
adopted in Article 13 with Article 24, we see that we might come to
a system which might be advantageous to some old country to the
detriment of the newly economically developed ones.
There is, I think, a great interest in establishing a sort of
equivalent between the various grades of protection. The French
government have gathered the impression that it would be much
easier to obtain, either from private interests or from the
parliamentary organization, a reduction of some customs duties if
these were sure that for other commodities other countries would
adopt a similar attitude or will adopt at least equivalent duties.
I wish to draw your attention to these two aspects of the question.
I think our work would be badly judged if we let subsist these
excessive duties, and this lack of balance between some of the
tariffs in various countries.
I wish to add that, if our amendment were considered or
approved under one form or another, I declare immediately that the
government of France would be ready to reduce in some cases
substantially the offers already made,or in any case to limit,to a
given percentage, their tariff duties. I hope that in saying all
that I have not been interpreted as having some bad intentions
against some of my fellow delegates, but I would merely like to ask
them to think it over in general. E/PC/T/A/PV/8
-30-
CHAIRMAN: May I ask if any delegate wishes to discuss this
proposal?
M. DESCLEE DE MAREDSOUS (Belgium) (Interxretation): I wish
to approve fully the French amendment. I think that, especially
the second sentence mentioning a progressive reduction in customs
tariff, is extremely important in the light of the difficulty
and
experienced at present/which might be experienced in future
negotiations. We might wonder whether we really have created, or
are creating, the instrument which would enable an expansion of
international trade and in particular which will, in case of a
crisis, avoid that the various countries close themselves tightly,
which will create an impossibility for an industry to develop
itself.
I know, of course, that since the last crisis new protective
techniques of measures other then customs duties have been found.
It would be comforting to notice that, in one field at least, some
liberal ideas may matter again. S 31 E/PC/T/A/PV/8
CHAIRMAN: The Delegaate of Australia.
Dr. H.C.COOMBS (Australia): Mr. Chairman, I regret that
I find some difficulty in associating myself with the splendid
gesture of the French Delegate.
Unfortunately the proposal assumes that it is possible to
rake a valid comparison between protective rates of duty on the
basis of the numerical percentage value or money value of the
duty imposed. I should have thought that one result of the
deliberations of this Commission was to demonstrate vary clearly
that such a comparison is not only inadequate but cen, in many
cases be definitely misleading.
The justification for a duty depends upon many things not
merely upon the actual height of the tariffs themselves. For
instance, it is our view that in Judging a particular tariff it
is necessary to take a number of things into account;- the stage
of development of the economy imposing the tariff is, in our
opinion, quite a significant factor in judging whether a perti-.
cular tariff is justified. We would also argue that there is
a distinction between new industries about to be established or
in the early stages of establishment and older industries and
therefore in judging a particular tariff you would need to take
into account the age of the infant which is being cared for.
Similarly, we did discuss last year the question of the
criteria which might be applied in the application of protective
policies and I think it was generally agreed - although it was
difficult to give precise expression to this agrear-cnt - that
there should be taken into account the long-term: prospects of
effective operation of the industry concerned.
Similarly, it is our view that the nature of the product
to which the protection is applied is a significant factor, S 32 E /PC/TA/PV/6
Fer instance, we think it is less justifisble wher applied to a
product which is fundamental to the L lintenance of the health
and welfare of the country which is importing the product, or
to a raw material which is essential to the maintenance of the
industries of that country; whereas it is of less significance,
perhaps, to apply protective duties to products which, do not
play such a vital part in the social and economic life of the
community.
In the scv..o way we find in other cases that the reason
for a protective tariff various; in somo cases it is purely
economic in funotion. In other cases there may be social
purposes to be achieved; for instance, the attempt to brine
about a more balanced set of opportunities for the employment
of the people in a particular region which is unduly dependent
upon a limited rango of products, and the achieve nt of those
social purposes may be worthwhile, even at the cost of the burden
which is imposed by the protective measure,
I am sorry to deliver all these exemple but the are
necessary to illustrate the point which it does seen important
to us to ricognise - that ycu cannot judge a tariff merely by
the figures expressing its height and that therefore, if you
sought, as the French Delegate has suggested, to establish a
maximum , that maximum clearly would neod to bu sufficiently
high to provide for all the valid types of pretcetion in
valid amounts Judged by the parposes and the circumstances
and the products, and so an, to which they apply. It is our
opinion that if the maximum were sufficiently high for those
purposes, it would be far higher than would be necessary to
give valid protection cr justifiable protection in other cases
and we are afraid that the effect of it would ba, not so much
to bring about a reduction in tariffs but to offer a 33
justification for many which are now too high. Consequently,
even an attempt to bring down that maximum would either have
the effect of excluding what would appear to be the legitimate
use of protective measures, or, on the other hand, of encouraging
the maintenance of tariffs in countries or on products where
they could, without harz. to the industries or populations con-
cerned, be reduced.
CHAIRMAN: The Delegate of China.
Mr. K.S.MA (China): Mr. Chairman, I fully share the views
expressed by the Australian Deleagte on the Fronch proposal. I
would like to add that it would not be possible to foresee the
many changes which are bound to happen in the industrialization
of a country. It would not be possible beforehand to state a
maximum which would feet future-needs which are have no way of
knowing at this stage. For this reason, the.French proposal
would be beyond our competence to aceept
33 E/PC/T/A/PV/8
S J. E/PC/ T/A/PV/8
34
CHAIRMAN : Are there any farther remarks on this question ?
M. BARADUC (Ferance) (Interprettion): I fear, Mr Chairman,
that my colleagues from Australia and Chile may have wrongly
understood what I said, or perhaps I expressei myself batly,
because when we speak of the maximum rate of protection, we
immediately intend that there should be exceptions and that
exceptions should be necessary. We say so expressly in the
last sentence of our amendment.
We intend that necessary exceptions be dealt with in
exactly the same manner as is envisaged in Article 15 that is to
say the exception in excess of the maximum should be applied only
in agreement with the Organization.
CHAIRMAN: Are there any further remarks?
Mr .J. P. D. JOHNSEN, (New Zealand): Mr. Chairman, apart from
the -admirable intention underlying the proposal from the French
delegate, we feel that it would be difficult for us to give
support to this proposal.
First of all, as tha Australian delegate has pointed out,
there are difficulties in determining just what rate of protection
is required for the particular industry, and as conditions are, of
course, changing from time to time, it is a continual problem.
Apart from that, I know that as far as New Zealand is concerned
we would be very loth to surrender our sovereignty to the
Organization to determine just what protection we should put in
any particular instance. For that reason, I feel that we would
not be able to support this proposal.
CHAIRMAN: The delegate of India. J. E/PC/T/A/PV/8
MR M.P.PAI (India): Mr. Chairman, the Indian delegation
associates itself with the delegations which have objocted. to the
French proposal. There is not much that one could add to the
excellent presentation of the case for undoveloped countries which
the delegate for Australia has made.
There are two aspects to this question. The first one is
whether any particular industry should be protested, and the other
one is what the quantum of protection should be.
On the latter matter, there is no doubt at all that the
quantum must depend on the difference between the national and
foreign cost of production. There is no scope at all for any
arbitary fixation of the quantum of protection necessary once the
decision has been taken that any particular industry should be
protected .
So, also, as regards division of this quentum of protection,
th, question would depend entirely upon a periodical assesement of
the reasonable cost of production within and outside the country.
On the first aspect, there may be a different of view as to
whether any particular industry should. be protected or net, but I
do not see how any country can divest itself of its own severeign
powers, or decide whether or not it is in the national interest
to protect the industry concerned.
F-br these reasons I consider that this proposal is not only
not acceptable to the Indian delegation, but it is also not
workable in practice.
CHAIRMAN: Are there any further remarks. G. E/PC/T/A/PV/8
36
CHAIRMAN : The Delegate of Chile.
Mr. GARCIA-OLDINI.(Chile) (Interpretation): The Chilean
Delegation is sorry to say it cannot, inspite of the interesting
declaration made by the representative of France, accept the
Amendment suggested by France; and this mainly because. first
of all, it would make the development of a country with a smaller
economic potential more difficult; secondly because it would
imply the abandonment of the faculty for each country to say to
.which industry it wants to give protection; and. thirdly, as has
been so well explained by the representative of Atustralia, there
are a great number of factors which enter into the decision to
give a certain protection to certain industries. These factors
cover not only economic reasons, but fiscal reasons, social reasons,
and so forth, and they are therefore absolutely 'imprevisible',
they cannot be foreseen beforehand. Therefore this suggestion
seems to us to be impracticable.
CHAIRMAN: Any further remarks?
Mr. VAN KLEFFENS (Netherlands): May I say Just a word to
support the French proposal, Mr. Chairman. So far we have had
before us two main difficulties. The first is the difficulty of
fixing this maximum rate. Now I am asking myself if the outcome
of the present negotiations would not cover the point.
I mean, once we have agreed on a set of tariffs, clearly
that is an agreeable amount of protection.
CHAIRMAN: I had the impression that you had another point.
Mr. VAN KLEFFENS (Netherlands): That is true, Mr. Chairman.
It is the question of the sovereign rights in deciding what the
amount of protection in the future will be. Well, I would like
to draw attention to this clause, saying that the exceptions G. E/PC/T/A/PV/8
37
"may" be agreed to by the Organisation, not "shall" .
CHAIRMAN: Any further remarks.
The Delegate of France.
Mr. BARADUC (France) (Interpretation); Mr. Chairman, I do not
wish to insist any longer, but I think that the subject still
needs some sort of clarifying.
When I presented my Amendment , and in the explanations I made
a few minutes ago, I had not the slightest intention to
impede the development of countries not yet sufficiently developed.
economically. I think,, on the contrary. that the exceptions envisage
in our Amendment are precisely in conformity with the interests of
those countries.
We think, therefore, the desirability to eliminate excessive
duties exis-ts between countries which have reached a comparable
degree of development, and with the exception of the Delegates
for Belgium and the Netherlands, the degree of the development of
which countries is comparable to that reached by France, I have
heard no remark from Delegates whose countries are developed in the
same way as France at present.
Mr. DE MAREDSONS (Belgium) (Interpretation): I wish again to
say a word in support of the French proposal, and to draw the
attention of the Committee to the fact that the aim of the proposal
is precisely to explain that excessive rates above a certain level
are disastrous; and if a country wishes to have rates above the
maximum level, then it is essential they should apply to the
Organisation in conformity with the procedure explained in Article
13. Otherwise the States;hould not remain their own master in the
matter, because this would be absolutely c ontrary to the spirit of
the Charter.
CHAIRMAN: The Delegate of Czechoslovakia. G. 38 E/PC/T/A/PV/8
Mr. MINOVSKY (Czechoslovakia) (Interpretation): I wish to
say a few words after the statement made by the Delegate for India.
He said we had to deal with two problems. First of all our
industries should be. protected; and secondly what measure of
protection should be granted to those industries.
Well, I would like to remind you of my experience when I had
some conversation in China with industrialists. To-day, when one
speaks of protection of new industries, it seems one deals with the
problem in the same way as a hundred years ago. Then the countries
had little experience in industrial matters. They had no qualified
experts, and no machines, they were really experimenting.
Therefore, if a country started developing new industries,
they naturally refrained from helping the other countries. To-day
the situation is completely reversed. 39
The countries whe wish to develop a new industry can, in
their turn, have at their disposal the best machinery, capital
and first-class experts, and the countries with a. large population
have markets --home markets-- which cannot be found, for instance,
in Europe, and the Chinese industrialists with whom I spoke
admitted that there might be industries against which the old
countries should be protected, not the now ones.
Take, for instance, the shoe industry in China, with a market
of 400,000,000. It there were a new shoe industry there, I think
our Czech firm, Bata, would need protection against this Chinese
shoe industry, which would be equipped with most modern machinery
and would be able to produce more cheaply. Therefore, I remind you
also that the Charter makes it an obligation to the Members to give
all the necessary technical help and expert assistance to the countries
who want it.
Of course, I apologize for taking China as an example, but it
is simply due to the fact that China is a very large country, and
I had conversations there. I Just want to take this as an example,
to show the difference in the protection as it was envisaged one
hundred years ago, and as it might be envisaged now; and only to
answer the Delegate of India that , of course it is not advisable
to have protection in general. But from-time to time it may be
necessary to ask what industries should be protected by tariff and
what industries do not need protection even if they are newly created.
CHAIRMAN: Are there any further remarks?
Mr. K.S. MA (China) Mr. Chairman, I Just want to sum. up
our points. Our position is that a protective policy shall be
determined by each Member itself and not by the Organisation on its
behalf. Secondly, there may be; a very great variety of industries in
E/PC/T/A/PV/8
v 40
a given. country which require protection in different degrees.
It would be impossible to fix the maximum rates for each
industry requiring protection. In other words, protection
would have to vary from industry to industry -- it would be
difficult to fix a maximum rate for all the various industries.
Thirdly, the multilateral tariff agreement reached may be
regarded as the maximum protection permissible for all those
products which have been agreed upon it the negotiations.
This summaries our position.
CHAIRMAN: Well, after having heard a number. of.:-
Delegates, I find that opinions are very divided. There is
some preponderance against the French proposal I do not quite
know what the Committee would like to do. There is the poss-
ibility of sending it to the ad hoc Commission asking them to
continue to work on it. I do not think that would lead to
anything so I would rather take it this ways it is a proposal
to add a new idea to the text of the: Dr'aft Charter. That idea
does not need general consent from the Commission and. for that
reason can hardly be retained. On the other hand, the text
of the French Proposal does not make it necessary that it should
figure in the Charter. There is nothing to prevent any Delegate.
when the Organization is set up, from raising the question either
in the sense of the French proposal or in some other sense, and
we should then be in possession of the Gineral Tariff Agreement,
which will be a factor to be taken into consideration, when the
Conference will define its attitude if this question is brought
before it.
My suggestion would, therefore, be, with due respect for
the French Proposal, that we decide that we are not Being to
E/PC/T/A./PV/8
V V . 41 E/PC/T/A/PV/8
.pursue the discussion, and we are not going to insert such a
stipulation in the draft, but leave it entirely .:-ee for any
Delegation to follow.out, tue idea of this proposal when the
Organization will come into bein.,
The Delegate of Brazil.
M. J. TORRES (Brazil): Mr. Chairman, we of the Brazilian
Delegation would like very much to support your suggestion.
We are not at all in agreement with this amendment. We do
not think it can work, and if it should be insisted upon, we
are afraid that it might be a very great difficulty for us
at this Conference. We think that if . anything at all
to do with the undeveloped countries -- and from what the French
Delegate says I have my. doubts -- then, of course we could not
agree to it. If it is something else, then my suggestion
would be that it be put more clearly. In any case, we believe
that the ultimate purpose of this amendment will be reached
in a more Eroper way by the operation of the I.T.O. itself,
and we make our own the words of those Delegates who have
revealed their difficulty in visualising how this could
possibly be put into effect. ER
E/PC/T/A/PC/8
42
CHAIRMAN (Interpretation): I understand that the Commission
approves my suggestion which consists in not retaining the
proposal herein Geneva, but leaving full freedom to any delegation
to raise the question again once the'Organization has come into
being.
M. BARADUC (France) (Interpretation): I do not wish to
prolong this debate, but I persist in saying that there is some
misunderstanding on the tart of the delegates who spoke against the
French proposal. It was never our intention to go against the
interest of the newly developed industries, and I wish to add that,
in taking no provision to eliminate excessive duties which shall
prohibit to the normal trades, we come to a protection which is
exactly equivalent to an absolute quantitative restriction, whereas
the Charter has taken provision to eliminate progressively this
quantitative restriction. . There is nothing against these excessive
duties and this is a complete contradiction to the spirit of our
work.
CHAIRMAN: Might I take it that this terminates our point and
tomorrow we shall take Article 15. I will announce that the Sub-
Committee will meet tomorrow as previously arranged at 10.30 in
Room 210.
Dr. H.C. COOMBS (Australia): I do not wish to delay the
meeting, Mr. Chairman, but before we leave Article 24 there are one
or two points to which I would wish to refer. They are not points
on which we have submitted particular amendments because we are
not certain whether this is the appropriate place to deal with them,
but I would wish to have them mentioned so that, if it is your
opinion that they should be dealt with as far as Article 24, that E/PC/T/A/PV/8
43
it would be possible for the Sub-Committee which you have established
to consider them. Is it your wish that I deal with them now?
ClUIURIN: I am at your disposal, and I take it that the
delegates would willingly sit a few minutes more.
Dr. H.C. COOMBS (Australia): Mr. Chairman, Article 24
contemplates the conclusion between the members of this Commission
of agreements in which they will exchange tariff concessions.
There is nothing in Article 24, nor as far as I can find in other
parts or the Charter, to indicate the period for which that agreement
runs. I think it was understood at' the discussion in Lor-on, that
the agreement so reached would bo for a period of three years after
which it would be possible for the parties to terminate such
agreements or to reopen them in part.
It is the other point to which I wish to refer in particular.
Obviously, for countries whose economies are in a process of change,
It is difficult to enter into an agreement for a long period. S
E/PC/T/A/PV/8
44
We have assumed that these agreements will have a period of
three years initially and would, in the absence of their being
re-opened by the parties, continue and that the corsessions
containing reductions of tariffs embodied in the original
agreements would remain in force after the end of the initial
period, unless one of the parties wished to reopen them.
At the same time, it is important, as I remarked, to countries
whose economy is in a state of change that the possibility of
that re-opening should be a real one; that it might be possible
for a country, without having to scrap a whole agreement or -
whole set of agreements, to take out from the concessions offered
on/
an item regarding which the circumstances have changed and/which
it may wish now, for instance, to increase the rate of duty for
protective purposes, because the commodity in question has now
become one for which the country concerned is interested in
entering into production.
It seems to me, therefore, important that we should make
it quite clear:.. - preferably in the Charter - I am not
absolutely certain whether that is the appropriate place-
that the initial period of the agreement is precisely stated.
The terms on which the agreement continues should be precisely
stated and the machinery by which a country can re-open its
agreements, either as a whole or in part, and particularly the
latter, should be set out quite clearly .
Furthermore, that the machinery in regard to the reductions
of tariff on items agreed to should be such as will facilitate
such re-opening and not make it difficult. Only if that is
done will it be possible, I suggest, for countries whose
economies are in a state of change to enter into agreements
as widespread in their character as they would otherwise be. S 4 E/PC/T/A/PV/8
I think it has been suggested, that the agreements should
be multilateral in form and application so that, in effect,
there would be one agreement to which all the countries would
be parties.
When you come to examine the problem of re-opening the
agreements in relation to a particular duty, that does seem
to me to offer certain difficulties. You may have entered
into an agreement with one country, with the right of other
interested countries to know what is going on and to parti-
cipate in the discussions if they have a clear interest.
if, on tha other hand, you find yourself) as a result
of that set of negotiations, bound to 44 other countries in
relation to this particular item and you wish-to re-open it,
you would, I presume, formally be obliged to obtain the con-
currence of 44 other countries to. whatever it. was you proposed
to do, oven though the countries primarily concerned would
be perfectly willing to permit you to make the change which
you wished to do.
If the agreements were bilateral, in the sense that they
were between the pairs of countries with which they originated,
but the concessionsembodied in them applied to all the Members
that would make it clear that in re-opening an agreement in
relation to a particular commodity, your negotiations would be
directed towards the country with whom you originally made the
agreement, with again the clear right pf other interested
countries to be consulted, as they were presumably consulted
in the original agreement. However, we would not wish to be
dogmatic about the question of the form of the agreements,
we merely mention that as a difficulty that does seem to require
examination, S
So I would ask , Mr. Chairman, that the sub -committee which
deals with VQ.s.ca 24 should -also concern itself with the questions
of th period of th. aBretments, the form of the a3reements and tha
machinery for th,: rc-opcninE; QV aGre~monts in part or as a wholo,
CHAIRU: T;: _ s-'N;rt-
Mr. Jo YZUtDwER (Nvrway): M.. C::. n, before we leave
this question, there is just one point I tk."d liko to Mention,
80 that the sub-conmitte, can study it, :L ou know, most
countries have the ad valorom system whilst in oertuin countries,
as in Ncrwuy, we have to a certain extent tho specific duty
system, T: e i:: .:t be a serious rise in the international level
of prices which would, in fact, mean u ro;uction in the specific
duty, 0 n otner hand, there miF;ht be a serious fall in the
price level, which would mean a rise in the specific duty.
I T^;z'`n an ticla dealin- with the problems we are dis-
cussing here ought. to have a proviso to solve this particular
problem*
CHLIB;.: J..t;~ z. lb-rd to the suggestion of the Ncr.ian
Dl. LS i-e t~t will be sent to the sub-comittae, of which he is
himself a YEmber.
;5 to the most importent question brought up by the Delegete
of iustral±e, I also think the sub-conmitt.e should consider this
and, in particular, whether they woula be able to draft an
appropriately clause for insertion in the General Tc-rff agreement .
It is another question whether -it is necessary or desirable or
possible to have it inserted in the Charter, but in the Tariff
Agrooment I feel it is quit important that some; clause should
be insertd to enable the most latcrstod parties in tariff con-
cessions to re-op:n their discussions without being prevented by
the faot that their concessions have been incorporated in the
mittee, Agreaont; that would b._ entirely up to the sub-aooinittee6
The Meeting is closed,
The Moeting rose at 6.20 g.m& |
GATT Library | dm479bg8205 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Eighth Meeting of Commission B held on Wednesday, 11 June 1947 at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, June 11, 1947 | United Nations. Economic and Social Council | 11/06/1947 | official documents | E/PC/T/B/PV/8 and E/PC/T/B/PV/7-11 | https://exhibits.stanford.edu/gatt/catalog/dm479bg8205 | dm479bg8205_90250077.xml | GATT_155 | 112 | 708 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
E/PC/T/B/PV/8
11 June 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
EIGHTH MEETING OF COMMISSION B
HELD ON WEDNESDAY. 11 JUNE 1947 AT 2.30 P.M. IN THE
PALAIS DES NATIONS. GENEVA
HON. L. D. WILGRESS
(Chairman)
(Canada)
Note: Owing to the fact that it was necessary for
Commission B to meet at the same time as Commission
A it was not found possible to provide a verbatim
record for the 8th Meeting of Commission B. An
expanded Summary Record has however been prepared
and will be distributed to Delegations.
NATIONS UNIES
RESTRICTED |
GATT Library | tm256rn1980 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Eighth Meeting of the Tariff Agreement Committee held on Tuesday, 2 September 1947, at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, September 2, 1947 | United Nations. Economic and Social Council | 02/09/1947 | official documents | E/PC/T/TAC/PV/8 and E/PC/T/TAC/PV/6-8 | https://exhibits.stanford.edu/gatt/catalog/tm256rn1980 | tm256rn1980_90260025.xml | GATT_155 | 14,087 | 84,694 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQU E
ET SOCIAL
RESTRICTED
E/PC/T/TAC/PV/8
2 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
EIGHTH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON TUESDAY, 2 SEPTEMBER 1947, AT 2.30 P.M. IN
THE PALAIS DES NATIONS, GENEVA.
Hon. L.D. VILGRESS (Chairman) (Canada)
Delegates wishing to make corrections in their speeches
address their communications to the Documents Clearance
Room 220 (Tel. 2247).
should
Office,
Delegates are reminded that the texts of interpretations., which
do not pretend to be authentic translations, are reproduced for
general guidance only; corrigenda to the texts of interpretations
cannot, therefore, be accepted. E/SC/T/TAC/PV/8
CHAIRMAN: The meeting is called to order.
When we terminated our discussion last night, we were dealing
with Article I and we had not completed the discussion on the
suggestion of the Australian Delegate that Article I should be
transferred to Part II of the General Agreement. The Australian
and French Delegations had given some technical reasonswhy it would
be difficult for them to give full effect to the provisions of
Article I without a change in legislation during the period of
provisional application. At that point we broke off the
discussion and so I would suggest that we take up this point first
before passing on to other questions arising out of Artticle I.
The Delegate of Cuba.
MR. H. DORN (Cuba): May I only mention, Mr. Chairman, that
there may be similar difficulties also for Cuba because of the
necessity of adapting national legislation to the requirements of
Article I.
CHAIRMAN: Are there any other comments?
The Delegate of Syria.
MR. H. JABBARA (Syria) (Interpretation): The same difficulties
exist for Syria.
CHAIRMAN: Will it be possible for the Delegates of Cuba and
Syria to elaborate a little more speciflically the difficulties that
arise in this connection.
/
MR. H. DORN (Cuba): Mr. Chairman, the main point seems to us
to be connected with the reservation we had to make to Article I,
2
J. E/TC/T/TAC/ - V/8
that means to Article 16 of Chapter IV, as we have some internal
taxes existing in Cuba which have to be adapted eventually to the
dispositions in Article I, paragraph 1, and which cannot be
adapted without special legislation. Therefore, it will not be
possible to act immediately without previous legislation.
CHAIRMAN: The Delegate for the United States.
MR. W. BROWN (United States): Mr. Chairman, may I ask the
Delegate of Cuba if it is not true that he also needs, legislation
to put the tariff rates in force?
MR. H. DORN (Cuba): Certainly it is. If you will allow me
to say so, I think that has been declared already and is contained
in one of the documents before us.
CHAIRMAN: Are there any other comments?
The Delegate for New Zealand.
MR. J.P.D. JOHNSEN (New Zealand): The comment which I wish to
make, Mr. Chairman, does not refer to any technical difficulty so
far as the application of the provisions of this Article is
concerned, it is more the general question as to whether or not this
particular Article could be accepted.
It contains not only the provision for the extension of the
most-favoured-nation treatment, but also a commitment regarding
increased preferences. We feel that in subscribing to an
undertaking of that nature we are giving away quite a substantial
concession, and before we would be in a position to sign an
agreement t of this nature, irrespective of which part of the Agreement.
it is in, we want to be certain that we are getting some adequate
J. J.
compensation, ei ther through action taken under the Agreement in the
matter of general provisions or in the shape of tariff concessions.
Therefore, our position would be that before we could sign an
Agreement containing such a provision we would require to be in
a position to make an assessment of the provision generally.
CHAIRMAN: Are there any other comments?.
The Delegate of the United States.
MR. W. BROWN (United States): Mr. Chairman, my Delegation
considers that Article I of the Trade Agreement is an essential
provision. I do not believe that we would be disposed to sign any
trade agreement which did not contain it. We think that it should
be in Part I to indicate its importance, so that it would not be
subject to supersession, and we attach the utmost importance to
having it included in that position.
We quite agree with the Delegate from New Zealand that no
country here will sign the General Agreement unless they are
satisfied that it is an agreement that they want to sign, and in terms
of the compensation they want to get. That is exactly our position,
and one of the things that we consider essential is Article I.
Article I has always been, or its equivalent has always been, in our
Trade Agreement the key to our economic and foreign policy.
There have been certain technical difficulties raised by the
Delegates of Australia, France and Syria, who suggest that they
would need to make legislative changes in order to give even
provisional application to Article I. My impression is that, in
the case of the difficulties envisaged by the Delegate from Australia,
most of them are already covered by the exception in Article I itself E/TC/T/TAC/PV/8
or in other Articles which are now suggested for inclusion in the
Trade Agreement, and the coverage of Article I is so insignificant
that we, for our part, would be quite prepared to ignore them for
the period of provisional :application.
The same is precisely true with the difficulty raised by the
Delegate of France, which this Committee has already, in the early
stage of its deliberations, said that they recognised and that they
would not want to insist on immediate correction. The Delegate for
Cuba needs legislation even to out the tariff rates into force so
at any event, to the extent that the other taxes are involved, he
could correct them at the same time.
If the Chairman will permit me, I think it might perhaps
facilitate the discussion if I revert for a moment to the suggestion
made by Dr. Coombs at the end of yesterdays Session with regard to
how the automatic or other supersession of the trade Agreement by
the Charter could be arranged. Could I have your permission to
speak on that point, Mr. Chairman?
J. S
6
E/PC/T/TAC/PV/8
CHAIRMAN: I am sure the Committee will have no objection
to Mr. Brown referring to that important point raised in our
discussion yesterday.
Mr. Winthrop G. BROWN (United States): Thank you, Mr.
Chairman. We have given very careful thought to the suggestion
made by Dr. Coombs, to the effect that the Trade Agreement should
provide that it would be automatically superseded by the
provisions of the Charter unless one of the contracting parties
objected; and that if a contracting party objected we would
meet again, with open minds, to consider that objection and
see how it should be dealt with, and no priority to be given to
what should be included or what should be excluded.
As I indicated in my remarks two or three days ago, my
Delegation would prefer to have a Trade Agreement standing on
its own feet, because it may be that a Charter involving 54
nations would be less satisfactory to the United States on
certain important points than a Trade Agreement negotiated
with a lesser number of countries. Such a separate Trade
Agreement is what was quits clearly contemplated in London,
as will appear from a reading of Section H of Annexure 10
of the London Report.
We fully share the views of the Belgian Delegtion that
tariff concessions are negotiated in the light of and reliance
on certain key provisions of the General Agreement, and if we
are to make and maintain tarif concessions to any country -
whether as a part of a bilateral agreement or a multilateral
agreement - we will have to be satisfied with and be sure of
those essential general provisions. I am sure most other
countries will find themselves in the same position. S E/PC/T/TAC/PV/8
That is why we could not - like the Belgian, Canadian
and other Delegations - agree to automatic supersession. On
the other hand, it is perfectly clear that other Delegations
here attach great importance to having the provisions of the
Trade Agreement superseded by the provisions of the Charter,
and Dr. Coombs's suggestion - a very constructive one - was
put forward in an effort to reconcile those two points of view.
The difficulty we find with Dr. Coombs's suggestion is that
it puts the burden of proof on the parties who may wish to
retain a satisfactory agreement rather than on those who wish
to depart from it. If, for example, we were to be the
objector because we were not satisfied, in a context of the
Tariff Agreement, with some key provision which we had been
willing to accept in the broader context of the Charter, we
would have to face the choice of accepting something less
then we had originally agreed or of withdrawing and
jeopardizing the whole Trade Agreement. We would not enjoy
being in that position. I do not think any country would
enjoy being in that position, and we do not think it is
quite proper for any country to be put into it,
Nor do we like the idea of the possible suggestion of
re-opening this Trade Agreement right after the Havana Conference
if differences do appear between the Agreement and the Charter
on points of substance. It gives an impression of impermanence
to the tariff concessions that we give and receive which we do
not think very desirable. In short, we feel that we should
reach a satisfactory Trade Agreement here and stick to it,
unless there is very good reason to the contrary. That is 8
E/PC/T/TAC/PV/8
what we would like. But we recognise that others around this
table would like something different and that they have real
reasons for the position which they take up.
We have thought this matter over very carefully and, if the
other Members of the Committee f el strongly on the subject and
wish to press the point, we would be prepared to accept the
suggestion made by Dr. Coombs, namely, that the Agreement should
provide - and he will correct me if I am not accurate in
stating his proposition - that Part II will automatically be
superseded by the provisions of the Charter, unless one of the
contracting parties object. If such objection is raised, there,
will be consultation among the contracting parties at which it
will be decided what action shall be taken with respect to the
Agreement.
At such consultation, I should imagine the issue would not
involve the whole re-negotiation of theTrade Agreement but
would be confined to the point of differences between the Charter
and the Agreement: it would be confined to the point which had
given rise to the objection. We could then agree, in the light
of the facts as they existed, either to accept the Charter - and
anyone who did not like that decision could, if he felt it
essential, withdraw - or we could decide to retain the Agreement
amongst ourselves, or some of us, with those who were not
happy withdrawing, or we could find some other solution, but we
would be dealing with a known fact and open minds,
As I say, this solution would not make us completely happy,
but we believe it represents a constructive compromise between
two widely divergent points of view. We are prepared to
accept it and we would hope that other countries here present
would do likewise. 9
P. E/PC/T/TAC/PV /8
CHAIRMAN: We have just listened to a very important statement
by the United States Delegate which, if it meets with the, acceptance
of other delegations should, I think, help a, great deal in
clarifying the issues before us.
As I mentioned yesterday, this question of the supersession of
Part II by the Charter is one of the most important issues which
this Committee has to resolve. It is a question which has a very
direct bearing on the position of countries which have reservations
to Articles of the Charter which are also reproduced in Part II.
This we discussed at length yesterday. I therefore think the
statement that Mr. Brown has just delivered should materially
assist us in clarifying an issue which I thought it would not be
possible to clarify until we had considered various Articles and
had come to Article XXVII.
No doubt the Australian and United States Delegations will be
consulting together and will later on submit to us, in the form of
an amendment to paragraph 1 of Article XXVII, their proposal in
written form.
In the meantime I would not like to leave this question until
we had had an opportunity of further comments from Members of the
Committee and therefore, before taking up the detailed Articles
again, I think it would be useful if we could have any comments
which Delegations may wish to make at the present time on the
statement just made by Mr. Brown.
The Delegate of the Lebanon.
M. Moussa MOBARAK (Lebanon) (Interpretation): Mr. Chairman, I
would like to point out here that each time the Syrian Delegate will
make a comment on this matter or will raise a point on this matter,
he will also be speaking for the Lebanese Delegation, and vice versa,
because our two countries have similar Constitutions and the same
difficulties might arise on the same subject. Therefore if one of 10
P. ~~~~~~~TAPC/T/8i-..C/PV/6
our deeEkegates saKs on this subject it well aeso ou undorstuod
that hu is speaking fer teeegahuo duaDlseiun Es wull.
MHJ JRGN: aThe Delegcte of Norway.
AND. J. o'EL-M:R (Nrway) Mr. Chaiaman, it wps with great
appreciation trae tae Nexwgagivn DvleLtion heard the statement just
made by the Uniteed gStion. Dleato. We do not feel able to
consider immediately the proposal - we wouldelike to soe it in
written fora; but I cLn eay that wo certainly feel that it goes a
vGey loan way to meeting us andeehat we fiol that on this
principle the solution to the deadlock ought to be found.
C.iIM:e The Dolegate of Now Zealand.
Mr.HJ.P.D. JwSNSEN (NeW Zealand): Mr. Chairmen, I also
appreciate the ende evour madlby the Delegate of the United States
to find a way out of this difficult problaem, but I m just
wondering whether it actually does solve the problem. I take it
that there can be no question of automatic replacaement of Prt II
by the corresponding part of the Charter untia bhe Ch.rter
actually comes into force.
Now, the matter that concerns me is the position of countries
which arc unable to accept Part IIAofeehe gro.ment. I observe
that in the ptoppsal pue ul by thi. Delegation of the United States
in documeWt 31PC/T/!i/7.6 the date of signature is put forward to
40 June 1918. It is quite possible that even at that time the
Charter may not be.effectiv. It seemed to me, therefore, that
the position of the country which has not been able to accept an
t-reemant with P-rt II in it is that, at the time of closure for
signatuAg oe the i.reoment, that country would still be unable to
determine its position. 11
E/PC/T/TAC/PV/8
In the light of that, I was wondering whether the solution
would not be - and this proposal was made previously - that in
the meantime all we can agree to is to give effect to the Tariff
Schedules, which would be in operation only for a very limited
period, and it could be on the understanding that the Agreement
containing those Tariff Schedules would be supplemented with
general provisions immediately they were brought down in the
Charter; and if the Charter did not actually come into force by
1 November 1948, which is the date mentioned in the Draft Protocol
to the Agreement, then the countries could agree to meet again and
consider what provisions should be made. It seems to me that
there is that problem in connection with the position of a country
that is not able to accept Part II in the meantime and which at
time of signature of the Agreement might still not be in a position
to accept Part II.
CHAIRMAN: The Delegate of Canada.
Mr. L.E. COUILLARD (Canada): Mr. Chairman, in discussing
this question of supersession a few days ago the Delegate of
Canada favoured the retention of Article XXVII as now found in the
Draft Agreement . Possibly Mr. Brown misinterpreted our remarks at
the time, as he mentioned a few minutes ago that we favoured
automatic supersession. Such was not the case. our view was
quite strong at the time. We have never favoured automatic
supersession and indeed argued on that day for the two-thirds
majority.
However, we have ,given a good deal of thought to Dr . Coombs
suggestion, and it has now been clarified and qualified and made
more precise by the remarks of Mr. Brown. We do feel that we have
gone a long way from the original suggestion of the two-thirds
majority. The first change was to a one-third majority and this p. E/PC/T/TAC/PV/8
last proposal is to one country. We would have preferred to have
seen a self-sufficient and self-contained Agreement. However, in
view of what appears to be the majority opinion and desire, and in
the spirit of compromise which has been shown here this afternoon,
the Canadian Delegation would be ready to make this important step
towards compromise - I say important, because we did consider very
strongly, only a few days ago that the two-thirds majority was
required. We would therefore align ourselves with those countries
who would accept Dr. Coombs' suggestion.
CHAIRMAN: The delegate of the United States.
Mr. Winthrop BROWN (United States): Mr. Chairman, I must
apologise to the Delegate for Canada if I gave the impression that
I thought he approved of automatic supersession. What I intended
to say, and what I thought I said, was that we, like the Canadian
and Belgian Delegates, could not agree to automatic supersession. 13
V E/PC/T/TAC/PV/8
CHAIRMAN: The Delegate of South Africa.
Dr. J.E. HOLLOWAY (South Africa): I am not quite sure that
I understand what the procedure is. If a country objects to the
change, is a decision At bMx by a simple majority - a two-thirds
majority - or must all countries agree?
CHAIRMAN: I think we will have to wait until the proposal is
ready, when we can see what it all means. I think Dr. Coombs
put it very clearly when he explained it yesterday.
Dr. H.C. COOMBS (Australia): As I understand it, Mr. Chairman,
the position would be that the Member objected to a particular part
of the Charter forming the General Articles of the Agreement.
Then his objection would be considered by the other contracting
parties. If they agreed with the objection, then the appropriate
change would be made. If they were quite convinced that he was
mistaken, and that the provisions of the Charter should stand,
then, as I understand it, the country would have to choose between
staying in and accepting the provisions of the Charter as they
stood, or withdrawing from the Agreement. There is the third
possibility that they would agree upon a compromise or a "middle
road", as I think Mr. Brown described it; but in each case there
would need to be unanimous agreement amongst those people who
were the remaining parties to the Agreement.
Dr. J.E. HOLLOWAY (South Africa): That only answers one
part of the question, Mr. Chairman, because it assumes there is
only one Member objecting, but there may be, among the seventeen,
four or five or six objecting. How many are empowered to throw
out those four or five or six? Can 51% throw out 49% or 67%
throw out 33%? E/PC/T/TAC/PV/8
You have got to make up your mind sooner or later about what
percentage establishes agreement if you have more than one
objecting party. You can have or objecting party, or two or
three, or four or five.
CHAIRMAN: I would like to ask the South African Delegate not
to press these matters of detail now. We are not discussing the
proposal in detail. We have just listened to a very interesting
statement by Mr. Brown, which he delivered with a view to clarifying
the issues which were before us yesterday, and all I did was to
invite comments on the proposal, which is simply set forth in
general principles, not in detail. We will be able to discuss the
details when we have a proposal before us in writing.
Dr. J.E. HOLLOWAY (South Africa): Mr. Chairman: I fail to
see how one can comment on a proposal when what may be described
as a detail which is an essential part of the working of the thing,
is not before you.
CHAIRMAN: There is no obligation on any Delegate to comment at
this stage. I simply invited comments in case any Delegate wished
to do so.
The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, first of
all I would like to thank the United States Delegate for the
interpretation which he has given of Article 1, and I hope that in
the record of this meeting, this interpretation will appear as
that given by the Committee and that it will appear as the
interpretation of Article 1 during the time of the provisional
application of that Article by the French Government.
V E/PC/T/TAC/PV/8
Now, on the suggestion made by Mr. Brown, I would like to
state that this is a very important suggestion, and I would like
also to Join in the thanks which have been given to Mr. Brown
for making it. I am certain that this suggestion will help
to Solve the many difficulties which have arisen here.
The French Delegation cannot pronounce itself yet on this
suggestion; but I would like to ask urgently that we could have a
text in writing as quickly as possible, so that we can send that
text in writing to our Government in Paris and have the views of
our Government on this proposal.
The French Delegation is not automatically in favour of the
automatic substitution of the provisions of the Agreement, but we
favour a system which will enable as many countries as possible
to join the Agreement. We have envisaged the possible
eventuality - I hope this case does not arise, but nevertheless
we have to bear it in mind - that there might arise differences
of substance between Part II of the Agreement and the provisions
of the Charter after the Havana Conference. It is possible that
after the Havana Conference there might be a situation entirely
different from the one which was envisaged at first in London.
If after the Havana Conference the provisions of the Charter
are different from the provisions adopted here, or if a more
serious situation were to arise -that is to say, if no Charter
were signed at Havana, then the approval of the Agreement would
have to be taken up on an entirely different basis.
I think. that we ought to start from scratch and consider the
approval of this Agreement in quite a different light, that is,
that the countries ought to be free to adhere to the Agreement, or
not, and consider the possibilities with an open mind in the face
of this new situation.
V
1 5 16
V E/PC/T/TAC/PV/8
What we want to avoid is that two groups of countries should
be formed -that is to say, that one group should be closely tied
by the provisions and obligations of the Charter, and another
group could withdraw from these obligations and form a sort of
restricted Club. We do not mind joining such a Club, and we are
ready to join such a Club if, of course, the rules of the Club are
rules of good manners and good conduct. What we do not want is
that in order to join such a Club we should have to prove that
we have blue blood.
If no Charter is signed, the guarantees which appear in the
Charter (I do not mean only the guarantees of the provisions of the
Charter which are taken up in Part II, but the guarantees of all
the provisions of the Charter) would go, and then all the
contracting parties would have to be able to consider and examine
this new situation with an open mind, in the light of new
developments. Therefore, as I have stated previously, we want
to study more closely the suggestion which has been made, and that
is why we have intervened.
CHAIRMAN: The Delegate of the Netherlands.
Dr. A.B. SPEEKENBRINK (Netherlands): Mr. Chairman, I would
like to say that I also think the American proposal, combined with
Dr. Coombs' earlier proposal, is a constructive one, and I look
forward to seeing it in writing.
CHAIRMAN: Are there any other comments?
Mr. R.J. SHACKLE (United Kingdom): I think I can say that
although, of course, we have not had an opportunity of considering
this matter very fully, this suggestion does appeal to us as the
most helpful for finding a way out of this situation fruitfully. V 17 E/PC /T/TAC/PV/8
It has, of course, only been sketched out very broadly so far,
but I have rather the feeling that there will be some merit in not
garnishing it with too much detail. It seems to me to be rather
the essence of the proposal that we shall deal with the situation
which arises when we know what it is and when we know all the
circumstances. The method to be followed by the parties when they
get together will have to be determined by the situation as they
then find it, and I cannot help feeling that it would be a mistake,
therefore, to try and write in detailed rules of the game at this
stage.
I would only like to add one other remark, and that is as
regards the suggestion that it will not be possible to start the
work of possible amendment of the General Agreement till the
Charter has actually been brought into force. I should have
thought that that need not necessarily follow. After all, as
soon as the Havana Conference is over we shall know what is in
the Charter. It will then become simply a question either of
that Charter or no Charter, and if the parties to the General
Agreement desire to introduce amendments as soon as the text of
the Charter is known, without waiting for its coming into force,
they can do so. Equally, of course, they might prefer to wait
until it had come into force, but there is no compulsion on them
to wait until it had come into force and they would consider the
situation freely and with open minds as it then presented itself.
It seems to me, therefore, that there will not necessarily
be embarrassment in the fact that one is required to make up one's
mind about the General Agreement by the middle of next year.
I should have thought that by that time countries would be able
to take a well-informed decision. 18
E/P~ ~ ~ ~~~~T '7C)/T/TALC/PV/8
CHAIR ",A re there any other comments?
The Delegate for New Zealand.
na . J.P.D. JOHNSEN (New Zealand): Mr. Chairman, in the light
of the comments of the Delegate of the United Kingdom, is it to be
understood that on the termination of the World Conference the
constitution of mart II of the Draft Charter would replace the
General Agreement unless one of the contracting parties raised an
objection, or would some time need to elapse?
By. R.J. SlL CKL (United Kingdom): Is that not a matter,
Mr. Chairsan, which could be left to the judgement of the parties
to the General Agreement? I should have thought that it would
be.
CHAIBU'N: Are there any other comments?
The Delegate of Australia.
DR. H.(. COOMBS (Austrgling: s was only voizi to Say,
Mr. Chairman, that I think the willingness of the United States
Delegate to accent this principle will certainly simplify the
problem in the case of the General Agreement, and I would be happy
to collaborate with him and work out a text on it.
CRAIR-RNK I think we can leave this question now. We will
come to it Again when we reach article XXVII, by which time no
doubt the Australian and the Uiited States Delegatlons will have
submitted their proposalwinl writing, and we vll have had ample time
to study it.
Do any other Members of the Committee wish to speak on the
Australian suggestion that Article I should be transferred to Part II? J. E/PC/T/TAC/PV/8
Do any Members of the Committee support the Australian proposal?
MR. A. FAIVOVICH (Chile) (Interpretation): Mr. Chairman, the
Chilean Delegation supports this proposal.
CHAIRMAN: The Delegate for Norway.
MR. J. MELANDER (Norway): Mr. Chairman, we fully appreciate
the logic in the Australian proposal, although this proposal does
not directly concern Norway. The general most-favoured-nation
treatment is part of our commercial policy and has been for many
years, but I quite see the point of those Delegations to whom this
clause would mean a fundamental change in their commercial policy.
I think it is logical to maintain that this principle is to
have or ought to have an equal standing with the principles laid
down in Part II of the Agreement. Consequently, the Norwegian
Delegation would have no objection to the transfer of Article I
from Part I to Part II.
CHAIRMAN: Are there any other comments?
The Delegate for Syria.
MR. H. JABBARA (Syria) (Interpretation): Mr. Chairman, the
Syrian Delegation, as it stated previously, seconds the Australian
suggestion to transfer Article I from Part I to Part II. We
second that proposal all the more willingly because Article I in
fact, refers to Article III, which appears, of course, in Part II.
It is stated in paragraph 1:- "with respect to all matters
referred to in paragraphs 1 and 2 of Article III". Therefore, I do
not see how these two Articles could not be of the same type. It
seems to me that Article I is of the same nature as Article III and 20 E/PC/T/TAC/PV/8
Article II, and therefore ought to appear in the same Part, that is
to say, Part II of the General Agreement.
CHAIRMAN: The Delegate of Canada.
MR. L. DOUILLARD (Canada): Mr. Chairman, the Canadian
Delegation could not accept the proposed transfer as suggested by
Dr. Coombs, namely that Article I should now be included in Part II.
We consider, indeed, the principle of the most-favoured-nation
treatment as the very basis of this entire multilateral agreement.
The principle of the most-favoured-nation treatment is the very
foundation of many existing bilateral agreements, and it was the
foundation of Canadian commercial policy. We would regard this
transfer as a step backwards, indeed as a retreat, from the
principle of the most-favoured-nation treatment. We agree with the
Delegate of the United States that to transfer this Article to
Part II would be wrong for those reasons.
We regard Article I as being given due importance in its present
place. We also regard its present place as important because it
would not make Article I subject to supersession as required under
Article XXVII.
I do not think that the point raised by the Delegate of Syria
is a serious one since paragraph 1 of Article I merely refers to
matters referred to in paragraphs 1 and 2 of Article III As I see
to
it, it is merely referred to/obviate the need for a lengthy listing
of these matters.
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, if I might
express a rather personal opinion on this question, I should say
that it would be a pity to transfer Article I to Part II. This is 21
J.E/PC/T/TAC/PV/8
an Article which is an essential part of its foundation and
structure, and we want it to be a firm foundation.
The divergencies of existing legislation of certain countries,
of Which we have been told here, all appear to be of quite a minor
character, and I should hope that we would be able to deal with
them as we have previously agreed to deal with the French Rule of.
Provenance, that is to say, by just recognising that they may need
some time to bring their legislation into line with this principle,
and leave it at that.
It does seem to me that the other grounds which have been
mentioned for transferring this Article to Part II are in quite a
different category, and I am not sure if they are relevant, that is
to say, the consideration that a big departure in commercial
policy is involved. Surely, that is an essential question which
every country will have to consider before it adheres to this
Agreement. If it feels, as no doubt in the vast majority of cases
countries will feel, that this is a matter of such importance that
it must get its parliaments approval, well, no doubt it will get
it, but it does seem to me that it is quite a different matter from
the need to make certain detailed adjustments to existing legislation.
I think it stands in an entirely different category, and I rather
doubt if, from the point of view of the possible transfer of to
Part II, it is really a relevant consideration.
CHAIRMAN: One hour ago I detected a spirit of conciliation
in listening to our deliberations. That spirit now seems to be
absent, because there is a very sharp division of opinion in the
Committee. 22
J. E/PC/T/TAC/PV/8
Certain Members are of the view that Article I should be
transferred to Part II; other Delegations have expressed themselves
equally firmly to the effect that they could not contemplate
Article I being transferred to Part II, because they consider that
in the present position it is an essential part of the Agreement
and that it relates to the granting of tariff concessions and
therefore should stand on its own feet.
I am wondering if we could not find some common ground on which
we could resolve this question so that we could move on and make
progress. I would remind Members of the Committee that we have
to finish this Agreement by the end of next week, and that therefore
we should not spend too much time on a point of this kind.
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, if I may
intervene here for a moment, why not base a solution of this
difficulty possibly rather on the lines that I suggested just now,
that is, that we should recognise and take note that there are
certain minor divergencies of legislation in certain countries from
the principle of this Article. We could agree, as in the case of
the French Rule of Provenence, to leave time for those governments
to amend their legislations. If we do that, can we not leave
Article I in Part I?
CHAIRMAN: The Delegate of the Netherlands.
DR. A.B. SPEEKENBRINK (Netherlands): Mr. Chairman, is it not
more a question of stress laid on certain Articles? As I understand
the situation, we have here in Part I certain Articles which we think
will stay in the General Agreement on Tariffs and Trade, and in 23
J. E/ PC/T/TAC/PV/8
Part II we have certain Articles which we visualise will be
replaced by Articles as they will be framed in Havana. However,
there is nothing which forbids this. Later on, when in Havana we
find a better clause for the most-favoured-nation treatment, even
if it get into the General Agreement on Tariffs and Trade, and
even if Part II follows the proposal just made by the American and
Australian Delegates, you will find yourself more or less in the
same position, because if a Member disagrees they would have
to take the consequences. 24
S E/PC/T/TAC/PV/8
Therefore I see it in such a way that there is always the
possibility of making a change in the General Agreement on
Tariffs and Trade. I, for myself, can see no objection at all
to keeping it in Part I of this Agreement.
CHAIRMAN: Mr. Shackle made a very useful suggestion and
I am wondering if the Committe would agree with leaving this
article in accordance with the suggestion of Mr. Shackle,
Dr. COOMBS (Australia): What was that?
CHAlRMAN: That Article I should remain in Part I so that
we should deal with those points on which countries find it
impossible to give provisional application without legislative
changes by recognizing that that situation exists and dealing
with it in some other way.
The Delegate of Czechoslovakia.
H.E. Mr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman,
I must apologise to Mr. Shackle, but I entirely agree with him
and I ould like to support his suggestion.
CHAIRMAN: Is that agreed?
Dr. COOMBS (Australia): I ould just like to make one
or two points clear on this, Mr. Chairman, before we pass on.
The suggestion which Mr. Shackle has made, which is, in
essence, I understand, the same as was made by the United
States Delegate, that their legislative problems should be
recognized by ignoring them, is perhaps a possible solution to
that particular difficulty. If, presumably, we can be content
that no one will question the fact that we have not introduced
any necessary legislation to give effect to the principles of
this Article, that difficulty is overcome. S 25 E/PC/T/TAC/PV/8
I would just like to make one point clear, as it may be
relevant to later discussion on the Article. We had two
reasons for suggesting the transfer of this Article into Part
II. One was the legislative difficulty and the other, as I
have said, is that this does represent a substantial change
in the commercial policy of my country and if it is in Part II
it is more provisional than if it is in Part I, and we get
that much longer to see the outcome of the whole set of
negotiations - tariff and Charter - to see whether the
Circumstances justify our making this change.
To make this point quite clear: it is true that Most-
Favoured-Nation clauses are a traditional part of tariff.
agreements, but they have not, without any reservation, always
been a part of all Treaties. In all the Treaties which have
been concluded between countries which are members of the
British Commonwealth and other countries, there has been a
clause which reads something to this effect: "Nothing in this
agreement shall entitle (such-and-such country) to claim the
benefit of any treatment, preference or privilege which may at
any time be in force exclusively between the territories under
the sovereignty of His Majest, the.King of Great Britain,
Ireland and the British Dominions beyond the Seas," etc., etc.,
"or under his Majesty's suzerainty, protection or mandate."
That is a clause from an agreement which has been concluded
between a member of the British Commonwealth in the past and other
countries and similar clauses existed in all the treaties concluded
between such countries and others, including, if I may say so, the
treaties concluded between the Dominion of Canada and other
countries. E/PC/T/TAC/PV/8
This is a departure for these countries and it is an
important one. I am not seeking at this stage to justify or to
excuse this policy. In many respects we have regarded it as an
emergency policy designed fundamentally to deal with a particular
type of situation and whether we can change it depends upon a
judgment as to whether the circumstances are going to be funda-
mentally different; whether we can judge that depends upon the
outcome of the whole set of these negotiations - Charter and
tariffs. Therefore, the second reason we have for wishing to
transfer this into Part II was that it would give us that much
longer to make the judgment as to whether the actions of other
people and the obligations they were prepared to accept were
sufficient evidence of a change which would warrant us
concluding that the circumstances which we believe made that
policy necessary no longer exist.
However, we are grateful for the suggestion which has been
made about our legislative problems and we do not want to continue
to be difficult over a question of this sort. To retain this
article in Part I will face us with a somewhat more difficult
problem than if it were in Part II, but the basic situation will
remain unchanged, that is, it will be necessary for my Government
to make a judgment as to whether the outcome of the Whole of
the negotiations - Charter and tariff - warrant them accepting
this. Since it is in Part I, they will have to make a signifi-
cant part of that judgment on a hypothetical basis, not later on,
when they know the content of the Charter, but between now and
Havana, when the content of the Charter will in part, be
speculative.
However, they will know the outcome of the tariff negotiations
and will be able, perhaps, by people's actions in that respect,
to judge whether acceptance of this principle is warranted.
S
26 27
Therefore, Mr. Chairman, in view of the fact that, despite support
from a number of countries, we are apparently in a minority on this
question, we will withdraw our opposition to the Article remaining
in Part I, but making it quite clear that this does present my
Government with a much more difficult problem than it would have
been faced with if the Article had been in Part II.
CHAIRMAN: I thank the Delegate of Australia for having
withdrawn his proposal. we can now pass on to the consideration
of Article I, paragraph by paragraph.
Are there any comments with regard to Paragraph 1?
(Agreed).
Paragraph 2: are there any comments?
The Delegte of Australia.
Dr. COOMBS (Australia): For reasons which I have explained,
until the position is clearer as to the outcome of the negotiations
in which we are engaged, we would wish this Article to be con-
fined to the preferences which are described and listed in the
Schedules and to such other Most-Favoured-Nation treatment in
respect of other duties but not other preferences.
We would suggest, therefore, that Paragraph 2 should be
amended to read as follows:"The provisions of Paragraph 1 of this
article shall not affect any preferences in respect of import
duties or charges not described in the Schedules to this Agre-
ment or which do not exceed the levels provided for in Paragraph
3 of this Article and which fall within the following descriptions:
And, as a consequential amendment, there would require to
be deleted from Paragraph 3 all words after "or if no
preferential rate is scheduled", in the middle of the paragraph.
I would like to put that amendment forward, since that
expresses the position which it appears to us it would be possible
for us to accept in reference to Most-Favoured-Nation treatment
in any circumstances, and whether we could withdraw that would be
something which we could only decide later.
Mr. R.J. SHACKLE (United Kingdom): I wonder if Dr. Coombs
would like to read his amendment more slowly, so that we could
all take it down.
E/PC/T/TAC/PV/8
S 28TAC/PV/8
Dr. COOMBS (Australia): "The provisions of paragraph 1 of
this Article shall not affect any preferences in respect of
import duties or charges not described in the schedules to
this Agreement, or which do not exceed the levels provided
for in paragraph 3 of this Article and which fall within the
following descriptions: ..... "
And the consequential amendment is on the next page, in
paragraph 3.
CHAIRMAN: The Delegate of Canada.
Mr. L.E. COUILLARD (Canada) Mr. Chairman, this is a rather
new departure and I am not sure that I followed the text as
proposed in all its implications. If I am correct, however,
without discussing the -sons which Dr. Coombs might have in mind
for making such a change. I fail to see the logic of it. To my
mind it would mean that margins of preferences could be widened
Now, as I say, I fail to see the logic of that, because our tariff
negotiations have been conducted on the basis of old Article 14,
new Article 16, as reproduced here. In addition to acting in
direct contravention of this laid-down and agreed principle, it
would probably mean that the tariff negotiations would have to be
reopened, because certain countries no doubt would wish to protect
themselves against possible increases in preferential margins by
inserting in the schedules all those items on which they would not
want to see an increase in preferential margins. My understanding
may be wrong, Mr. Chairman, If it is correct, however, then the
full strength of my remarks will stand.
CHAIRMAN: The Delegate of the United States.
AC/PV/8/ r' /M. -r/ P
a: 29
Mr. Winthrop BROWN (United States): Mr. Chairman, I regret
that we would not be able to accept the amendment suggested by the
Delegate from australia. As the Delegate from Canada has Pointed
out, the whole basis of our negotiations here has been that
preferential margins would not be widened. That was set forth in
Annexure 10 to the London Agreement. It is then contained in
Article 24 of the London Draft, that principle is also contained in
Article 24 of the New York Draft, and is now in the Article which
we have agreed upon here for recommending to the Havana Confference.
It is part of the General Most-Favoured-Nation Treatment for all
products, not only those scheduled but those not scheduled, with
the specific exceptions stated. I do not see how we can possibly
accept a change in that basis at this stage.
CHAIRMAN: Are there any other comments?
Dr. COOMBS (Australia): May I just make an explanation in
reply to the point raised by the Canadian Delegate, which seems to
imply some misunderstanding?
Are you quite clear that what we are suggesting is not an
amendment to the Charter? The original Article 14 of the Charter,
as far as we are concerned, stands, as,when the Charter is signed,
we will - we are prepared to - apply General Most-Favoured-Nation
Treatment generally, and that was the relevance of our original
agreement on that point in our discussions in London. The
negotiations here have been concerned with requests, and I believe
it was recognised in London that this did constitute a concession
which should be taken into account.
Now it has been pointed out that this may make it necessary
for countries to seek binding of specific items or possibly of all
items. I see no objection to such a procedure. It is clearly
E/PC/T/TAC/PV/8
P. 30 /PV/8
provided for in the basis on which we approached this question, and,
if such a request were received and a mutually advantegeous
arrangement could be concluded in respect of such bindings, then
clearly they would be listed in the schedule, either in aggregate,
or together, or as a series of items.
So I cannot see there is anything inconsistent in what we have
proposed here with what we have undertaken. Nor do I see anything
inconsistent with the general approach here. All that this
amendment does is to reserve the general position for decision
when the whole of the outcome of these negotiations is known.
CHAIRMAN: Are there any other comments?
The Delegate of Canada.
Mr. L.E. COUILLARD (Canada): Mr. Chairmen, I thank Dr.
Coombs for his explanation. I might have led him to believe that
my interpretation was wrong in the first place by referring to
Articles 14 and 16. I should have been more specific and referred
to the Annexure to Article 24 to which Mr. Brown referred. Dr.
Coombs' explanation only confirms the stand which we took a moment
ago on the question. It only confirms that stand.
CHAIRMAN: Are there any other comments?
Mr. J.P.D. JOHNSEN (New Zealand): Mr. Chairman, in the
light of my comments earlier in the discussion today to the effect
that, as far as we are concerned, we should require to see what
the results of our negotiations were, before we could come to a
decision as to whether we could sign an .Agreement containing a
provision of this nature, even though we did have no particular
objection to the General Most-Favoured-Nation Clause, we think that
the reasons put forward by the Delegate of Australia are valid and
for that reason we would support his amendment.
E/PC/T/TAC/PV/8-Di /RQ
p E/PC/T/TAC/PV/8
CHAIRMAN: I take it from the remarks of the New Zealand
Delegate and also from what Dr. Coombs has said that the reason for
this proposal has some bearing on the tariff negotiations which are
now being conducted. Perhaps it would be satisfactory to the
Australian and New Zealand Delegations if we left this proposal
for the moment, on the reservations by the Australian and New
Zealand Delegations, and return to it at a later stage when the
tariff negotiations have proceeded some step further.
The Delegate of Cuba.
Mr. H. DORN (Cuba): I would ask you, Mr. Chairman, to add
Cuba to those delegations which will have to consider this proposal
once more.
CHAIRMAN: Are the Delegates of Australia and New Zealand
satisfied with that proposal?
Dr. COOMBS (Australia) : Yes, Mr. Chairman.
Dr. A.B. SPEEKENBRINK (Netherlands): I would ask a question:
when we at this moment negotiate preferences we do that keeping in
mind the stipulations of this Article regarding preferences as it
stands now, and I think we have taken the same attitude in
connection with preferences scheduled in regard to the Netherlands-
Belgium-Luxembourg Customs Union, and I do not think that for the
time being we can change that point of view, even if we wait for
the result of the tariff negotiations before we take a decision
with regard to this point.
Dr. COOMBS (Australia): Just before we leave the point, Mr.
Chairman, I would like to quote from the London Report in which it
says as follows:
P. P.
"It was agreed that since preference-free treatment and
quantitative restrictions were to be dealt with under general
rules incorporated respectively in Article 14 (Most-Favoured-
Nation Treatment) and Articles 25-28 (Quantitative Restrictions)
of the revised text, they could not properly be included in
the rules governing selective tariff negotiations. At the
same time it was recognised that, in accordance with the plan
for conducting tariff negotiations among the members of the
Preparatory Committee, those countries would not be called
upon to subscribe to the most-favoured-nations and quantitative
restrictions provisions until selective tariff negotiations
had been completed and vice-versa. It was believed that
this circumstance would assure that due weight will be given
in the tariff negotiations to the benefits to be derived from
the elimination of quantitative restrictions and the general
grant of most-favoured-nation treatment".
E/PC/T/TAC/PV/8 V
CHAIRMAN: The Delegate of the United States.
Mr. Winthrop BROWN (United States): Mr. Chairman, having
recovered my copy of the London Report from Dr. Coombs, I would
like to call attention to the document entitled Procedures for
Giving Effect to Certain Provisions of the Charter of the
International Trade Organization by Means of a General Agreement
on Tariffs and Trade Among the Members of the preparatory Committee",
namely, Annexure 10.
On page 49 of the Report, we see that the Rules provide for
the base date for negotiations, and it is stated that Article 14
"would except from the Most-Favoured-Nation provisions preferences
'which do not exceed the preferences remaining after ... negotiations'.
This means that all margins of preference remaining after
negotiations would be bound against increase." Then it goes on
to establish an elaborate procedure whereby you can find out the
date and the nature of those margins so that they can be bound.
I submit that the careful thought and action of the Committee in
London has some meaning.
CHAIRMAN: The Delegate of Australia.
Dr. H. C. COOMBS (Australia): I am not sure whether we should
continue this text-quoting; but I should like to remind the
United States Delegate that the Australian Government once
specifically informed the Secretariat of the United Nations that
they accepted the procedural memorandum solely as a provisional
basis for action, and not in any sense as a commitment; and in
relation to the base date, in particular, we agreed to nominate a
base date for facilitating negotiations and specifically drew
attention to the fact that the naming of such date did not imply
an acceptance or commitment to which Mr. Brown has referred.
E/PC/T/TAC/PV/8 VE/PC/T/TAC/PV/8
Dr. J.E. HOLLOWAY (South Africa): We reserved our position
in the same way, but I do not want that to be interpreted as
support for Dr. Coombs' proposal.
CHAIRMAN: The Delegate of India.
Mr. B.N. ADAKAR (India): Mr. Chairman , I think it is our
duty to state what the position of India is in regard to this new
suggestion of Dr. Coombs. I should say straight away that,
according to our understanding of the explanations we have heard
of the implications of this reservation, it does not accord with
the spirit in which countries have embarked on tariff negotiations
here, as the countries negotiating, for tariff reductions have
started on the basis of Article 14 and Article 24. Article 24
definitely states the object to be reduction of tariffs and
elimination of preferences, and therefore all countries negotiating
have, I believe, started on the assumption that they need not ask
for binding of existing preferential margins, but only for their
reduction and all preferential margins not covered by negotiations
are supposed to be automatically bound.
If this matter is to be left over until we know how far
tariff negotiations have progressed, then I am afraid it will
create a misunderstanding in the minds of many people here, and
it might perhaps make people present fresh requests for binding
of preferential margins which were considered unnecessary.
Apart from that, I venture to submit that the suggestion
is not solely connected with the question of tariff negotiations.
If the effect of this amendment is to permit countries having
existing preferential agreements to widen margins of preference
if they are not covered by negotiations, then surely it conflicts
with the basic principle of non-discrimination, and apart from
V tariff negotiations it has a vital bearing on the issue of new
preferences.
This Article and other Articles included in this General
Agreement prohibits the creation of new preferences, because new
preferences would conflict with the idea of non-discrimination, and
because countries having existing preferential arrangements
have undertaken to eliminate those arrangements by steps. But if
countries which have preferential arrangements are to be allowed,
merely because they have these arrangements, to widen preferential
margins if they are not covered by negotiations , then I think all
the objections which have been raised to the demand for the creation
of new preference will fall to the ground.
Therefore, this ammendment is connected not merely with tariff
negotiations but also with the issue which is raised in the same
connection. I suggest, therefore , that it should not be implied
that amendments suggested by the Austalian Delegation make any
change whatever in the assumptions upon which the Delegations have
been conducting the tariff negotiations, and, at any rate, the
opposition of the Indian Delelga.ion to the spirit of this
amendment should be recorded.
CHAIRMAN: I wish to thank the Delegate of India for his very
Iucid and complete statement on his understanding of the position
under which tariff negotiations have been conducted. Are there
any other comments in regard to this question?
Mr. J.P.D. JOHNSEN (New Zealand): Mr. Chairman, as far as
New Zealand is concerned, there is no doubt as to the spirit in
which we conducted negotiations. The only point at issue is how
far commitments are to be entered into before we know just what
the result of the negotiations will be.
E/PC/T/TAC/PV/8
V E/PC/T/TAC/PV/8
CHAIRMAN: Are there any other comments?
M. Hassan JABBARA (Syria) (Interpretation): Mr. Chairman,
as representative of the Syrian Delegation, I would like to state
that we have not conducted our negotiations in the spirit which
was pointed out by the previous Delegates. We have taken into
account the principle of the Most-Favoured-Nation clause, and
we have made observations and comments on our own situation,
and we made certain reservations which nevertheless did not
prevent us from proceeding as if these reservations did not exist.
Now, Mr. Chairman, on this Article I asked for the floor
just now; but I am sorry that I was not able to catch your eye,
and I would like to ask for a definition regarding this Article.
Does this Article refer also to nations which are not key nations,
and will this Article come into force for such nations during
the time of the provisional application and before the final
ratification of the Agreement? The second question is whether a
revision of this Article will be possible after final approval
of the Charter. Our final attitude regarding this problem will
depend on the answers we receive to these two questions.
CHAIRMAN: I will do my best to answer the Delegate of Syria.
This Airticle will have effect when any country gives provisional
application to the Agreement, as from the date on which their
provisional application becomes effective - just the same as any
other Article in the Agreement. AIso, if a country does not
give provisional application to this Agreement, it will then have
effect when the Agreement comes into effect for that country.
As this Article is included in Part I of the Agreement, it will not
be subject to change on the coming into force of the Charter
unless the parties use the amendment procedure under the provisions
for amendment of the Agreement.
V V E/PC/T/TAC/PV/8
CHAIRMAN: The Delegate of the Lebanon.
M. Moussa MOBARAK (Lebanon)(Interpretation): Mr. Chairman,
if I understood correctly the explanation which you have just
given, this discussion can only interest the key nations or those
nations which can apply provisionally the Agreement without
having to submit it to their Parliaments, but it does not concern
those nations whose constitution prevents them from applying this
Agreement without submitting it to their Parliaments - nations
who
like Syria and the Lebanon - and/therefore cannot apply it before
next June. 38
CHAIRMAN: Are there any other comments on Paragraph 29
We shall now pass to paragraph 3.
In document E/PC/T/W/317 the French and Czechoslovak Delegations
have submitted an amendment to paragraph 3, which takes the place
of the proposals which they circulated on September 1st, I
therefore suggest that we first of all take up the proposals of the
French and Czechoslovak Delegations. Would either of these two
Delegations be in a position to explain the proposal?
(Interpretation)
MR. A. FAIVOVICH (Chile)/ If no French text has been
circulated up to date, I request for an adjournment of the discussion
until the French text is circulated.
MR. M. MOBARAK (Lebanon) (Interpretation): I share the point
of view of the Chilean Delegate.
M. ROUX(France): (interpretation): Mr. Chairman, I would
like to point out that the original draft was submitted by our
Delegation to the Secretariat in French.
CHAIRMAN: I am sorry, I did not know that the French text
had not been distributed. The Secretariat tells me that the French
text will be here shortly In the meantime, we might pass on to
Article II.
The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, before we
pass to Article II, I would like to draw attention to a Note which
was to be added to Article 16, which is the corresponding Article in
the Charter itself.
E/PC/T/TAC/PV/8
J. J.
39
This Note is contained in document E/PC/T/180 Corr.8, and it
reads like, this "In the footnotes immediately below the heading
'Article 16' insert the following paragraphs:
'The following kinds of customs action, taken in accordance with
established uniform procedures, would not be contrary to a general
binding of margins of preference.
(i) the re-application to an imported product of a tariff
classification or rate of duty, properly applicable to such product,
in cases in which the application of such classification or rate to
such product was temporarily suspended or inoperative on
10 April 1947; and
(ii) the application to a particular commodity of a tariff
item other than that which was actually applied to importations on
that commodity on 10 April 1947, in cases in which the tariff law
clearly contemplates that such commodity may be classified under
more than one tariff item."
I think this is a case in which the question of Notes comes up.
It does seem to me that this is a case where a Note should be
picked up, whatever procedure we decide to adopt for linking
officially interpretative Notes to the text of our General Agreement,
I would like to suggest that that Note be picked up there.
CHAIRMAN: The Delegate of the United Kingdom has raised the
question of the interpretative Notes which have been attached to
the various Articles which are common to the Charter and to the
General Agreement, Have any Members of the Committee any views as
to how these Notes should be dealt with?
The Delegate of Norway.
E/PC/T/TAC/PV/8 40
Mr. J. MELANDER (Norway): Mr. Chairman, I take it for granted
that the Explanatory Notes to Articles of the Charter would also
apply to the Articles of the General Agreement. If that is the
case, I do not think it would be necessary to have them attached
specially to the General Agreement.
CHAIRMAN: The Delegate of Chile.
MR. A. FAIVOVICH (Chile) (Interpretation): Mr. Chairman,
in spite of the comment which has just been made by the Norwegian
Delegate, I have some doubts, because if this Article here is not
to be provisional and, on the other hand, the Charter is to be
revised, I do not see how,it bering possible for this Note to
disappear from the final text of the Charter, we could consult
such a Note.
CHAIRMAN: The Delegate of South Africa.
DR.. J.E. HOLLOWAY (South Africa): Mr. Chairman, these Notes
were put in at various stages as a condition of certain Articles
being accepted and this is one of them. If it is not put into the
General Agreement, that will open the whole subject of the wording
of those Articles again. It is an intimate part of the Article.
CHAIRMAN: The Delegate of Cuba.
MR. H. DORN (Cuba): Mr. Chairman, I agree with the explanation
just given by the Delegate of South Africa, and I think that even if
the Notes were accepted without any change in the Charter, legally
it would not mean anything at all if they were not included in the
Agreement.
R.
E/PC/T/TAC/PV/8 J. E/PC/T/TAC/PV/8
41
Therefore, I think we will have to decide whether a Note has
an explanatory character and binding interpretive force - in that
case it should be included in the Agreement in order to make sure
that it applies to the Agreement, without taking into account what
will be its fate in the Charter.
CHAIRMAN: The Delegate for Czechoslovakia.
Mr.E.Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
think that we should keep the Footnotes, because I think that they
are essential to the meaning of the different Articles. I suggest
that we put them, as is usual in all treaties or international
conventions, in a Protocol - a final Protocol or Protocol of
signature.
CHAIRMAN: The Delegate of the United States.
MR. W. BROWN (United States): Mr. Chairman, I would agree
with the suggestion of the Delegate for Czechoslovakia. It seems
to us that the Notes should all be collected together in an Annex or
Protocol with reference to the Articles to which they apply, so that
they are part of the Agreement and all linked together in one place.
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, I do not
want to waste time on a question which is mainly one of mechanics,
but it does seem to me that there are two points, and the first is
the sort of formula with which you attach these Notes. I presume
the sense would be that these are to be regarded as official
interpretations of the text of the Articles. Then there is the
question of place - either these Notes can be printed at the foot
of the Artiolesor, as in some pre-war conventions, in a Protocol. J.
42 E/PC/T/TAC/PV/8
Having the Notes sandwished between the Articles certainly makes for
greater facility in reading, but on the other hand they might all
be grouped together in one Protocol at the end . In that case, I
imagine you will inform the person that he can look at the end if
he wants to find an explanation.
I think it is a question of taste rather than anything else, but
I am of the impression that it will be better to have the explanation
with the Article.
CHAIRMAN: Dr. Augenthaler has proposed that these Explanatory
interpretative Notes be collect d together into a Protocol which
will accompany the Agreement, and Mr. Winthrop Brown has seconded
that proposal; Mr. Shackle has expressed a preferece for the
Notes to appear at the bottom of each Article to which they relate,
but not a very strong preference. I wonder if we could obtain the
sense of the Committee as to which of these procedures meets with the
general wish.
MR. J.P.D. JOHNSEN (New Zealand): Mr. Chairman, I am inclined
to feel the same way as Mr. Shackle, that is, that it would be more
convenient and easier for reference if the Note were put at the
foot of the Article.
CHAIRMAN: The Delegate for Cuba.
MR. H. DORN (Cuba): May I support Dr. Augenthaler's and
Mr. Brown's proposal, because I think that this form of Protocol has
mostly been used in international treaties. It has one great
advantage in that it makes quite clear the interpretative character
of these Notes. The Footnote, as such, does not make the character
so clear. Therefore, I want to agree with the two Delegates whom
I mentioned before.
E/PC/T/TAC/PV/8 43
CHAIRMAN: Any there any other comments?
The Delegate of France.
M. ROYER (France) (Interpretation): M . Chairman, I think
that from a legal point of view the suggestion made by the
Czechoslovak Delegate, supported by the Cuban Delegate, is quite
a reasonable one and I hope that the preference which was
mentioned by Mr. Shackle can be eliminated under the terms of
Article I of the Draft Agreement.
Mr. R.J.SHACKLE (United Kingdom): Mr. Chairman, I do not
want to press my point very hard. I think that so far as the
question of the legal effect is concerned it could be covered
by a reference somewhere in the Agreement. If the general
preference of the Committee is, as it seem. to be, in favour of
assembling all these Notes in a Protocol, I will not press my
point.
CHAIRMAN: I want to thank Mr. Shackle for his accommodating
spirit. I think we can leave this question as more or less
settled. I will ask the Secretariat to prepare a draft Protocol
giving the interpretative Notes; we can discuss the form when we
have that draft.
Can we now take up Article II?
Mr. H. DORN (Cuba): I have only one question if you will
allow me, Mr. Chairman, There is the question of how to deal
with reservations. If I understood it rightly, it is not
necessary to mention this question for each Article, because
you want to deal with all reservations together under Article
XXVII, but I am not quite clear as to whether it is necessary
to mention for each Article the existence of a reservation.
S
E/PC/T/TAC/PV/8 S 44 E/PC/T/TAC/PV/8
CHAIRMAN: I had hoped, after the statement which Mr.
Brown made earlier in this meeting, that the question of
reservations would no longer arise, but if there are to be any
reservations I think they can best be dealt with when we have
finally considered the whole text of the Articles; then we can
see if there are any reservations which might have unanimous
support or not.
Mr. H. DORN (Cuba): Mr. Chairman, if you will allow me,
I understood that we would have to discuss this question of
reservations, because it has a long legal history; it is not
something new. I do not want to discuss it at this moment, but
at all events I think the question of at what time the reservation
has been made and maintained must be discussed before we can
decide whether we have to insert it at the moment of signature.
Therefore I think we can discuss it later and reserve our right
to make reservations which will be maintained indefinitely.
CHAIRMAN: That will be more satisfactory. We will make
better progress if Delegations do not mention, in the case of
each Article, what reservations they have in mind. We will leave
the whole question over until we have dealt with all the Articles
of the Agreement.
Mr. DORN (Cuba): Thank you. It is not necessary to
mention them?
CHAIRMAN: No, it is not necessary.
Can we now deal with Article II?
Are there any comments on Paragraph 1?
(Agreed) 45
Paragraph 2: in Document W/312 we have a proposal by the
French Delegation for a new wording of Paragraph 2. Will the
French Delegation explain the purpose of this proposal.
M. ROUX (France) (Interpretation): Mr. Chairman, the
reasons why we have submitted this amendment are pointed out
in Document W/287. The question was raised before the Working
Party and relates to certain taxes which are neither customs
duties covered in Article 1 nor internal taxes, this case being
covered also in Article III. In the Tariff Schedules the
freezing of customs duty has been envisaged and for other taxes
on imports or exports it is not customary to freeze those
taxes.
It does not mean, of course, that those taxes or charges
should not be mentioned, because the increasing of such taxes
or charges could compromise the concessions which are granted
under the tariff negotiations and in the Tariff Agreement.
In Paragraph 2 of Article 89 the principle underlying
Paragraph 2 is that "no contracting party shall alter its
method of determining dutiable value or of converting
currencies so as to impair the value of any of the concessions
provided for", and we propose here to add that the contracting
party should not render illusory in a certain way the
advantages which it has granted to another party by certain.
taxes or charges.
Here we have a precedent, that of the Trade Treaty
between the United States and France signed in 1936,
where a similar provision occurs. This similar provision
applied to certain fiscal taxes and certain charges of a
E/PC/T/TAC/PV/8
S 46
special nature for services rendered, for example. It is
possible to maintain these taxes at their present rate, but
it would not be right or proper to have these charges increased
so as to hinder in any way or impair the application of the
agreement. In fact, if one could look at the taxation
legislation or administrative policy of many countries, one
could find a certain number of such taxes or charges which are
assessed for services rendered on goods, for instance, and
which are not internal taxes and for fiscal reasons it could
not be possible now to suppress such taxes.
As I say, we have a precedent here in the 1936 Trade
Treaty between France and the United States, and that is the
reason why we have proposed the amendment to Paragraph 2.
CHAIRMAN: The Delegate of the United States.
Mr. Winthrop G. BROWN (United States): Mr. Chairman, we
have no disagreement whatever with the objective of the
French amendment. It seems to us, however, that the point
is already covered, practically in the same language, in the
suggested Schedule, which was circulated as Document T/153 for
the consideration of the Committee. It seems to us that Para-
graph 1, plus Paragraph 2 of Article II as they now stand,
plus the Schedule as suggested in Document T/153, completely
meets the point made by the French Delegation, without the
necessity for further changes in Article II, because the
Schedule actually uses practically the same language as the
French amendment.
CHAIRMAN: The Delegate of France,
E/PC/T/TAC/PV/8
S E/PC/T/TAC/PV/8
M. ROUX (France) (Interpretation) Mr. Chairman, the question
is precisely to know whether before the Schedules one has to put a
certain number of comments to explain what the schedules are about,
and this would mean overlapping, I think. I think that we ought
to have a General Agreement which could stand on its own feet and
only refer to the Schedules and to the Annexures without adding any
comments.
The question is, as I have stated, therefore, to know whether
before the Schedules one should put such comments and provisions,
such as provisions relating, for example to anti-dumping duties,
etc. This was the main purpose of the amendment which we submitted
in document W/287 and therefore we think that the provisions
ought to be contained in the Agreement itself and not in comments
on the Tariff Schedules.
There ought to be an Agreement and then Tariff Schedules only
but without comments, I think that the main reason for that is a
question of clarification but nevertheless this is a matter of a
general nature which we should have to take up and discuss maybe
at a later stage.
Nevertheless I would like to thank the United States Delegate
for stating that he agreed with the spirit of our amendment. To
sum up what I have said, the question is only to know whether these
provisions ought to be included in the Article or whether they
should be included in comments before the Tariff Schedules, and
explain those schedules and be a sort of heading to the Tariff
Schedules.
Mr.H. DORN (Cuba): Mr. Chairman, I would be thankful to
have some explanations about the content. Up till now I had the
impression that the covering statement, the Tariff Statement, had
- 47 - -48 -
P. E/PC /T/TAC/PV/8
only an explanatory character, that means, it makes it clear what
the result of the Agreement would be as for the accepted Schedules;
and I thought that the main points covered by the new French
amendment would be covered already by the Articles of the Agreement.
I would be glad to know if this interpretation of the covering
statement was a correct one.
And secondly I would be grateful to know if the last part of
the French amendment is a limitation of the paragraph 2 as it
stands now in Article II, because in Article II, as it stands up to
now, it says, speaking about converting currencies: "... so as to
impair the value of any of the concessions provided for in the
appropriate Schedule annexed to this Agreement", and in the new
wording it says: "by altering its method of determining dutiable
value or of converting currencies for calculating this value".
That means limiting the wording. I am not quite sure if it limits
also the sense, the meaning, but the wording at least would be
limited.
I would be thankful to have some explanations about the two
points mentioned.
CHAIRMAN: The. Delegate of France.
M. ROUX (France) (Interpretation): Mr. Chairman, with your
permission I would like to answer first the second question. It
was not at all our intention to modify the meaning of this paragraph
by adding the words "for calculating this value" to the words "of
converting currencies". In fact the duties which are to be
evaluated cannot be modified and we do not want to see the Customs
Authorities changing at their will the tariff valuation.
As to the first point, I asked myself if this question of
taxes was not covered already by the Agreement, but, as I have
stated previously, some taxes are not customs duties, and they 49 E/PC/T/TAC/PV/8
cannot be considered either as internal taxes, because they have
no equivalent in the internal fiscal system. For instance, we
have the example of the sanitation tax, which is usually to reward
the services of the sanitation inspector who inspects the cattle,
for instance, or of a veterinary, or of a customs inspector: or
we can have the case of fees which are to be assessed for overtime.
These taxes of course cannot be considered as internal taxes. They
are only minor taxes; nevertheless they could in some way hinder
international trade.
Mr. Winthrop BROWN (United States): May I point.out that
the two points last raised by the Delegate of France are already
covered in the Schedule, paragraph 3(c):
"Nothing in this Schedule shall prevent the Government of
............ from imposing at any time on the importation of
any product:
(c) fees or other charges commensurate with the cost of
services rendered."
Therefore, the sanitary inspectors can be properly compensated
for their efforts and all those who work overtime can receive their
due and proper compensation.
As for the basic question raised by the Delegate of France it
would of course be possible to take care of provisions which so
often appear in the Schedule by putting them all in Article II but
it would require some very careful drafting to do so. It is a
decision we have to take but I suggest it is a decision we had
better take later, when we have had a look at the Schedules and
decided the precise form. Everything which is in the French draft
which appears in document E/PC/T/W/312 is, I submit, already taken
care of in the draft Schedule recommended in document E/PC/T/153,
especially taken in connection with paragraphs 1 and 2 of Article
II as they now stand. - 50 -
CHAIRMAN: Would the French Delegation be agreeable to
leaving this question over until we have examined the Schedule?
Then if they find it is not covered by what is in the heading to
the Schedule they would have the right to refer again to this
amendment.
M. ROUX (France) (Interpretation): Mr. Chairman, I agree to
examine this question at a later stage, but I think that this
question will raise other problems. We ought to try to gather in
Article II various provisions which appear in various places of
the Schedule; nevertheless our proposed amendment here is not
quite the same as the provisions which appear in the headings of
the Schedule.
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman, I think
that there may be some difficulty in transferring at any rate some
of the headings of the Schedules to Article II. For instance, I
see paragraph 2 on page 5 of document T/153 which relates to
preferential rates of duty in favour of products of the territories
of contracting parties entitled to receive preferential treatment.
It seems to me that to transfer that to Article II involves
considerable complication.
Another difficulty I notice is that the suggested heading to
the Schedule contains as 3(b) a provision for anti-dumping or
countervailing duty. If I read the French amendment rightly, the
use of anti-dumping or countervailing duties would be limited to
where the use of such measures is prescribed by legislation already
in force, and therefore any new anti-dumping or countervailing
duties would be prohibited. That is something we have to look at
rather carefully if the French amendment is accepted. I mention
that as a point which requires consideration when we come to the
Schedules. - 51 -
E/PC/T/TAC/PV/8
CHAIRMAN: The Delegate of France,
M. ROUX (France) (Interpretation): Mr. Chairman, I think
there is a misunderstanding. The question of internal taxes is
covered and settled by the Article which refers to internal taxes,
and the question of anti-dumping duties is settled by the Article
which deal with anti-dumping duties and not by the headings of
here
the Schedules and it seems to me that/there is a certain amount of
overlapping.
Mr. R. J. SHACKLE (Un i ted Kingdom): Mr. Chairman, I am sorry
to intervene again, but I cannot help feeling that Article V,
Anti-dumping and Countervailing Duties, would not by itself prevail
over a provision which said that charges on importation were bound.
I see nothing in Article V which would have that overriding effect.
CHAIRMAN: It is clear that we cannot make headway on this
complicated question until we have considered the heading to the
Schedule, and therefore I propose that we leave it over until we
come to the Schedule, as the French Delegation have agreed.
Are there any other comments on paragraph 2?
The Delegate of Syria. V - 52 - E/PC/T/TAC/PV/8
M. Hassan JABBARA (Syria) (Interpretation): Mr.Chairman,
I would like to have an explanation concerning two points of
the French amendment. We read in the French amendment that
"No Contracting Party shall adopt measures likely to impair .....
unless such measures are prescribed by legislation currently in
force".
It seems to us, therefore, that the Government would be able
to fix the amount of the tax even after the customs duties had
been frozen or reduced following the tariff negotiations. Now,
will the Government be in a position to increase the margin
existing on such taxes, and can they do that if the internal
legislation permits them to do so?
The second question I would like to ask relates to the
words "imposed on, or in connection with importation". It seems
to me that there is a certain confusion, because certain internal
taxes are imposed on goods at the time of the importation, and,
nevertheless, the fact that these taxes are received at the time
of the importation does not change their character of being
internal taxes. Therefore, I would like to have some
explanation on these two points.
CHAIRMAN: The Delegate of France.
M. ROUX (France) (Interpretation): Mr. Chairman, the
comments made by the Syrian Delegate proves to me with what
care he has studied our amendment. He was able to discover
new aspects of our amendment which had escaped the French
Delegation!
The inclusion of the words ."unless such measures are V E/PC/T/TAC/PV/8
prescribed by legislation currently in force" was referred to.
We do not intend to open the way to misuse of this provision;
but it was only included in order to avoid unpleasant surprises
to the Contracting Parties, and that taxes which did not exist
could be imposed on importations.
We do not want to cover abuses here, but we just want to
take into consideration the situation which prevails at the time
of the signing of the Agreement.
As to the second point referred to by the Syrian Delegate,
that is, the expression "on or in connection with importation",
this appears in many places in the Charter, and is one we have
acquired from other Articles of the Charter. The French
Delegation did not invent this expression, and although it may
seem somewhat redundant, it might be a sort of precaution against
cases where the taxes are not imposed at the exact time of the
importation, but may be at a somewhat later stage -nevertheless,
in connection with the importation. Of course, the internal
taxes here are completely left aside, because, as I stated
previously, the case of internal taxation is scheduled in a
special Article on internal taxes, just as the case of anti-
dumping duties is scheduled in a special Article. What we wanted
to do through our amendment was to solve a certain number of
cases of taxes which cannot be put into the general framework of
normal taxes.
CHAIRMAN: As I mentioned before, we will be dealing again
with these complicated questions when we come to deal with the
heading of the Schedule. It is now time we adjourned. Tomorrow
I propose we take up paragraph 3 of Article 1. The French and
Czechoslovakian Delegations' proposals have now been circulated,
and we will begin tomorrow at 2.30 p.m. with the French and
Czechoslovak proposals. The Meeting is adjourned.
(The Meeting rose at 6.20 p.m.)
- 53 - |
GATT Library | mt149ct7592 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Eleventh Meeting of Commission A held on Wednesday, 11 June 1947 at 2.30 p.m. in the Palais Des Nations, Geneva | United Nations Economic and Social Council, June 11, 1947 | United Nations. Economic and Social Council | 11/06/1947 | official documents | E/PC/T/A/PV/11 and E/PC/T/A/PV.8-11 | https://exhibits.stanford.edu/gatt/catalog/mt149ct7592 | mt149ct7592_90240090.xml | GATT_155 | 12,821 | 77,971 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/1l
11 June 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
* ELEVENTH MEETING OF COMMISSION A
HELD ON WEDNESDAY, 11 JUNE 1947 at 2.30 P.M. IN THE
PALAIS DES NATIONS, GENEVA
Mr. MAX SUETENS
(Chairman)
(Belgium)
Delegates wishing to make co rrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247).
* For record of Tenth Meeting see Summary Record E/PC/T/A/SR/10.
NATIONS UNIES E/PC/T/A/PV/11
CHAIRMAN: The meeting is called to order.
(Interpretation)
Gentlemen, we have today to examine and discuse Articles
34, 35, 36 and 38 of the draft Charter. I suppose you have all
taken into consideration the annotated Agenda prepared by the
Secretariat for these Articles (W/175 dated 6th June). We shall
start with article 34.
I want to remind you that We are going to follow the procedure
which we have always followed, that is, to restrict our discussion
in this Commission to questions of substance, and let the
sub-Committee which we will appoint, if we do not continue the
mandate of the Committee working on Articles 14, 15 and 2<,
discuss questions of drafting.
As far as Article 34 is concerned, we are confronted with
an amendment to Paragraph 1, proposed by Belgium and Luxembourg.
I think this is an amendment of substance, and I therefore invite
M. Forthomme to develop his argument.
V
-2 - 3 - E/PC/T/A/PV/11
M. PIERRE FORTHOMME (Belgium) (Interpretation): Gentlemen,
the Belgian and Luxembourg delegations believe that paragraph 1 of
Article 34 provides for an excetion for an escape clause of a very
general character, and that therefore we must be very careful not to
limit the case too strictly in which these paragraphs could be
applied. If we admit as a principle, and that is already an
important privilege, that a country can revoke some concessions on
tariffs which it has conceded, in order to protect its own producers,
it would be going a little bit too far to extend the possibility of
such an action to the territories which enjoy a preferential
treatment as far as this nation is concerned. It has been admitted
generally that such an action should be taken at the request of such
a country which enjoys such Dreferences, and if we are not very
careful what that paragraph entails we will, to a great extent,
augment the difficulties of those who have to protect their own
production if they have to discuss not only wits one country but with
the territories which are related to that country by preferential
arrangements. Therefore, the Belgian delegation proposes to delete
this Paragraph to make equal as far as Possible the means of
defence of all the parties engaged in such negotiations.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I am afraid
that the suggestion which is made by the Belgian delegation would
definitely not be acceptable to us. It seems to us that this is a
question of equity and that the equity springs from the nature of
the original bargain which we have in contemplation, and which is
the reduction of tariffs on the ore hand against the reduction,
possibly elimination, of preferences on the other.. It seems to us
which
that if countries/contemplate such reduction in their tariffs are
free to withdraw reductions they have made in certain cases by this - 4 - E/PC/T/A/PV/11
Article, it is equitable and right that the corresponding freedom
should be allowed in cases where preferencess have been reduced or
abolished. There has already been a great deal of criticism at
home about the wide scope of this escape clause and we feel that,
if there was not to be a balance under I.t as between the concessions
on tariffs and concessions on preferences, it would become
unacceptable to public opinion in the United Kingdom. It goes
without saying that, If it should become necessary - s we hope it
will not - to evoke this clause in relation to reference, it must
in our view be evoked for the benefit of those parties who have
suffered from the reuction or abolition of reference and at their
request. 7'e have put down an amendment who follows later, which
is designed to make that point clear that action must be taken at
the request of the carty which suffers through the abolition or
reduction of preferences. As T have said, this is a matter on
which we have definite views, and I chink we shall have to insist
really on the retention of the text.
Dr. H.C. COOMBS (Australia): Mr. Chairmar, the delegate for
Belgium based his objections to the application of this escape
clause to industries adversely affected by a reduction or elimination
of preference, on the principle that h s delegation believes that it
is desirable to equalise the means of defence between the different
parties to the agreement. We believe that this is a very sound
principle, provided that the means of defence are adapted to the
situation against which they are intended to de-end the parties .
Speaking for Australia, 1 would just like to say that the possibility
of industries dependent upon prmf2-eerences being adversea cIffected aye.
modification ot those preferenceis, s ata lest as great as the
possibility of Industries in other countries being adversely affected
by a modification in tariff protection. S
We have some industries in Australia of a primary
producing character which have substantially grown to their
present scale during; the period of operation of the preferences.
It is exceedingly difficult to forecast what the position of
those industries will be if the preferences are modified.
I suggest that it is precisely to deal with that type of
situation - where countries are invited to accept an undertaking
the precise Implications of which it is impossible to see in
advance - that this escape clause was provided. It was
provided originally for modifications of the tariff. We
suggest that precisely the same justification exists for
industries at present dependent upon preferences.
Since we cannot forcast precisely, it means that
inevitably, in accepting a modification of those preferences,
we are taking a risk which involves the livelihood of many
individual producers, for many of whom; it will be impossible
to find alternative forms of production. Consequently this
clause does appear to us to be fundamental to enable us to
ensure that serious and widespread social hardship is not
imposed upon some of those producers.
We do not cc not anticipate that it will b necess ry to use
this clWe veause. ry sincerely hope it will not, not only
for ourselvoes but fr the countries who will bge lookin at
it primarily as a means of possible escape from the effects of
a reduction in the tareieff. Nvrtheless it is important,
because we cannot fully mticip-te the result of the changes
we are contemmaplating king.
F:thermorae, it hL another very important significance;
,that is just because there is that, great element of uncertainty S E/PC/T/A/PV/11
as to the effects of the changes we are contemplating, the
possibility of having those changes accepted in our own community
depends a good deal upon the assurances which we can offer that
they will not, in fact, produce devastating results, and the
existence of this clause is an extremely valuable instrument
in the hands of those people who are ;anxious to err on the side
of taking risks in the interests of lower barriers to trade,
This does offer the protection that, if we do take risks
and if in the odd case we err on the side of too great reductions,
we will be in a position to ensure that it does not cause serious
social hardship. I ,,ld suggest, therefore, to the Delegate
of Belgium that the application of the very principle which he
himself has outlined justifies fully the retention of that part
of this clause which provides a potential escape clause for
industries at present dependent upon tariff preferences.
CHAIRMAN [Int(ThI-earetrItion)w I :-ould like to ask eloan, C_1bsz,
wheo has baen in chrge oaf the Dommrfting Cit thee, whyte
sentence to whielgich tehege ian Dlate objects is between
brackets.
Mv ErANik oCOLB.(NrIwamay): T sorry -
Mr.HA R T. SCKLE (Unngited KiMrdomha): . Cirwonman, I der
ulif I ci volunteer an explanationo. Yv will observe that
these brackets are round and not squaroe. Runkd bracets are
used in order to render the structure of the sentence tore clear.
W. :t ave used mmco=--zbut thIn xiz- would have read less
clearly if we had used mmcoa s.It is, think punI.:.', relyy for the
purpose of keeping the clarity of the sentewnce that e have
used brackets. S 7 E/PC/T/A/PV/1l
Mr. COLBAN (Interpretation): I would like to add that
those round brackets are already in thndon era LooDzX ft and that
the gD:om.inee ,-ttNe:eion ITYwr did not wantak to mteany
changes of substance.
C.NCVMAn:e(Itirret n)ion n the Fre: I -., --nch-text, a sentence
which appears between brackets has a very big significance and
I .t have Anticipaated thaaltou hcrdlready condemned this
sentence in the bottom of your hearts.
MANr. InterpreCOLB: (tatiton): I was certainly not the
intentioen oaf thg Dommrftein CiWe tte. 'fu could repLace the
brackets by two commas.
cLIY&2S (erpretatiooes n): D-JOsnybody wish to speak on
this subject?
Dr.WA TE.ouHOLALO: (S_h Lrichairma} M nextr. C-n, I ;t
to direct my attention nelgext to the Bian amendment and to the
paragraph which imet seeks to and.
This Arcle conptains the Irncaiple of wh-tis generally
known as thea escape cthluse. I ink you awill all hve read the
directivrese of the Pident off tStahe UnitedStes, which, if I
±ve re-d it corresctply, ley4nuwn thea Uateelegationd Stnes D,ior.
the liability of having an escape chalause in the Crter.
haI mant whink, Mr. Cir,e ought to express a certain amount
ofitu moderate gratde ttao the United Stes for warning .us
beforehand that any conniceesstaions the itd Stes make in these
negoteiations must b taken with a emeasurhae of resrve. Tt is
essentially fair play, to give us that warning. S E/PC/T/A/PV/11
This paragraph as it stands will no doubt be amended, but
a paragraph of this nature will no doubt have to go into the
Draft Charter and therefore, from that point of view, the South
African Delegation will not object in principle to the inclusion
of this provision for escape: But I wish to point out certain
consequences.
Prt of the negotiations are based on the assumption that
the countries of the British Commonwealth must sacrifice, and
sacrifice for all time, curtain rights that they have hitherto
exercised, and exercised for a long time a,pmg ronmthereselvIt. ri
will close to us an alternative way of organising oure trad and
mwiell ake it nccssary for us to break down certain things that
wohave done in pathe Jt in ordor to organism the trade in that
we.
iIs _seruath-t that is intended toe mbcnde possible for us
by the opening of alternatives ways of goranising our trade, and
then, just tompleceot the circleAr, tiecl 34 againa mkes it
possible to close up thaat eltarnteiva wy of organising our
trade to brgin us back to eth original position wee wre In,
without giving us any alternative.
llWo Mr. Chamian,a . I havo said, in the circmuntaceno
i nwhich this clause figures in the Cahretr, we shall, no doubt,
have to accept smoe sort of clause of this nature.w hat I do
wish to say - and sayw ith a good deal of emphasis - is this:
that if a clause like this is used in such a way as gradually
to whittle away wha tew haev paid for giving up that right to
make preferential arragemennts maong ourselves, the whole
basis of the Charter and the Orqanization will fall away; it
cannot continu.e 9
The negotiations have been referred to by the late Lord Keynes
as horse-trading and this Article might very Wall be so inter-
preted: - that we buy a horse for 200 dollars, we pay the 200
dollars, but the party selling the horse is at liberty to take
the horse back and keep the 200 dollars.- Well, if that happens,
something. more will happen, and I want to state that very ex-
plicitly. I want to point out further that the clause as drafted
I am not talking of the principle but the clause as drafted - has
been so drafted as to put the party whose horse and money are being
taken away in a somewhat more difficult position to apply any
corrective measures than the party that took the horse and the money.
The party that starts by taking advantage of this escape clause
must give notice as far in advance as may be practicable. That
sounds very nice but of course " s far in advance as may be prac-
ticable" may be a month, or it may be a week, or it may be twenty-
four hours, But then the Article goes on to any that as a matter
of fact there may be circumstances under which you have to give no
notice, you can Just act first of all and then talk about it after-
wards. Now, what remedy has the aggrieved party got under this
document, - this document which is to be a fair dncument as between
the various countries engaged in horse-trading? - The country
which is aggrieved may not act as precipotately as the country
which created the problem. To start with, an attempt must first
be made to try and arrive at some sort of agreement. Now I think
all of you have had experience in intergovernmental discussions on
matters in which two Governments are in conflict with each other
over a particular thing and you know that that is something which
takes a very considerable amount of time, However, let us assume
that things go particularly fast and that there is established within
a comparatively short time that there is no agreement. May the
aggrieved party then act as pracipitately as the party that has
E/PC/T/A/P'V/11
.- E/PC/T/A/PV/11
10
caused the problem? No; he must give 30 days notice, and he can-
not act before the expiration of 30 days. What is more, he must
make up his mind inside the, period of 60 days whether he is going
to act at all and when the 60 days have passed then he may not act
any more. So that if, in a desire not to put more limitations on
international trade, he should, in the first 60 days, think that
probably no great harm will be done and therefore it is. not necessary
for him to act, and ho then finds within the next period of 60 days
that a great deal of harm is done to him, he can no longer act
because the period has passed. That is the draft as it stands
now, in plain EnGlish.
The English is not so plain at one other point. I do not
want to try to suggest that we deal with this point now, I am
mentioning it only so that the drafting committee can take note of
it. The words at the end of the first sentence of paragraph 3,
"...... the suspension of which the Organisation does not dis-
approrve", refers to something. That "which" refers to something
antecedent to that paragraph - which antecedent, which earlier Word
it is, I do not know. It seems to me the English has gone a bit
"Wonky" there and I suggest that tho drafting committee might tell
us what that means.
P. - 11
J.
CHAIRMAN: (Interpretation): As the representative of the
Union of South Africa has said himself, his remarks were of a
general character and did not supply specifically to the amendment
submitted by the Belgian delegation. We shall have a later
opportunity to return to the remarks of the representative of the
Union of South .Africa, but in the meantime I would like to know
if any other delegate wishes to address the meeting in connection
with the Belgian amendment?
DR. G. GUTIERREZ (Cuba): Referring exclusively to the
Belgian amendment, the Cuban delegation thinks it is worth while co
remember that this matter. came up as article 29 of the original
United States proposal. It was stated from beginning that it was
an escape clause, but at that time it seemed it was not clear
enough that the concessions granted during the negotiations would
mean not only the concessions on customs duties but, at the same
time, the negotiations made on preferences.
On account of that, when this matter was taken up by the
London meeting, it was very clearly stated there that "the
Preparatory Committee considers that members of the Organization, .
the event of unforeseen developments ando f injurious effects on
their trade caused by or threatened by reasons of the obligations
laid down in Chapter V (including tariff or preference concessions)
should be permitted to withdarw or modify th oebligations to the
extent and for the time necessary to prevent the injurious effects.
The Preparatory Committee agreed that this right should be subject
go adqueate safeguards and to the possibility of counter-action by
other members in the event of the abuse of the right". So, the
equation is clear and the phrase which is between brackets only
gives the proper setting to a principle that has been accepted in - 12 -
London, in New York and, I suppose, in Geneva.
DR. A.B. SPEEKENBRINK (Netherlands): Mr. t'. Chairman, I would
like to continue the remamarks de just now by the Brazilian delegate
whenre ehe frred to the Londonfe conrence.
In the London conference we mentioned there the preferences
existinng, ad then I had occasion to say, when it was said. that it-
was an adopted principle, that we would state the position hof te
prences fereaoos like that. I said then anda thee th-t we ould. not do
anything against theme - they wre there and we had to accept them,
So, we hcave to fae the preferences as thery are thee, and we have,
in the Charter, taken due consideration of the existienge praferncs.
But now, I would ask, why rub it in again in this phrase?
Here, the first part of this paragraph is, I think,
comprehensive enough. We speak of "unforeseen developments
and of the effect of the obligations incurrc-d under or pursuent to
this Chapter". Well, if you include prefereenIces her,
might say why not include here the abolition of quntitative
res?triAnctions importantr point fo other countries is the
curtailment of state trading. We can go on to a very great extent
there simply by including all the sacrifices eof all th countries
entering into this Charter.
I think, therefore, that the first part of this piaragraph s,
as I may rmprepeat, coehensive enough, and in that sense I support
the amendment of my Belgian colleague.
EIC11/T/A/PV/'
. G - 13 -E/PC/T/A/PV/11
CHAIRMAN: The Delegate of New Zealand.
Mr. WEBB (New Zealand.): The New Zealand Delegation hold that
if it must be assumed. that an escape clause of this sort is
necessary, it is a matter of audible necessity to make some such
provision for preferences as is made in these words; that necessity
arising out of what one might call. a fundamental bargain, which
was in a sense the starting point of these Charter Discussions.
CHAIRMAN: The Deletate of the United Kingdom.
MR. SHACKLE (United Kingdom) Mr. Chairman, I would. just
like to make one- comment on the observations of the Netherlands
Delegate.
If I have read this paragraph rightly, it does already extend
to all the different matters, such as quantitative restrictions,
State-trading and so on, which are covered. by this Chapter V.
There is a particular reason, none the less, why the matter
of preferences needs to get a special mention, and that is because,
in the case of all the other measures, the injury would fall upor
the Member where domestic producers suffer; but there is an
intention here, because where it is a preference it is not the
domestic producers who suffer; but producers in the territory
which receives the preferences. For that reason it is necessary,
if you are going to cover all the matters in Chapter V, to-make
a special mention of the case of preferences in order that they
should. be exempt.
CHAIRMAN .RLN: Thegelezate of Belgiun.-
Mr. FOMMRTHOE (Belgium) (InterpretationI): wOuld like to
explain more clearly what I mean by equality of means of defence
and protection. G - 14 - E/PC/T// /PV/11
We have seen many times in a period where the most-favoured-
nation clause was generally admitted the tentative approach of
countries which tried to get together in order to lower the
tariff barriers, in negotiations which were stated to be absolutely
open, which meant that everybody who was outside resolved to
make the saw concessions as had been made at the origin by those
engaged in the original negotiations; but those arrangements were
stillborn, because immediately one invoked. against them the most-
favoured-nation clause.
As far sp:re erential ria tments aecc concerned the
situation is very different. Itis * trueto say that those preferen-
tial treatments werc alsoe th result of negotiations. however,
they were negotiations within a clo sedcircle. Only those with a
certain privilege were atdmited to participate in the negotiations,
Nobody else from the outside was admitted.
Therefore I believe it cannot be said that somebody who is
outside of such an inner circle has the same needs ofg neotiations
with the Members of that circle as two nations which are both not
part of' the inner circle,
(After interpretation)
Mr. FORTHEOMM (Belgium): No,s I aid: "The nation which is
outside the circle has the some action or means of defence as a
nation within (against those without)". V 15 E/PC/T/A/PV/11
CHAIRMAN: The Delegate of Cuba.
Dr. Gustave GUTIERREZ (Cuba): Mr. Chairman, I have listened
with great attention to. the remarks made by the Belgian Delegation,
but I really think we are not now discussing the situation of the
preferential system at all. The preferential system as well as
the Customs Unions are facts In economic and international life.
They have been accepted In the Conference, so to attack a certain
provision which is a consequence of a principle and again raise
an attack on a principle that is not being discussed now, would
lead us nowhere.
It Is a fact that the privileges, if they are so granted
to the members of a preferential system, are not extended to
other nations, but it is Just the same in regard to Customs
Unions. So we are' facing facts of economic life and trying to
bring them together in the best possible form. We do not think
we are attempting to create a Utopia of economic life:, It is in
accordance with the principles already accepted.
CHAIRMAN: The Delegate of Norway.
H. E. Erik COLBAN (Norway): I would like to know what the
words in parenthesis really add to the previous sentence. If
It is agreed that serious Injury to domestic producers is
sufficient to make. applicable this procedure of redress, is not
that enough? Does not that really cover also the case of a
Government enjoying preferences which suffers serious inJury
to its domestic production, or is it the intention. that the
words in parenthesis go much further? I do not quite understand,
and would be very grateful if one of those who have spoken in
favour of the maintenance of these words would be kind enough
to explain. V -16 - E/PC/T/A/PV/11
CHAIRMAN lhe2i T1. teeof United Kingdom.o1 United ICi2:um,
Mx R. J. ingSIm)iLE r(ited KL.nAdo o. dChirmasa Iaul.
Jtpt tl to amlify what I have saide before inn ixpanatior o this
point. d I reallnky o not thi it is veery muceh mor in th last
resort thagn a draftin point.
You see thagt pthis pararah starts by saying: "If, as a result
of aeferesaendovconmets ande of the .ffct of the obligations
incurred under or pursuant to this Chapter", etc. Wall,"the
oblation." on the face of it--I quit. a-rea with the Delegate of
N~way--would seem to cover absolutely everything which isided prov4
for in thief Chapter, that is t) say, reduofction tariffs,
reductions and abolition of preference, abolition ofita quanttive
restrictions, and so on.- everything, in fact. But there is this
essential difference which makes it necessary to mention the case
f.per6frane, that is, as this celau8sis drawn, without the words
in brackets, it refersa tombe Mer into whose territories products
are being imported in such quantities as to "threaten serious
inJury to domestic prtoducs", and when thaat appens themaet Mbr
shall be free to suspend the obligations.
Now that clearly is not a wording which fcan it the case of
a preference, because it is not the domestic producers who are
inJured in this case: sit eip tdh rrouces in a eprefrred territory,
and it is purely, I think, in order to get that p ointclear that
ethOs words in brackets ar- necessary. Ine orodr t make it still
oearer, w. have proposed an daemecit which we will come to later
*mto adedUt tehend ._nf teha ords in brackets: "at the request of
such produecr' sovernment".G That is the opint as I ese it.
CAHRMArN: TheDe lgeate of the Netherlands. - 17 -
Dr.A.B. SPEEKENBRINK (Netherlands): There is one comment I
would like to make on the Delegate of the United Kingdom's reference
to the damage done to the producers and the other country receiving
the preferences. Well, although it vas not so clear in the time
before the War, One could always say that one had a system of
quantitative restrictions, and youwork that system simply by
putting concessions against each other. That system was in favour
of certain countries. In that respect, a certain country receives
a preference in a country applying quantitative restrictions.
If it is abolished, the other country will lose opportunities to
import, and in that case it is comparable with the country receiving
a preference. -
I do not sea much difference there, and that is why I would
pref has s emarked le sh As r ,al.zr,.it.hould be regarded as a
drafting point. Therefore, I belimitteeemightve that a sub-Com
have to study these Articles again and find a form which will cover,
pmore or less, the osition of all the other cnluntries and not oly
countries receiving a preference.
ay add one, thing, Mr. Chairman, jseust to put my caeulearly.
sWCescc -j Ci--t ce clausesre, baaaut we aXr .nsescape. claues
on specific points all the time; and we are in favour of having such
escape clauses formulated in such a way that the International Trade
Or7nisation gshall juds whether there is a serious case for the
l ifting ofcertain obligations from certain countWe es. lqare quite
in favourof having natthne Intetioal Trace Organisation as an
organization to judge the actions of the States, where they are
really entitopled to adt a definite course; but we are against--
again I repeat that--many escape claueses on-spcific points, because
if you have that, in theawhole Chcrtero; there yuhave about a hundred
escape claused,hend Go, nalp,us if we have to find a way in that
labyrinth.
E/P11T/!/PV/ll
,r -18 - E/PC/T/A/PV/11
CHAIRMAN: (Interpretation): I am sorry, Gentlemen,. but I
cannot agree with what Mr. Speekenbrink has just said that this is
a question of drafting. It is a question of substance, and a very
important question it is. It is true what Mr. Gutierrez said that
we are not discussing for the time being the preferences themselves
however, we are confronted with Article 34 which states very
clearly that the escape clause should apply to a country which
receives preference on a product imported in another country and
this causes to threaten a serious injury to the production of
another country. This is a very clear point. The honourable
delegate for Belgium asserts that, in his opinion, this is an
excessive clause, and should be deteted. I would like to ask
Mr. Forthomrne whether he would insist on this amendment being
discussed now or whether he would refer to wait till the
discussion itself shows whether we could not find other way out.
Dr. H.C. COOMBS (Australia): I suggest, to make its clear,
that so far as the Australian delegation is concerned we seek no
privileges on industries which are dependent on preferences which
are not open to industries protected in other ways. Our intention,
in supporting this present draft, was to ensure that the same
facilities for emergency action should be available to them. Since
it is not possible physically for them to be the same - since action
is called for in a different place - we have sought merely to see
that the same sort of emergency action be taken in the only place
where it can be taken,which is in the countries granting the
preference, provided that the purpose of the review of this Article
is merely to ensure that no special privilege is given to such
industries. We are perfectly content to see such examination of
this undertaken and to participate in it. We are not seeking
special .rivileges, but merely to ensure that those privileges in
industries are open to other countries it they are incorporated
under emergency conditions, and that they should be available also to
industries in countries which are dependent union preferential
arrangements. - 19 -
M. Picrre FORTHOMME (Belgium) (Interpretation): Mr. Chair-
man, in view of the very important contribution which has just
been made by the Delegate of Australia, I think it would be use-
ful if, without withdrawing our amendment, we should pursue the
possibility of trying to find solution along the very construc-
tive line just indicated, and I believe that the Drafting
Committee could do some very important and good work in that
respect,
CHAIRMAN (Interpretation): I propose, Gentlemen, to abandon
the discussion at this point and to refer the matter to the Sub-
committee,
We are confronted with two other amendments relating to
Paragraph 1, but, as far as I can see, they are purely drafting
amendments; one emanates from the United Kingdom Delegation
and the other from the Delegation of the United States. If
those Deleations do not wish to explain their proposals right
here, I think we could refer the whole question to the Sub-
committee.
Mr. R. J. SHACKLE (United Kingdom): That course is
agreedable to us.
Mr. John W. EVANS (United States): We agree, Mr. Chairman,
CHAIRMAN (Interpretation): The two amendments will go
immediately to the Sub-committee.
The Delegate of China.
Mr. C. H. CHEN (China ): Mr. Chairman, the Chinese
Delegation would like to suggest, in regard to the last sentence
of this paragraph, that the phrase "in respect of such product"
E/PC/T/A/PV/11
S S -20-E/PC/T/A/PV/11
be altered to read: "the Member shall be free in respect of
such product, to suspend the obligation in whole or in part."
The original wording of that phrase seems to us to be rather
ambiguous. This is not a change of substance, but it will
make the wording more clear.
CHAIRMAN (Interpretation): I believe the proposal just
made by the Delegate of China is partly covered by the United
States amendment. It might be as well to transfer this amend-
ment immediately to the, Sub-committee. Is that agreed?
We now come to Paragraph 2, which deals with the question of
whether or not certain measures could be permitted without prior
consultation. We are confronted with amendments presented by
the Delegations of Canada, Chile and Cuba, which all assert that
no action should be permitted without prior consultation.
We are therefore confronted with a very important amendment
of substance and I will ask the Delegate of Canada to speak on
the subject.
Mr. J.J.DEUTSCH (Canada): The Canadian Delegation does not
much like Article 34, but we realism that certain, higher
realities make it necessary and therefore, since we have to have
it, we hope it will be used only in the most serious circumstances
and will be used infrequently.
We also hope that the use of this clause will not set in
motion a long chain of counter-actions and withdrawal of
concessions, and so on, and lead to a great deal of difficulty
and friction.
We look upon this as purely an emergency clause, to be used
under clear emergency conditions and we also hope that before
- 20 - S - 21 - E/PC/T/A./PV/11
this emergency action is invoked there will be the maximum
amount of consultation and discussion between the parties
interested, so that un amicable settlement can be reached and
counter-action and that type of thing will not be necessary.
For that reason, Mr. Chairman, we feel it important that
the Article should not be invoked without prior consultation
with the parties affected.
We do not think that those emergencies will develop
overnight. If they are really serious emergencies they can be
anticipated; they will be seen if they are serious. If they are
not serious, then the Article should not be invoked at all, in
our opinion. If they are really serious and will produce wide-
spread repercussions and harm, that can be foreseen and there
will therefore be time to consult.
Questions such as dumping - the difficulties which arise
when there is a sudden dumping into a market - can be dealt with
under other Sections of the Charter, if it is genuine dumping.
A situation like this does not need the invocation of this
Article and therefore we do not see that these emergencies will
suddenly appear and will suddenly cause widespread harm to an
important industry. That can be clearly foreseen, it seems to
us. Therefore we do attach great importance to prior consultation,
because the type of counter-action that will be taken will be far
less, and far less dangerous, than if there is no prior consultation.
If there is no prior consultation, then the counter-action will be
likely to be serious.
Whistwilst I am speaking , Mr. Chairman, I night as well go on to our
second point, which is connected with this: that, if there is no pro-
vision for prior consultation, it seers to us that counter-action
could be taken without prior consultation. We think those two things
must go together, but we stress much more the first point, that we
should always have prior consultation, E/PC/T/A/PV/11
CHAIRMAN (Interpretation): The discussion on the amendment
submitted by the Canadian delegation is open. Dues anyone wish to
speak? The delegate a Belgium.
M.PIERRE FORTHOMME (Belgium) (Interpretation): It must be
obvious, after what I said myself about the amendment submitted a few
minutes ago by the Belgian delegation, that I am fully in sympathy
with the arguments quoted by the Canadian delegation in support of
the amendment which they have now submitted to this Commission. I
agree that the applicability of the clauses in Article 34 must be
limited and that also the motives which can be quoted in order to
ask for the applicability of these clauses must be equally limited.
But I cannot agree with the contention of the Canadian delegate that
the eases which are covered by Article 34 are such that they can
always be foreseen and forecast. There may be the case of a
certain number of small neighbouring countries where the distances
which separate them from each other are smell and where overnight,
or at least within a very short period, due to the fact that the
distances are so small, a great quantity of goods can be dumped into
the other country, thus making useless any appeal to the clauses of
Article 34. I wonder consequently whether the best way of dealing
with the case submitted by our friend from Canada would not be to
draft Article 34, paragraph 2 somewhat differently and instead of
referring to "critical and exceptional circumstances" refer to
"critical circumstances, such that any delay would cause irreparable
damage."
The delegate of the United States.
P.
CHAIRMAN (Interpretation): 23
Mr. JOHN W. EVANS (United States) Mr. Chairman, I wish to
state my agreement with M. Forthomme's remark concerning the possi-
bility of foreseeing in all oases the development of a situation
whigh would require emergency action. I fully agree with the
delegate of Canada in his hope that this clause will not be used
frequently and that it will be used in good faith, but it is in the
nature of an emergency action and it is likely to arise in unexpected
ways at unexpected times without full warning, and for that reason we
feel that it is necessary to retain the possibility, which we sincerely
hope would be used very infrequently, the possibility of taking ac-
tion promptly without the delay required by consultation.
CHAIRMAN: Mr. Coombs.
Dr. H.O. COOMBS. (Australia): Mr. Chairman, like the two
previous speakers, I find myself in great sympathy with the Canadian
point that it is exceedingly undesirable that action should be taken
under this Article without consultation, if that can possibly be
avoided. But I agree, too, that circumstances may well arise in
which that prior consultation is not practicable, and it is there-
fore necessary to provide for the possibility of immediate action in
advance of consultation. At the same time, while I agreed with the
spirit of the suggestion of the delegate of Canada, I did feel that
there was some inconsistency in his attitude that, if We were obliged
to make a mistake, from his point of view, by accepting action prior
to consultation in relation to the first stop in the train of actions,
it was therefore necessary to make the same mistake thereafter. I Itt
seems to me that it is undesirabl to -have action of this kind without
consultation and it can only be justified by the type of circumstances
described by Mr. Forthomme.
p
T/PC/t/A/PV/11 J.
24
It is difficult to offer that sort of justification for
retaliatory action. Before retaliation is taken or action of
an individual member is, in the light of this emergency provision,
deemed to be necessary, it seems to me that all possibility of
consultation, to see whether the original action can be eliminated
or varied,to examine the basis for its justification and so on,
should be taken before retaliation by other parties is accepted as
inevitable.
It does seem to me that the whole purpose of this Charter,
while finally we are forced here and there to come back to
approved retaliation, so to speak, as the only ultimate protection
of countries against irrational action by other countries, is to
postpone such retaliatory action until all other possibilities have
been exhausted. I suggest, therefore, that we would do very well
to hesitate to accept the Canadian suggestion that, because we find-
it necessary to permit initial action without consultation, we
should go on, therefore, to justify retaliatory action without
consultation.
CHAIRMAN (Interpretation): The delegateof Chile.
M. F. GARCIA-OLLINI (Chile) (Interpretation): Mr. Chairman,
the Chilean delegation has presented a reservation on this very
Article, and I want to express my full agreement with what has been
state by the Honourable delegate from Canada.
We believe that such exceptional circumstances cannot be called
regularly "unforeseen" or "sudden". There is a great amount of
possibility of foreseeing and taking the necessary precautions
before the crisis itself arises.
I quite agree with what has been said by M. Forthomme
that we might envisage some occasions on which an emergency
E/PC/T/A/PV/11 J. 25 - E/PC/T/A/PV/11
situation would present itself with that suddeness of which he has
been speaking. However, even in that case, we could provide for
some kind, of accelerated procedure in order to inform the
Organization at least of what is going to happen.
Our main purpose here is to protect a Member who is hit by
such an emergency situation. I will just say that in most of the
cases we would have the possibility of providing for such an
emergency situation, whereas we are running the very grave risk of
producing a real catastrophe in the country against which such
measures could be applied. E/PC/T/A/PV/11
26
I think if such cases as have been imagined by the Belgian
Delegate occur they can, of course, quite possibly be imagined -
it might be a good thing to find some clearer definition of
the conditions in which such an emergency situation would arise,
with all the suddenness and characteristic of being entirely
unexpected.
The Drafting Committee could perhaps find words in which
such a peculiar situation could be plainly and very precisely
explained, and even in that ease I think we should imagine the
possibility of putting into effect an accelerated procedure,
perhaps, not to negotiate, but in order, at least, to know what
measures are going to be taken.
CHAIRMAN: The Delegate of Canada.
Mr. DEUTSCH (Canada): Mr. Chairman, I want to refer to
some of the remarks made by the Member for Australia concerning
our second proposal for immediate counter-action, if prior
consultation is not required in the initial case.
The Member for Australia found difficulty in finding the
logic of our position. I think it is this, Mr. Chairman, that
in such an Article as now drafted, it seems to us there is a lack
of balance between the Member taking the initial action of with-
drawing a concession, and the right of a Member to take counter-
action. The counter-action is only possible if the Organisation
does not disapprove. In other words, there has to be some sort
of supervision by the Organisation, whereas the Member taking
the initial action may take that action even without prior
consulation; and if there is no agreement reached after the
action is taken, consultation takes place afterwards, but the
Member is nevertheless free to go ahead and continue the
withdrawal of the concession - whereas a counter-action is only
permitted to the extent that the Organisation does not disapprove. G
27 E/PC/T/A/PV/11
There is a lack of equality, a lack of balance, in this
provision, and it seems to us that the initiative, the stronger
position lies in the hands of the Member who took the initial
step in withdrawing the concession.
Now the point of our suggestion is, if immediate counter-
action is permitted, it cannot put the same restraint on
countries taking the initial step, if they know they may be
immediately faced with a counter-action. It seems to me it would
not only restore the balance. of the situation but restrain the
frivolous use of this clause; whereas, in the other case, they
may withdraw a concession and go to the Organisation without the
other Members having the right to take a counter-action, and so
there is some difference, in the weight of influence, with the
countries concerned, that may have some practical effect - and
that the weight of influence in the Organisation will not be entirely
equal. That, of course, is just a practical fact - and that is
the logic of this position.
Now, as I said before, I do not attach equal importance to
this particular point as to the first point, that there should
be prior consultation. I have sympathy with the point expressed
by the member for Belgium. I think there is a good argument there.
But I doubt very much really whether these emergencies do appear
so constantly, if they are really serious cases.
We have had considerable experience in this respect,
Mr. Chairman - I do not think any country is more closely linked
than Canada is with the United States, or that more trade flows
across the border than between those two; and it has never
been necessary for us in our long and close association for
either one of us to act without prior consultation. I do not
remember a case, and I cannot think of any situation more G. E/PC/T/A/PV/11l
28
devastating between those two countries.
We are as closely linked economically as any two countries on
the face of the earth, and I do not see where there is a serious
situation that could not be foreseen in time for some kind of
consultation; and I still stress that we attach a good deal of
importance to this.
CHAIRMAN: The Delegate of France.
Mr. BRADUC (France) (Interpretation). Mr. Chairman, I just
want to point out to the Commission that particle 34 refers to an
emergency case, but it is not the only article which refers to
emergency cases, and we have already in our prior consultations,
when we came to Article 7, stated that it should not be possible
for a member State to take any measures without prior consultation.
Therefore, I would be in the mind of supporting the Amendments
presented by the Chilean and. Canadian Delegations, in order to
amend Article 34 in that respect.
I must, however, confess that I have been struck by the very
important remark made by the Honorable Delegate of Belgium, as far
as certain circumstances are concerned, and we would not, oppose any
Amendment without taking into consideration the reasons put forward
by Mr. Forthomme. V E/PC/T/A/PV/11
29
CHAIRMAN: :The Delegate of the Unitedingd;4om.
.. R.J. SHALKIEUnited Kingdom): rM.. Chairman, after
listening to this discussion, I havehtne feeling that this is a
case where a compromise iserGally inevitable. In fact, may,;
sat ;hat it reminds me of the discussion which took pcaoe in the
Drafting mmittee wbnia New York, which resulted in the present text,
oow, I would like to suggest that, by and large, the present
text is not a bad compromise. One knows thaalllX compromises are
unsatisfactory, and this is no exception; but I think itahbs the
makings perhaps of a workable and suitable compromise in the
ccroumstcnoes.
In the first place, I would like to poino aut that it is only
a period of thirty days which has tolefapsbetween hhe action n and
the counteaccction. That is a small changehichoh the aftcting
Committee made at Newo Yrk. Ogriinally iwas a petwaw _ crsiod aof ixty
we reduced X,_cr;ot t) thirty. feel that thirty days is a
&desirable interva to allow. It &allows for feelings to coo,
foxr fsecond thudgt to be thouht, a"nd possbly it may help to
,pcevnt that I th'in thveCahnidan D2elegte dsesribed as "uchai"
reactions from happening. -
made by , po t tnadihnat w;g aado by the. Ca~.iaaeeate as
twantedetoarty whi- th tdt- takeodhe o6ter-ac ion 'ouli have
ganisation for approval. Well, I am nclin We.l, I am' nclined
to thi nk that that is not the right reheadeing of the text. T cxt
ally e uiva n: o uogat sns.Vticoncessions ,tio.- or eoe._io.-
he suspension in wwhic t a~rganization he .;wiz.tio. does
notN disIapprdoveese wwords tha on iorot "does "ot disapprove'
-g not recapprovallirru pomar n . bixt~kig t possible for the
n toOrDisapprove , so to s nsiz~tv z-u facts. A Membere 1'to. to Ab ocr E/PC/T/A/PV/11
30
and
may take counter action/if the counter-action, which it takes
appears to the Organization to be excessive, the Organization
can go to that Member and say, "We think that the counter-action
you arer taking is excessive -you ought to T,.) mIi~it". That _
the way I d th It may be that if that is theif that is the
inafntng sub-eommittee should be ti torh-: u1 , z: - ;
Caear.. .T:i ..he una5 , t iA ta-tio..
3ossuggest, s tje ubJ-ct to a possible improvement
in places, ggoh as tha cu,.estielgian Delegationio D :v;
nd_ of para C .:'' ..graps , that af ang the itteeir.< Commttee
whether lt. can somewhat improve this compromise, but recognize,
nevertheless, that a compromise on these general line is probably
th oeoesaswy solution.
DeelgaateCHfR -teNetherlands. .
1). eKMANk.(Netherlands): Mr. Chairman, as IMr air as I
in Lac-or-, Ination tt exepla:.n2 to th juseeting that st for the reasons
puMt forwardme by .p Forthom, wPartgrn that and aaraph 2, .d we
ed more or less that it apppplies to t plies to exceptional
circwnanoes to show that iat was not e gneral rule but should
only bie applied n verycvery few oases.
for that might else explained here. I1 hhe . sn tin.fir t
we tarkha.;6 tolx gationjincurred under rro(7 w.dinor pursua:t
ao er. ater is, we talk about concessions.o.;Gt: (z; That
milht be m l0ttle azbWe always think or concessions isocicezsion i-
thc way oI tariffs, but theiobligationpter thesforaiwts art -lr
evattwe foregore ;' ghrexoorhe ri~bt, fao inptance, to apgly
counter restrictions which in the aold days was means of spping
the imports, having consultetXon and aftorswaC allowing certain
imports into the country again, after reaching a satisfactory
agreement.
. I might say that a country like HolIand is not in a position
to change the tariff every day. It is a long drawn-out matter
to change the tariff. You have to go to Parliament to get
the approval for doing certain things. You might have certain
emergency action, but that is also generally very difficult to
apply. Therefore, we attach importance to the possibility of
having an escape clause like paragraph 2, and I might seem
here to be contradicting what I have said the .moment before
with regard to escape clauses. But I am convinced that if
you wish to have :in escape clause like this, and perhaps modify it
in the say our Belgian colleague has propssea, it should only
a ply to very exceptional cases. You might be able to forego
many other escape clauses because that would give you the
feeling of security that if something did happen.-- a very great
injury to the economy of your country -- you would be able to
act, provided you are .prepared to put the matter before the
and near its judgment.
I think that in the case of countries like Holland, I own
state here clearly that we are prepared to accept the judgment
of the Organization, and I am not afraid of any abuse or
violation of this clause if we should really adhere to what is
said in paragraph 2, and, as has been remarked by Mr. Shackle,
when it comes to a suspenssoi or which the Organisation does
not disapprove, We might even strongthen that part. This ls
not to get more liberty for countries: it is only to make it
possible for them to enter into all the obligations of the
Charter.
E/PC/T/A/PV/11 E /PC/T/A/PV/11
Mr. J.G. TORRES (Brazil): Mr. Chairman, we prefer to look
at this question in the light of Brazil's experience. Past events
have shown us that if we could not take action quiet enough to counter
certain practices, we would have to see a great deal of damage done
to some of our industries. We cannot see how such emergencies as
have occurred in the past could have been dealt with properly by
waiting for a judgment which will not be very rapid in coming. We
are, therefore, in favour of leaving freedom to countries to act in
time to counter whatever practices may be done in the future that
may have some harmful effect upon us. This brings up a side
,question and we would like to avail ourselves of this opportunity
to bring this to the attention of the Commission. In discussing
Article 17 Brazil, to our regret, has been unable to withdraw two
very serious reservations, and the opinion of some. of the delegations
has been that we could withdraw as well those reservations because,
under Article 34, we could take the emergency action that we were
looking for under Article 17. However, this interpretation does
not seem to be universal, and we would very much insist that the
Drafting Committee which is to be appointed look at this matter from
this standpoint, whether or not the measures we want under Article
17 can be taken under Article 34, because if that is not the case,
then I am afraid the Brazilian delegation would not be in a position
to withdraw such reservations and we might as well go to the world
conference and fight there again for such rights. The point is that,
summarising our views, we want to have prior action guaranteed whenever
we should be faced with an. emergency situation, and whether Article 34
will be ample enough to allow us to take such action that at present
we cannot take under the present drafting of Article 17, and I might
say this consideration is very proper and opportune because the
Drafting Committee on Article 17 has, in fact, been unable to report
a unanimous agreement on that point, and I understand that the
Netherlands delegation have now seen their interests the way we
look at them. If Article 34 is drafted to our satisfaction, then we
might at the same time do away with two points of the Charter. S E/PC/T/A/PV/11
33
CHAIRMAN: The Delegate of Cuba.
D., G-stavo GUTIERREZ (Cab, ): Mr. Chairman, the Cuban
Delegation wishes only to say that it maintains the point of view
expressed at New York, that action should not be permitted without
prior consultation. The permission to take action and counter-
action without. prior consultation will, in our opinion, lead to
a disagreeable situation, which will do no good to the purposes
of the Charter.
The text of Paragraph 2 was conceived when it stated:
"Before any Member shall take action pursuant to the provisions
of paragraph 1 of this A.rticle, it shall give notice in writing
to the Organization as far in advance as may be practicable and
shall afford the Organization and those Members having a sub-
stantial interest as exporters of the product concerned, an
opportunity to consult with it in respect of the proposed
action." Then comes the provision where the difference exists.
It says: "I critical and exceptional circumstances such action
may be taken provisionally without prior consultation, Provided
that consultation shall be effected immediately following upon
the taking of such action."
This.reminds me, Mr. Chairman, of a guerrilla leader who
ordered all prisoners to be shot immediately, and afterwards be
submitted to a courtmartial.
This sort of thing, we believe, may create friction instead
of goodwill amongst a1l nations, which is what we all hope for.
CHAIRMAN: (Interpretation): The Delegate of South
Africa.
Dr. J.E.HOLLOWAY (South Africa): Mr. Chairman, I must
say it is a matter of some comfort to me to hear that Mr.
Shackle also had some difficulty about the meaning of the words S EPC/T/A/PV/11
34
"the suspension of which the Organization does not disapprove."
Mr, Shaokle is an Englishman and no doubt learnt English at
his mother's knoo - unlike myself, who did not know that
English oxisted until I wont from the wild veldt into the town
and understands it better. Whilst his intervention has
given me some idea of what those words are intended to mean,
.his further suggestion creates another difficulty.
If they are also intended to mean, not the suspension
which originally gave rise to this chain of consequences, but
also the latter part, "of which the Organization does not
disapprove." , I would suggest that it would be so easy to say
that it would have probably been soon. The phrase is so vague
that I hope the Drafting Committee will let us know what it
does mean. At resent I feel myself in some difficulty in
dealing with that part of the paragraph because of that obscurity.
Whilst I think we could support the second suggestion of the
Delegate of Canada, I do not know that I own support the first
suggestion, namely, that there must always be prior consultation.
Assuming that an Article like this is necessary, I do not think
that prior consultation is always possible..
The discussion hitherto has gone on the point whether one
can foresee the need for invoking the paragraph. Well, within
limits one can foresee, but suppose you have forseen it, and
suppose you are then under the obligation to te11 all the world that
you have foreseen'it - a country like Belgium might easily be
swamped by telling the world - because these things are never a
secret - because everybody will try. to .get in ahead of the
possible change in the Belgian tariff.
For that reason, I te not think that the first part .of the
suggestion by the Delegate of Canada is practicable, always
assuming that the Article is necessary at all. 35
As to the second part, however, I am entirely in agreement
with the DeIegate of Canada, I do not see why people should
have any tender conscience for the party that has got away
from its obligaitons, If this clause is to be used at all,
it has got to be used only as an exceptional clause and, if
it is not used in very exceptional circumstances, it will under-
mine the whole of this Organization. The more limitations we
put on its use - provided those limitations allow it to be used
in these very exceptional circustances we have in mind - the
better.
This clause, as a matter of fact, clinches the right of
certain groups to be a danned nuisance - excuse me, Mr.
Chairman, I withdràw that word; they will be an unconscionable
nuisance to all the Governments concerned, and if one of the
consequences is that there may be immediate retaliatory action,
then this article will be used only for the purpose for which
it is inserted here, nearly, when there is some exceptional
emergency.
I do not see why you should give the party that starts by
getting away from its obligations a fair field to get away, and
put limitations on everybody else not to take any action, The
party that is prejudiced by it ought at least to have as big
a start after hearing the pistol as the other chap after beating
the pistol.
E/PC/T/A/PV/ll
S J.
36
CHAIRMAN (Interpretation): The delegate of India.
MR. B.N. ADAKAR (India): Mr. Chairman, the Indian delegation
attaches some importance to the procedure laid down in this Article
and, insofar as it provides for action to be taken without prior
consultation in critical and exceptional circumstances, we would
entirely support the remarks made by the delegate for the
Netherlands.
We think that there may be circumstances in which it may be
difficult for a Member giving a concession to accurately forecast
its possible consequences for its domestic interests, and therefore
it is very desirable to make a provision of this kind. We
entirely support the idea that the existence of the provision could
give a greater degree of security and confidence to the Members
when they are negotiating concessions.
However, having said that, there is one further point which we
would like to submit for the further consideration of this-
Commission. It is that this Article relates to the need for-
granting releases from obligations undertaken under this Charter.
The procedure indicates under what circumstances a Member may seek
release from the obligations incurred by it in order to avoid
serious injury to its domestic producers. But there are other
provisions in this Charter which & w_1 with the same subject.
There is the procedure in Article 13, which relates to the
granting of release from implications incurred under this Charter
when such a release is required for the purpose of economic
development. A Member may find that it needs release from the
obligations incurred by it either because there are heavy imports
which threaten the interests of established industries, or because
the increased imports have made the development or the establishment
of an industry impossible.
E/PC/T/A/PV/11 E/PC/T/A/PV/l1
J. 37 E/PC/T/A/PV/11
The circumstances are different, but I suggest that the
procedure laid down for the granting of release should be the same,
or should be similar.
Article 34, which deals with release when heavy imports
threaten the position of an established industry, makes it possible
for the Member to take action without prior consultation with the
Organization,.provided that it informs the Organization immediately
after the action is taken and, if there is no agreement among the
interested Members, to go ahead with the action. In paragraph 3
it has been provided. that the Member which takes the action may, if
it fails to acquire the concurrence of affected Members, maintain
the action only subject to certain penalties, while in Article 13,
in the case of obligations which are negotiated obligations, the
Member may try, under the auspices of the Organization, to secure
the agreement of other affected Members, but if there is no such
agreement, then the Member concerned will not be free to take any
action.
I do not see that there is any adequate justification for
making a distinction between the two cases. In sub-paragraph (b)
of paragraph 2 of Article 13, the Organization may grant the release,
from a negotiated obligation to a Member only upon agreement being
reached with the Members substantially affected. In this case,
even if there is no agreement, the Member would be free to go
ahead with this action.
I would suggest, Sir, that the sub-committee be requested to
go into this question and satisfy itself that there is adequate
justification for making a distinction between the two cases. In
any case, in the course of this discussion, it has been explained
that the provisions of Article 34 apply to all obligations.
- J. 38 E/PC/T/A/PV/11 The sub-committee should consider the desirability of distinguishing
at least between negotiated obligations and non-negotated
obligations as has been done in Article 13. If such a distinction
is necessary in the case of releases required for the purposes of
economic development, I see no reason why such a distinction should
not be made when releases are similarly required for the protection
of established industries. G. -.39 E/PC/T/A/PV/ll
CHAIRMAN: The Delegate of Chile.
Mr. GARCIA OLDINI (Chile) (Interpretation): The discussion
which has taken place, Mr. Chairman, shows very clearly that
it is very difficult, once a text has been drafted and discussed by
a Drafting Committee with certain intentions in the mind of those
who drafted it,. to interpret it to mean something entirely
different.
It is difficult for us at this stage to depart from the
intention which the authors of the text who drafted it have put
into the text.
For instance, the debate which has taken place here this
afternoon indicates that the text of paragraph 3 of Article 34 has
only considered one aspect of the problem, which quite clearly
has two aspects. It has placed itself in the position of States
considered in paragraph 1 of Article 34 who find themselves in a
critical situation and who, in order to escape such critical
situations, are granted certain privileges under paragraph 2 of
Article 34. But if a State by virtue of this clause is authorised,
if it finds itself in a critical situation, to withdraw certain
concessions without previous consultation, obviously the same
privilege should be recognised to those who in defence of their
own interests and in order to avoid an equally critical situation
for themselves, want to take certain counter-measures.
The word "retaliation" has been used here, in connection with
counter-action of States so affected by the withdrawal of
concessions. I do not believe that the word "retaliation" is a
correct expression to describe what is merely a legitimate defence.
It has already been said that; as it stood, the article was a
compromise, but a good compromise. I am sorry not to be in a
position to agree with this statement. E/PC/T/A/PV/l1
40
In order to make it a good compromise the same treatment
should be reserved for Members who withdraw concessions as for those
who take counter-action in order to defend their own interests
in such a circumstance. In other words, if previous consultation
is provided for in the case of a counter-action, the same procedure
should be applicable to a Member who wants to withdraw a concession.
If, on the other hand, no previous consultation is required
from a Member who wants to withdraw a concession, other Members
should equally be at liberty to take counter-action without
previous consultation.
CHAIRMAN: The Delegate of the United States.
Mr. EVANS (United States); Mr. Chairman, I have been listening
with great care to the discussion of the last half hour.
I want to make clear that my remarks are not specifically
directed to the remarks which have just been made by the Delegate
of Chile, but it does seem to me that some of this discussion
indicates that the Article is being considered as something more
than it was originally intended to be by a number of Delegates.
It is labelled "Emergency Action". We have always looked upon
it as an emergency Article - an Article to be used only in cases
where a serious injury was actually being done or about to be done
to produce it Under those circumstances I feel that a good many
of the considerations raised here are not particularly appropriate.
This Article was certainly not intended in our Delegation to be
used as an escape, a general escape from the obligations undertaken
by any Member.
I think that the experience between the United States and
Canada which has been referred to by the Canadian Delegate is an
instructive one. The United States has had experience in the
use of escape clauses, and as the Canadian Delegate has said, in
G. G. E/PC/T/A/PV/1l
41
all our experience there has been no use of such an escape clause
without prior consultation. We feel sure that the other Members
of the Organisation would use this clause with the. same discretion
and in the same good faith.
That does not mean that we think that the clause as. now
written is necessarily perfect. I think that there may be some
merit in the suggestion of the Delegate of Chile, that there should
be a provision which makes certain that the procedure for notifying
the Organisation, and entering into consultation in the extreme.
case, where action is taken without prior consultation, should be
immediate. I think that any language that could be devised, or
proposed language, which would say that a Member taking action
would notify the Organisrtion immediately on his decision to take
such action, may even be worth considering; but I am not certain. E/PC/T/A/PV/ll
I think also there has been some merit in the argument that the
Member affected by this emergency action or action taken without
prior consultation, on the face of it appears to be at some disadvantage;
but the remarks of the Delegate of Australia are, I think, very p~.rtinent.
If, in fact, the action was taken in good faith merely because of an
emergency, it seems extremely unlikely that that action would have
created a similar emergency in the country which considers itself
affected, but I had thought that the present wording of the Article
would take care of the situation if it actually existed: that a
Member who was subjectd--if I may use the expression--to a serious
emergency as a result of the use of Article 34 by another Member, would
have the same privileges as the first Member had. The only qualification.
there is that the orginal action does, in fact, create a serious
emergency and that it is not merely a balancing. action by the second
Member. If it is simply a balancing action by the second Member, it
is hard to conceive the necessity for immediate, precipitate and
perhaps, as has been suggested, ill-considered action. But if there
is any doubt that the Member who has been affected seriously, in such
a way that serious injury has been created, is entitled to the same
privileges as the original Member, I certainly think the paragraph
should be clarified.
CHAIRMAN: The Delegate of Canada..
Mr. J.J. DEUTSCH (Canada):. Mr. Chairman, the discussion has
shown that it will be necessary to work out some compromise on the
various points of view that have been put forward, and some very useful
suggestions h ve been made in that connection, particularly the
suggestion of the Delegate of Belgium and the Delegate of Chile. I
for one am prepared to hand the matter over to the Drafting Committee
to see how the wording can be improved so as to achieve a reasonable
V
42. V 43 E/PC/T/A/PV/l1
degree of agreement. Also, I would like the Drafting Committee to
examine the wording of paragraph 3, which, as has been pointed out,
is obscure, and see if the meaning cannot be brought out a little
more clearly. Therefore, I am prepared, Mr. Chairman, to see this
matter go to the Drafting Committee.
CHAIRMAN: The Delegate of Norway.
H.E. Erik COLBAN (Norway): The Norwegian Delegation agrees
generally with the statement made by the Delegate of the Netherlands.
We are prepared to accept the New York Draft of paragraphs 2 and 3.
This draft, by the way, is practically the same as the London draft,
and we consider it as satisfactory. This does not, of course, prevent
us from agreeing to such drafting amendments as the sub-Committee may
possibly recommend. 44 E/PC/T/A/PV/ll
Mr. L.C. WEBB (New Zealand): Mr. Chairman, as this
discussion has had a big effect on the balance of three parts of
Article 34, the New Zealand delegation wishes to suggest that the
balance of the Article will be greatly improved by deleting from
paragraph 3 the so-called "cooling period", that is the thirty days
provision. It seems to us that as consultation must take place,
and as presumbably it will be a long one, it is a sufficient
an
cooling off period. It seems to us that/even stronger consideration
may be that, in fact, the thirty days provisions may have, in certain
the
circumstances /reverse effect of what is intended, because after all
the period in terms of administrative action is a pretty short one
and a state may require, in order to-exercise its right of
retaliation, to take certain administrative action which will
require necessarily a lapse of time. In all those circumstances a
state faced with the necessity for acting quickly is more likely to
act precipitously than if it had. more time at its disposal. That
is a state affected by this time limit would be disposed to think
and it
that the period within which retaliatory action is allowed,/had better
play safe and take that action.
Mr. C.H. CHEN (China): Mr. Chairman, the Chinese delegation is
in favour of maintaining the text of paragraph 2 as it stands. As
it has been pointed out by the delegation of the United Zingdom, this
is the best possible compromise because this Article is dealing with
emergency action. It would be impossible for every case to have
prior consultation. Under this paragrah, the first setence provided.
for previous consultation, the only exception being for critical or
exceptional circumstances which, as set out, are very limited, and it,
is up to the member to consider whether the circumstance is critical
or not and, at the same time, it is also provided that consultation
will be open immediately, for the affected members. I think it is
quite a fair and practical provision, therefore, and we associate
ourselves with the opinion expressed by the delegations of India,
Netherlands, Norway and the United Kingdom. S E/PC/T/A/PV/11
45
CHAIRMAN (Interpretation): Gentlemen, I think it is time
to put an end to this long and very interesting discussion.
Ideas have been aired here and it sees now that we must come
to a new kind of compromise. There seems to be a general.
consensus of opinion that even in the case of exceptional
and critical circumstances prior consultation should be con-
ceded. However, the conditions of those critical circumstances
may be such that prior consultation would be quite impossible.
The only aim which we must always have in mind is that it
should not lead to abuses.
I do not think that it will be an easy task to arrange for
a new wording to cover that particular aspect of the question-
However, I am sure that the Commission will put all its heart
into the solution off that difficult problem.
I would now like to dispose of the two Belgian amendments
presented to Paragraph 2 and I would advocate that those two
amendments should be sent immediately to the Sub-committee.
As a matter of fact, the two Belgian amendments to
Paragraph 2 are so strictly linked with Paragraph 1 that they
cannot be separated from this main subject and, as Paragraph 1
has already been turned over to the Sub-committee, it would be
only correct that this should also be the case for the Belgian
proposal referring to Paragraph 2.
As to the Belgian and United Kingdom proposals, I should
also like to have them sent to the Sub-committee, as they both
have one single purpose in mind, to take care of the situation
b.th of the countries which grant preferentia1 arrangements
and those which enjoy preferential;arrangements.* S E/PC/T/A/PV/11
46
The only amendment which I should like to take up now,
before we close this meeting, is the amendment of the United
States Delegation,:;which suggests the words "substantially
equivalent" in L s 12 and 13 and makes the comment that they
will give to the Organization a wider margin of decision.
Does anyone wish to speak.
Mr. R.J.SH"CKLE (United Kingdom): Mr. Chairman, as you
invite discussion on the United States amendment to Paragraph
3, I would like to say one or two words,
When I first saw the United States amendment,. which consists
of simplifying the last sentence, I ~.-ouht it was attractive.
It would get rid of the mention of the equivalent obligations
on the one hand and the possible additional action on the
other, But, after hearing this discussion today, I am
inclined to think there is some merit in leaving the text as
it stands.
As the same time, if we say that normally the action
shall be equivalent, you do have to provide for the case where
there is abuse, so I am inclined to think that, on the whole,
the last two sentences are perhaps best as they stand.
I think that the provision for equivalent action would be
useful where a case of preferences is involved., but there is the
question of whether action should be taken against the country
which takes the action or the country which has the benefit of
the action. I think it is useful to have the equivalent action
specified.
CHIRMAN (I terpretation); D s the Delegate of the
United States wish to speak on the subject?
Mr. J - i 7 . W.- EVANS (United States) : Thank you, Mr. Chairman. S
47 hamnet
nori- rot think it was necessarm for ra to ineroducG the amendment,
becauhe I t.enk thc explanaaden mdao by us mn subgittin, it was
simple enough and has been reproduced in the annot ed .tondav
I s:ould likemto ,a=owever, on Mr.on cklo's sIloe estat(mnt.
I .ink it would be well to point out that we have no objection to
the use of the w"sds llubstantially equivalentu. OUr election
of those words was consequent upon our deletion of the last.
satance. ffelt, perhaps in error, that tomme C- Usion would
not want tk taze out the last sentence and leave"subst'~.zantially
equiva"len tu insch a way as to leave no discretion to the
Organization.
I think it ray be possible to accomplish both wMh.at r
Shackle wants and what we want eay lgvinz in the words "sub-
stantially equivalent" andd fininmesoi otherm forula for
expressine tha freedom of action in the Organizatwon Which may
be necessary in exceptionàal .cses
CMANR1T: eDoas anyone wish to speak on this subject?
T:elD _egat Cf Ganada.
Mr. J.J.DSUTZCH (Canada)M Ur. Chairman, weearo in favour
of retaining the wor"s 'substantially eqale2.-nt", for the
tapsons given byeth;l geeIate for the UnitKedgin.dom. I that
requires a change in the nseatonce, we prefer mo Make the
change in the last sentence rather than drop the laset entonce,
B/PCAT/-./PV/11 J . 48 E/PC/T/A/PV/ll.
CHAIRMAN (Interpretation): The delegate for the Netherlands.
DR. A.B. SPEEKENBRINK (Netherlands): I can only say that I
am in favour of retaining the Article as it stands here.
CHAIRMAN (Interpretation): Under these conditions, I believe,
Gentlemen, we can have confidence in the wisdom of the sub-
committee.
Gentlement, it is six o'clock and we have gone through with
Article 34. We begin tomorrow at 2.30 in the afternoon with
Article 35.
The Secretariat has just advised me that we meet in Executive
Session tomorrow at 2.30 in order to approve document E/PC/T/92,
which is the last report of the Working Party on Tariff Negotiations.
Gentlemen, the meeting stands adjourned.
The meeting rose at 6.05 p.m. |
GATT Library | qr778yx2100 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Eleventh Meeting of Commission B. Held on Tuesday, 17 June 1947. at 2.30 p.m | United Nations Economic and Social Council, June 17, 1947 | United Nations. Economic and Social Council | 17/06/1947 | official documents | E/PC/T/B/PV/11 and E/PC/T/B/PV/7-11 | https://exhibits.stanford.edu/gatt/catalog/qr778yx2100 | qr778yx2100_90250082.xml | GATT_155 | 14,608 | 86,770 | UNITED NATIONS
ECONOMIC
AND
SOCIAI COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL.
RESTRICTED
E/PC/T/A/PV/11
17 June 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CORFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
ELEVENTH MEETING OF COMMISSION B
HELD ON TUESDAY, 17 JUNE 1947. AT 2.30 P.M.
The Hon. L.D. WILGRESS (Chairman) (Canada)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel.2247). P E/PC/T/B/PV/11
CHAIRMAN: Will the meeting come to order, please.
We shall resume in Commission B the discussion on the Cuban
proposal for a suggested new paragraph 2 (a). The debate will be
resumed at the point at which we broke off last night. The first
speaker on my list is the delegate of Belgium.
M. RESCLEE (Belgium): (Interpretation): Mr. Chairman,
I should like to take up the discussion as it developed yesterday
when I asked permission to speak.
First of all, the delegate of New Zealand stated that the point
made before Commission A shows a striking contrast to the provisions
of a number of Articles of Chapter V dealing with the rights of
members to resort to other methods to depart from the principles of
free trade.
Then the Netherlands delegate added that this paragraph was
more favourable for certain types of subsidies.
On his part the Cuban delegate stated that the damage caused to
world trade by export subsidies was also caused by domestic subsidies
because it made it possible - for a country to manufacture products
which normally this country should not make. Then he pointed out
that certain countries could resort to subsidies without ever con-
flioting with the provisions of article 30. He also stated that
he could not see very well what the difference was between the
method he suggested and that contained in and authorised by Article
30. J. - 3 - E/PC/T/B/PV/11
Then the Netherlands delegate again said that the source of
funds to allow a reduction of taxation or such a subsidy did not
matter, that the safeguard mentioned by Mr. Shackle did not exist
in all countries. All these statements show obviously that
Article 30 is logical, and that all subsidies have the same of effects
and the same repercussions as other obstacles. In fact, according
to the Draft Charter, countries which are relatively little
developed could find in Article 13 a means of finding the result
looked for.
Other nations more powerful will adapt their technical methods
to the provisions of Article 30, but those countries which, on
account of their weakness; are compelled to follow the unwritten
law of international competition will remain the only ones that
will be deprived of any protection.
No doubt, if one of those countries is affected by subsidy
measures taken by another Member, it will be possible for that
country to apply to the Organization and to inform it that there
exists a form of subsidy, but, as was stressed by the Netherlands
delegate, it will be responsible for supplying the proof, and it
will have to indicate the source of the funds produced, and it
will also be responsible for show ing that such subsidies have a
serious effect on its economy.
Now, the subsidy policy is changing and therefore prejudice
can only be indirect and appear through world trade. The logical
conclusion which would therefore appear to be absolutely necessary
to this Commission is the necessity of extendig the prohibition of
subsidies and of reversing the burdon of proof.
The Commission should accept this conclusion in the interests
of the objectives of this Conference, and of all workers and J. - 4 - E/PC/T/B/PV/11
and producers in the world. We would not have a chance of
being born in a State whose financial resources ane sufficiently
great to make it possible for them to bo protected from
competition, and I should like to point out that in London, at
the beginning, the Conference had a text which in this connection
was definitely insufficient and, essentially speaking, the
purpose of a subsidy is to conteract the free trade of
international competition. G. - 5 - E/PC/T/B/PV/11
The Belgo-Luxemburg Delegation refused to assume the
responsibility of leaving in the hands of the State arms that
are harmful for a concealed economic warfare.
CHAIRMAN: The Delegate of the United States.
Mr. SCHWENGER (United States): Mr.. Chairman, I am not quite
certain what I had in mind to say to the Chair the day before
yesterday, but it is our general feeling that the problem is
best made in a different context, and so we would support the
remarks made by the Delegate of the Netherlands that we adopt it
as part of Article 15.
CHAIRMAN: The Delegate of France.
Mr. LECUYER (France) (Interpretation): The French Delegation
has considered the Cuban Amendment with considerable interest.
I fully realise the reasons for this Amendment, but in our
Delegation we think that the Cuban proposals are firstly, perhaps,
dangerous, and secondly, perhaps, not necessary.
They are dangerous because the first question to be asked
is does the Cuban proposal contemplate a subsidy. The reply to
this is in the negative. As was put boldly by the Cuban Delegate
himself, it simply refers to the application of a domestic tax on
goods imported - a tax which would not be applicable to national
goods. Thus presented the Cuban amendment is, in fact, an
infringement to Article 15, and what is more serious is the fact
that the inevitable result of the Cuban Amendment would be to
cancel the effect of Article 24 which deals with the reduction of
tariffs.
If after an Amendment regarding Customs duties there remains G . - 6 - E/PC/T/B/PV/11
to a country the possibility of applying a special tax on
foreign products, a tax which would not be applicable to national
products, the effects of the reduction that might have been
negotiated will be null and void.
In fact, the Amendment would result in the creation or new
customs duties to be added to the other existing duties, and this
shows the danger of the system, because it goes against the
principle of the Charter itself. V - 7 - E/PC/T/B/PV/11 1
I stated a few nigutesgaeo that the provisions of the
Cuban amendment were also perhaps unnecessary. I am now
going to explain my statement.
In the first two parts of its amendment, the Cuban
Delegation does not considereitenecossary to pay duties and
taxes and it exempts from taxes national products. This is
not a subsidy, but simply a measure of protection while
subsidi sAundeA Lrticle 30 are perfectly possible. Iod: not
see why, in the circumstances, it would not be possible to
resort to some form of subsidy. The Cuban Delegate pointed
out, in this connection, ah t th s.would be difficult, perhaps,
for the budgets of certain countries, because they would find
difficult to bear the burden of a subsidy. But may I
point out that I know a number of highly industrialised
countries--countries that have been industrialised for a long
time--where it is also extremely difficult to find funds for
subsidies in the national budget.
The third point of the Cuban proposal refers to the use
of proceeds of such duties or taxes to makeap ymen s.to domestic
producers; but this is already provided for under paragraph
2(a) of Article 30, and I should like to point out that on
this point the Cuban amendment does not introduce anything
new. Therefore, for the reasons at ted, I'agree with what
has been said by the United States and the Netherlands
Delegate, namely, that the Cuban amendment perhaps could find
st3lp ace n-another context, such as that of Article 15.
AIKMAN:h ThD eelegett of Norway.
E.ikME Lrik LOIBAN (Norway): Mr. Chairman, I do not know
whether you have in mind to refer this Cuban proposal to an
ad hoc sub-Committee, but if so, I would suggest that it
should be sent to the sub-Committee already dealing with E/PC/T/B/PV/11
Articles 14, 15 and 24.
CHAIRMAN: We have now explored this subject rather fully.
A number of Delegates have spoken on the Cuban proposal, and
apart from the Cuban Delegate there has been no support for the
proposal. A number of Delegates have pointed out , however,
that this is a matter which relates more to Article 15; other
Delegates have also noted its effect on Article 11,and 24, and
now we have before us the proposal of the Norwegian Delegate
that the most appropriate course would be to refer the Cuban
proposal to the sub-Committee which has been appointed to deal
with articles 14, 15 and 24. Before, however, putting that
proposal to the Commission, I would like to hear the views of
the Cuban Delegate as to which procedure he thinks would be
the most suitable under the circumstances.
M. R.L. FRESQUET (Cuba): Mr. Chairman, we are ready to
accept the proposal of the Chair and the Delegate of Norway
to submit our amendment to a sub-Committee--the sub-Committee
dealing with Article 15. I would be willing to add anything to
my previous remarks if the Commission considers it pertinent
to do that at this stage, or if it is desired that the matter
should wait until we have the opportunity of dealing with it
in the sub-Committee, I would make my remarks at that time.
It is entirely up to the Chair.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I do
feel that in this matter we should consider the aspect of
saving time and saving labour for this Preparatory Committee as
- 8 -
V V - 9 - E/PC/T/B/PV/11
a whole. We have an enormous amount of work to do and an
enormous amount of ground to cover. We have already had a
quite thorough debate on this amendment, and I think the
trend of opinion in regard to it is perfectly clear. That
being so, it seems to me that it would be very regrettable if
we were simply to refer the matter to another sub-Committee
in which the whole of this debate would once more take place,
and no doubt in the end the result would be precisely the same.
I do suggest that in order to save time, save work and move on
the work of the Committee we should come to a decision now. - 10 -
E/PC/T/B/PV/11
Mr. R.L. FRESQUET (Cuba): Mr. Chairman, we have always felt
that the Sub-Committees were fitted to work in a more detailed way
with all the proposals made by the delegations. We have also felt,
on account of that idea., that our position in the Commission allowed
us to make shorter explanations of the proposals, and we are very
much surprised by the proposal to make a final decision of our
amendment here, but if that is the case, we will have to comply with
the decision of the Commission, but not before the same length of
time is given to the consideration of our proposal as would be given
in the Sub-Committee.
Mr. A..F.van der POST (South Africa): Mr. Chairman, if this
proposal could throw any light on the Cuban amendment, I should
welcome it. However, I think that sufficient time has been given
to it and that it has been thoroughly discussed from all angles.
Therefore, I cannot help sharing the view of the British delegate,
namely that there is no need to refer this to the Sub-Committee on
Article 15. We have heard the views of the different parties here,
and it is perfectly clear in which direction the opinion of the
Commission is tending, and that we should refer this to the Sub-
Committee on Article 15 merely because Article 15 is Chosen to be
mentioned in the Proposal, seems to me to be altogether wrong. I
would therefore like to support the proposal made by the British
delegate.
Dr. E. de VRIES (Netherlands): Mr. Chairman, I should like to
support the proposal to stop the debate at this point, but I should
like to ask the Sub-Committee,which will have to be set-up on Article
30, to consider all the arguments that have arisen before this
Commission about the Cuban amendment, not only in relation to
paragraph 2 but also to paragraph 1 of Articles 13 and 15. In this - 11 -
way the Cuban amendment will again be considered by the Sub-Committee
set-up by this Commission.
CHAIRMAN: We have now, three procedural motions before the
Commission. The first is the proposal made by the delegate of
Norway that the Cuban amendment should be referred to the Sub-
Committee dealing with Article 15. The seoond is the proposa1 of
the delegate of Cuba, that his amendment be dealt with in the
Commission here now. The third proposal is made by the delegate of
the Netherlands, that the matter be examined by the Sub-Committee
which will be set-up on Article 30. I regard the proposal of the
Netherlands delegate as being the furthest removed from the proposal
of the Norwegian delegate, and I would therefore propose that we put
before the Commission the procedural motion of the delegate for the
Netherlands. Will all those members of the Commission who are in
favour of the proposal of the Netherlands delegate to refer the
Cuban proposal to the Sub-Committee on Article 30, please raise
their hands.
Mr. R.L. FRESQUET (Cuba): Mr. Chairman, I wonder if this is
the right way to do it. I am sorry to say this, but I wonder if
it will not put our proposal out of the Sub-Committee altogether,
and the other two proposals would refer it to two different Sub-
Committees. Maybe we could just vote as to whether the proposal
should or should not go to a Sub-Committee, because otherwise there
is a chance that the votes will be split between two Sub-Committees,
and then the proposal for discussing the matter here will get more
votes.
E/PC/T/B/PV/11 S - 12 - E/PC/T/B/PV/11
CHAIRMAN: I would like to point out to the Cuban Delegate
that we would first of all put the vote on the Netherlands
proposal and, if that were lost, we would then put the proposal
of the United Kingdom Delegate, so that the vote would only
come on the Norwegian proposal if the other two wore lost.
Mr. R. L.FRESQUET (Cuba): You are very cautious.
CHAIRMAN: Will all those in favour of the Netherlands
proposal please raise their hands.
For: 8
Against: 8
The proposal is lost by six votes to eight.
We will now vote on the United Kingdom proposal, that the
matter be decided here and now. Will those in favour please
raise their hands.
For: 4
Against: 10
The proposal is lost by four votes to ten.
Mr. R.B.SCHWENGER (United States): Mr. Chairman, I
suggest that there is one other alternative: there is a Sub-
committee on Chapter IV, General Economic Development, which is
also the subject of this discussion. (Laughter).
CHAIRMAN: I think the remarks of the United States
Delegate are perfectly relevant, but unfortunartely we are
already passing through a vote and therefore he is a little
late in making his proposal.
Will those in favour of the Norwegian proposal, to refer
this to the Sub-committee on Article 15, please raise their hands.
For: 9
Against: 2
The motion is carried. S - 13 - E/PC/T/B/PV/11
Mr. R.J.SHAUCKLE (United Kingdom): Mr. Chairman, if I
may suggest something, it is this: in order to save the time
of the Sub-committee on Article 15, our records should be
transmitted to that Sub-committee, so that it should not go
through all this debate again.
CHAIRMAN: That will done as a matter of course.
Before we leave Paragraph 2, the Delegate of New Zealand
has asked for the floor in order to make a statement regarding
a drafting point.
Mr. G.D.L.WHITE (New Zealand): Mr. Chairman, I thank you
for allowing me the opportunity to take the discussion back to
Paragraph 2(a) of article 30. There is one small point which
was worrying me there and that is, that in the fourth line of
the New York draft of Paragraph 2(a) there is a comma after
the word "system": it reads: "...or establish or maintain
any other system, which results in the sale of such product
for export at a price lower than the comparable price
charged for the like product to buyers in the domestic
What I am not clear on is whether those words "which
results in the sale of such product for export at a price
lower than the comparable price," etc. refer only to any
other system, or do they refer to the beginning of the
sentence also: "No Member shall grant, directly or indirectly,
any subsidy on the exportation of any product," which results
in that sort of thing.
I take it that it is possible there could be an export
subsidy which does not result in the export price being lower
than the domestic price. It is possible that an export S - 14 - E/PC/T/B/PV/11
subsidy might be established, the export price might rise
above the domestic price, and the subsidy still be maintained.
In that case, I take it that the provisions of Paragraph 2(a)
would not apply and that the only sort of subsidy which is
in conflict with this is where it actually results in the sale
for expert at a price lower than the domestic price.
I think that is clear if the phrase "which results in
the sale" etc, refers to both things, and I interpret it
that way, but there is the other possibility of interpreting
it, that those words just refer to the ostablishment of any
other system. I think that is a point which might be cleared
up by the Drafting Committee, but I would just like to know
whether my interpretation is correct.
Mr. R.J.SHACKLE (United Kingdom): Mr. Chairman, I
suppose that if we were asked ta express a legal opinion on
the interpretation of this text our answer would be that we were
not able to give legal interpretations, but, i f we were asked
what is our intention behind this paragraph, that is a question
which we are fully qualified to answer.
I have taken part in the development of this matter
over the last three years at least and through all the
discussions in which I have participated the intention has
always been perfectly clear: that is, that all this relates
only to the case where the price for export is depressed
below the corresponding price to buyers in the domestic
market. That, I think, has always been the intention and
I think it should be made clear in that sense.
As to the drafting, I think it is clear as it stands.
because of that crucial comma, but that is always subject
to typographical mistakes and I think it would be a very
good thing if the Sub-committee could find some more definite
and clear way of bringing out the intention. E/PC/T/B/PV/11
CHAIRMAN: I want to thank Mr. Shackle for the explanation
he has given of the intention behind this particular sentence, and
I think we can have it to the drafting committee to see that the
text more clearly expresses the intention.
We have now completed our review of paragraph 2 but before we
pass on to paragraph 3, I would like to take advantage of the
opportunity to announce the composition of the sub-committee which
it is proposed to set up to examine Article 30, after we have com-
pleted our preliminary review. I would like to nominate the
following delegations to be represented on the sub-committee; the
delegates of australia, Belgium, Lebanon, New Zealand, the United
Kingdom and the United States.
The delegate of Belgium.
M. DESCLEE (Belgium) (Interpretation): Mr. Chairman, the
Belgian delegation has expressed its view sufficiently clearly in
the course of the discussion in this Commission and it results from
the Belgian statements that Belgium does not resort to any sub-
sidies. Therefore I think it would be prefarable to appoint the
Netherlands delegate because he may have particular points to
propose in the sub-committee.
CHAIRMAN: In view of the proposal of the delegate of
Belgium I would therefore substitute the name of the delegate of
the Netherlands for the delegate of Belgium. Are there any
comments?
The competition of the sub-committee is approved.
we now pass on to paragraph 3. At the First session in
London the delegate of New Zealand raised the question whether the
domestic price to be considered in this paragraph should not be that
paid to domestic producers. The Drafting Committee added the
words "or of returns to domestic producers" after the words domestic
- 15 -
P. -16- E /PC/T/B/P'V/11
price" in the first line, but the New Zealand delegate reserved the
right to raise his question a gain at the Second Session.
The delegate of New Zealand.
Mr.G.D.L. WHITE (New Zealand): Mr. Chairman, I would
like to say something about this point,but I would prefer to re-
serve my remarks until after we have had the Australian amendment,
which is already tabled on this annotated agenda, brought before
the Commission. Then I should like to say something on that
point.
CHAIRMAN: We shall return to this point after we have con-
sidered the Australian proposal and before we leave the considers-
tion of paragraph 3.
The Australian delegation has proposed a number of changes in
the wording of paragraph 3. The comments of the Australian
delegation are given on page 5 of the paper W/190. I will now call
upon the delegate of Australia to expand upon the comments given
in the paper to which I have just referred.
Mr. E. McCARTHY ( Australia): Mr. Chairman, when this para-
graph was inserted in the draft in London last year, its object was
to make a distinction between those arrangements where there were
straight-out subsidies without any other elements in the arrange-
mants which could counteract the effect of such subsidies, and
schemes which provided for other features which, in the view of the
Organization and of the countries instituting those arrangements,
countered the effect of subsidies.
The view was taken that the real effect of subsidies which
could be taken exception to was the fact that they stimulated pro-
duction, perhaps stimulated it artificially and uneconomically, and
therefore increased the quantity of goods going on to the world's
markets and therefore brought about falls in prices. They could E/PC/T/B/PV/11
not have any other effect than that, because it was not a case of
goods being sold below a world market price and thus bringing about
a form of dumping, but they related to goods which were sold on the
world market at world prices end which were at times sold above the
world market prices in the home market. That was the major dis-
tinction. And it should be said that that paragraph was designed
to relate only to primary products.
In an effort to meet these arrangements and at the same time
not excuse or condone subsidies without any such safeguards, export
subsidies, this paragraph was introduced and the conditions made
as close as possible, as it will be noted the paragraph states that
in the case of schemes which provided for conditions under which the
export prices would actually be higher than the domestic price and
where there were other safeguards, such as the limitation of produc-
tion, and where because of those conditions there was no injury
offered by competitors in the world's markets, then those conditions
in paragraph 2 would not apply.
We in London were satisfied that the principle had been met,
but on examination of the draft we felt that it was not complete.
It is true that the conditions where the domestic price is held
irrespective of the world price and the world price goes higher than
the domestic price has obtained in most of our products, in fact in
all of them to a degree, and the present position is that in all
cases, with the exception of one class of dried fruits, the external
price is higher than the local price.
We felt in looking further ahead that this paragraph excluded
products which were initially or would in future be brought under
such a scheme and which should not be expected perhaps for some time
to reach the stage where the export price was higher than the domestic
price. We have only four products at present coming under these
schemes and I believe that they, all of them, comply with these
P.
- 17 - E/PC/T/ B/PV/11
conditions. But let us suppose, for example, that we desire to
bring rice under a home consumption price scheme - and it does not
mean that we do it necessarily for the purpose of subsidising: we
do it for one good reason and that is to prevent the local price
fluctuating with the export price, and it makes for stability in
the home market and it makes for a return to stability: even if it
is not a real stable return, the tact that one source of income,
namely the domestic market, is stable, does help very much for the
general stability of the industry. If we wished when prices
were low ti introduce a scheme such as this for rice - and we
might - we world find that in the early stages it might be subject to
the penal clauses of this Article because at no stage had the export
price been higher than the domestic price.
Therefore what we wish is first to put in one of the real
objectives which is: "if provision is made for the maintenance at
fixed levels of prices for domestic consumption irrespective of the
movement of export prices and because of such provision the system
has resulted or may result, .. ." The words "resulted or may
result" are designed to meet those products where the introduction
of a scheme is new and whore it has not had time because of the fact
that the export market has not gone high to meet that condition of
the export price being higher than the domestic price.
P.
- 18 - J . - 19 - E/PC/T/B/PV/11
The final point is - and here I am in some doubt - it has
happened in some of our products that we sold at two prices on the
export market, one higher than the other. The reason is that we
have made a contract with countries, and that price is a good bit
lower than the expert price, what might be called free export
price.
That is a further demostration of our good faith in holding
the domestic price very much below the free export market price,
but I have found since drafting that that it has been open to a
good deal of misunderstanding - in fact, I have been asked not only
by those who might be expected to be critical, but my own colleagues,
as to what it meant.
Therefore, I am rather inclined, if the Commission will agree
when it comes to the drafting stage , to withdraw those words in
page 5 which are underlined:- "or because the export price is
held below current comparable representative export prices". For
two reasons I want to withdraw those words. Firstly, it is
probably a temporary condition only, and secondly, it is open to
too much misunderstaing and it might possibly raise questions of
doubt and so on which would have to be explained perhaps in the
future.
To sum up, our idea is that where we have a scheme which provides
for a home price, irrespective of the market price, we have
demonstrated in practice that we hold that domestic price not
withstanding the movement of the export price above and below the
domestic price.
I will give one example of that, Eight years ago, we fixed
the price for wheat at has fluctuated and twepence a bushel. At
that time the export price was three shilling. In that eight
years, the price of wheat has flctuated above and below that - 20 - E/PC/T/B/PV/11
five shillings and twepence, but time home price has been held at
five shillings and twopence. The position is now that the
external price is sixteen shillings, but the home price is still
five shillings and twopence, so we also, in the case of wheat,
have provision for the limitation of production, the theory being
that if prices fell below five shillings and twepence and the
world market continued to be glutted, we would, by government act,
cut down and reduce the acreage for wheat. Therefore, non-
withstanding that we have this home price, which at times may be
higher than the export price, we consider that we are doing much
more to stabilise vvheat prices and to counter the effect of any
artificial stimulation of production of wheat than any other
exporting country. In fact, I think it may be agreed that,as
the production of wheat increases, because our return to the
producer, by mingling the sixteen shillings with the five shillilngs
the
and twopence, is much less than/comparable world prices of other
exporters, we will bring our production more in keeping with the
demand more quickly than those other countries where the stimulus
is greater.
I do not think I need take any more time of the Commission,
beyond saying further that we would be content if the reference to
prices going higher for a period were eliminated, but we agreed to
their going in last year in the effort to make this provision so
worded that it would exclude people who did not have the same
conditions in their schemesas we had, and then the ..nCi- : -ms shall
be determined not to involve the subsidies under the terms of
paragraph 2 of this Article:- "If provision is made for the
maintenance at fixed levels of prices for domestic consumption
irrespective of the movement of export prices/and if the system is
so operated, either because of the effective limitation or
production, or otherwise, as not to stimulate exports unduly or
otherwise seriously prejudice the interest of other Members".
J. G. - 21 - E/PC/T/B/PV/11
CHAIRMAN: The Delegate of New Zealand.
Mr. WHITE (New Zealand): Mr. Chairman, on the question which
we raised at the First Session and again in the New York Session
regarding whether the appropriate comparison should not be one
between an export price and a return to the domestic producer, it
seems that the position is as follows.
We in New Zealand are interested not only in schemes of
stabilisation for the domestic consumers of the consumption price
of some products, but also in schemes for the stabilisation of
returns to producers. But since the schemes we have in mind refer
to the stabilisation of returns to producers irrespective of
whether the production is for the home market or for the export
market, and since in the general drafting of this Article 30 it
seems they accepted that the criterion for determining whether or
not an export subsidy exists is a comparison between the existing
price and the price to domestic consumers, I think we are now in
a position to accept working somewhat similar to the present
paragraph 3, with some reservations which I will mention in a minute.
Coming to the actual text of the Australian Amendment, we
find that the third, fourth, and fifth lines are deleted. That is
the Australian proposal is to delete the words "Which resultsover
a period in the sale of the product for export at a price lower
than the comparable price charged for the like product to buyers in
the domestic market".
As I understand it, that is intended as a drafting point, and
that if those words were deleted the stabilisation scheme might
be determined not to involve an export subsidy, whether or not it
actually did involve the export price beinglower.; but it seems
that since a scheme like this could only be open to challenge when
the export price was actually lower than the domestic price, I think G
- 22 - E/PC/T/B/PV/11
on balance it is better to say so - that is, to leave those
words in, and although with them in it makes it somewhat
cumbrous, that matter may be got over by some re-drafting of
the paragraph to make two sentences out of it, or by some other
means.
The next point that I see in the Australian re-draft is the
changing of the word "may" to "shall" in the sixth line, and I
would support that change because it makes it clear that if the
facts are established to be in accordance with all the provisions
which follow , that is, if it is proved that in some other period
the export price has been high or may be higher, and if all the
other conditions are fulfilled, then it is appropriate that the
paragraph should read: "It shall be determined not to involve
a subsidy on exportation" - and I take it that with that word
"shall" in. the Organisation would not be able to determine
otherwise for some other reasons, apart from the ones which have
been mentioned here; and I think that is a desirable change. E/PC/T/B /PV /11
V - 2*f3 J -./fl/ z'V/.L.
I !otld also support the Australian suggestion to add the
words "or may result", and I would not comment on that any further
because Mr. McCarthy has made it quite clear that the intention
er teac ss to rv)r-tho ia3e of a new scheme being introduced, in
which you might not be able to point to some past period, but I
do not think that the iewroduction of a now scheme should be
prevented for that reason.
Our min criticism of the paragraph as it now stands comes
in the next part, which is on page 5 of our Annotated Agenda, at
the top of the page. Firstsuf all, I would aipport the deletion
of the words "pr because the extort price is held below current
comparable representative export prices". Mr. McCarthy has
already suggested that they would not press those words. But
even without those words, we are not happy about the references
to the limitation of production and to the exact wording which
says "not to stimulate exports unduly".
We doubt whether it is appropriate ttrio ner to limitazin of
production in this context, even though the sentence merely
reads "either because of the effective limitation of production
or otherwise". We doubt whether the concept of limitation
of production is one which should be introduced hero, and which
would apple o all the types of stabilisation schemes which
mi-t be brought under this paragraph. I can think of some
instances in our own country where we have known limitation of
production, but where we have a genuine stabilisation scheme
which is designed to assure a primary producer at the beginning
of a season that he will get a return sufficient to cover his
cost of production and that should enable him to carry forward
his programme of primary production with some confidence.
r V. E/PC/T/B/PV/11
- 24 -
In general, I think that it is unnecessary to put in these
qualifications here, because they are open to the criticism
that the stimulation of exports might be against the interests
of some other Member; but it might equally be in the interests
of some consuming country, and I do not think that the word
"unduly" qualifies that sufficiently. We would prefer the
sentence to read"and if the system is so operated as not to
prejudice seriously the interests of other Members", and we
would take those words to mean that all these other things
should be included in that concept: that .is, that it is only
when the system seriously prejudices the interests of other
Members that it should be open to challenge.
There is one other way of getting around our difficulty
on this point, and that would be:at the very end of page 4
of our Annotated Agenda in the last line there is the word
"and" - "and if the system is so operated". -- If that "and"
were changed to "or" we would be able to accept it, but I
understand that there has been a very long argument about that
word at an earlier Session, and that all these provisos were
linked together by the word "and" in order to assure that the
system would not be open to abuse. I think that if the last
part of the sentence reads as it does at present, the word
"or" is more appropriate, but if we were able to delete these
references to the effective limitation of production and the
reference to not stimulating exports unduly, then we will find
it acceptable to retain the word "and". ER - 25 - E/PC/T/PV/11l
ThecaaEirwWas now take by M;r.RYEYR Faance)iiInplacoe of
The Hon. L.D. WILRSS3S
Mr.A.P. van dr ePOST(oo.uh tAricoa): Mr. Chairman, I a oo=t
ouite certain that I understand teAALustralian amnmmrent. In the
firstp lace, the amendmenpprpp.ose ooj delete the words: "which
results overapp,eriod in the sale oo-w ooj "domestic market". ojw
I think that it is essential to retain that in thsAA.rticle, and
also to retain the littl oocrd "also" in the fourth line of the
.ustralin amnnmmrent and the tenth lin ffi tepp.reset NLew York
draft, because teiilntention here is t o hosw the contrast between
an overseas market or an oversesppii'ce and the domestic mare.t,
which is lower. Attmmles the increaseoif the overseas market
rises to aeaeel higher than the domestic level, and I hnnmk
therefore, t eegoin with, that if eddCrop te hAsitralin a&mendment
we should reinsert the wors wwhich our New Zealand frien aa:s also
rcmmrmended: "which results over a period n the saeoo:f the
product for export atappOrice lower ...." That should be
reinserted, and we shoud also prpopoe the reinsertion of the
little word "also" so as no brnig out the contrast between the
lower and thehipgherpLrices. Tean, Ia;m not cetaintatoutit~he
inclusion of thewoprds"piroviiomn ismnade for the mainteaence at
fixed levlps ofp-rices for domesticcponsupntion". It seems to
me that this limits the clause op on p'articularcoaec - acoase
where th phomepjrice sd fxeds ad. maintained at a fxved lve-l. S -26- E/PC/T/B/PV/11
The Australian Delegate has given us the example of
Australian wheat at 5/2d*
Now I do not think it is necessary to limit the domestic
price of the commodity to a fixed level. If there is such
an improvement in overseas conditions that the price should
rise above the domestic market, even the home consumer should
be allowed to benefit from that. It does not follow that
because there is that rise, it is due to the subsidy in the
domestic market. I is .a;.'v1 _a C' is ' s beyond
the control of the domestic producer, conditions ruling on
the world market, and the domestic producer should be permitted
to benefit from that.
CHAIRMAN (Interpretation): The Delegate of Belgium.
M. DESCLEE DE MAREDSOUS (Belgium) (Interpretation): I
have listened with great interest to the explanations given
in support of the Australian amendment and I must confess I am
not convinced of the necessity for the many changes suggested
by the Australian Delegation.
Some of the cases put forward by the Australian Delegation
can be covered in the text, but what I should like to point out
more particularly is a point which, in my opinion, is of the
utmost importance, namely, the substitution of the word "shall"
for "may", which appeared in the original text. In conformity
with the discussions which took place in London and with the
text which resulted from the London discussions, the Organiza-
tion can, at its discretion, determine the practical affects
of the system and for my part I consider the two words "may"
and "and", in the last line on Page 4 of Document W.190, which
the Australian Delegation suggest should be deleted, as being
of the greatest importance. If any change is made, the whole S - 27 - E/PC/T/B/PV/11
meaning of Paragraph 3 will be completely changed and the whole
matter will come up for discussion again.
In the London text the case of stabilization of prices is
given as an example and it is the duty of the Organization to
examine how the thing works in detail, the Organization's
decision being sovereign on this point, and I adhere to this
viewpoint.
CHAIRMAN ( Interpretation): The Delegate for India.
Mr. B.N. ADARKAR (India): Mr. Chairman, the Indian
Delegation will support the principle underlying the
Australian emendment . It is obvious that the draft submitted
by Australia needs certain drafting improvements. We would
support some of the improvements which have been suggested.
For example, we would like the words "which results over a
period in the sale of the product for export at a price lower
than the comparable price charged for the like product to
buyers in the domestic market" to be retained, as suggested
by the Delegate for New Zealand. We would also support
the retention of the word "also", ich the Australian Dele-
gation propose should be deleted.
As suggested by the Delegate of New Zealand, we would
also favour the deletion of the reference at the end of
Paragraph 3 of the New York draft to stimulating exports
unduly. We suggest the deletion of the words "or otherwise
seriously prejudice the interest of other Members."
In addition to these amendments, we would suggest one
further amendment. The draft seems to indicate that systems
for stablizing domestic prices of primary commodities involve
the maintenance of prices only at fixed levels, but it is
possible to conceive systems under which prices are not maintained
at fixed levels. We think that such systems also should be brought
within the scope of this proposal and we would therefore suggest
that, instead of saying "for the maintenance at fixed levels of
prices for domestic consumption", we should say "for/ maintenance
within fixed limits of prices for domestic consumption." - 28 -
CHAIRMAN: The delegate of the Netherlands.
DR. E. de VRIES (Netherlands): Mr. Chairman, I think that
many of the questions which we are discussin now are just
drafting questions, and that there are only some major points of
substance in the Australian draft which was put before us. I
take, for instance, what the Indian delegate has pointed out, that
fixed levels might also be within certain price margins. We read
that a system for the stabilization of the domestic price is
a system for stabilization if it makes provisions for stabilization,
so that the inclusion of the Australian delegation is redundant,
but we can deal with that in the drafting, I think.
The same things applies to the deletion of the words "which
results over a period", and so on, and the word "also".
I think there are two or three main points. The first one
has already been mentioned, by the delegate of Belgium, that is,
the change of the words "may" and "shall". When we see it in the
French text, it is still worse - the French text is changed from
"pourra être considéré" to "Sera considéré".
The determinations in this Article, following paragraph 6, are
determinations among Members substantially interested in the
commodity. If we take that out, there is the important matter of
substance. I remember quite well that when Australia and
New zealand proposed this in London, they said "Will, our
stabilization scheme is a good one and everybody may study it.
We are glad to show to the whole world what we are doing" so, they
are not afraid to show it eventually to a conference of members
substantially interested in a certain commodity. I think that we
could better retain, as a matter of principle, the words "may be
determined" and not change them into "shall be determined.".
J. The second point of substance is what the Belgian delegate said -
the change of the word "and" into the word "or". . If we change it
to " or", it would mean that in any case, where there might have been
happening, even for a short period, the sale of a product for
export at a higher price, then that will give every possibility of
doing what you like afterwards, and we do not know for what period
afterwards, whether for five years, for ten years or for twenty
years. So, I think the wore "and" is important here, because if
you have "or", then that would take out of the determinations of
the Members interested most of the cases, because Australia says,
with the exception of dried fruits, they are all in that case now,
so there ought not to be any consideration or determination
afterwards for all the Australian products,except dried fruits.
The third point is the proposed deletion of the words
"stimulate exports unduly", not by the Australian, but by the
New Zealand and Indian delegations. I think, Mr. Chairman, that
also is a matter of substance. Not to stimulate exports. unduly
is in paragraph 1 in the production subsidies; not to stimulate
exports at all in proportion to world trade is in paragraph 5 for
all of the export subsidies, so I think that when here we are
taking away these systems of stablization from the export
subsidies into production subsidies falling under paragraph 1,
then we ought to retain the words "not to stimulate exports unduly".
If not, that will fall altogether out of the whole Article, and
that was not the meaning of the London Session. GG -30- E/PC/T/B/PV/11
CHAIRMAN: (Interpretation): Professor De Vries showed us a
moment ago there were three important points to discuss .Therefore
I think we should limit our discussion to the three points, leaving
the drafting points to the Sub-Committee.
CHAIRMAN: (Interpretation): The Delegate of the United
Kingdom.
Mr. SHACKLE (United Kiingdom): Mr. Chairman, I think I
appreciate the need which the Delegate of Australia has suggested,
but I still feel, in common with other speakers, that the desired
text is not satisfactory.
As regards the main points, it seems to me that in the
first place it is definitely desirable in the second line of the
Revised Text to delete the reference to the return to domestic
producers.
As the New Zealand Delegate has observed, that is inconsistent
with the interpretation which we have just given to paragraph 2(a)
by which we interpreted export subsidy as mainly a case in which
the export price is less than the comparable price to home
buyers-
If we were to retain the reference to returns to domestic
producers in the present text we should cast a doubt upon the
interpretation which we have placed upon paragraph 2(a).
My second point relates to the change from "may" to "shall"
in the sixth line, and therefore I agree with several previous
speakers that we must leave a discretion to the Organisation, for
the reason that the rule which is laid down cannot be stated in a
precise term. It seems to me it is a case where particular cases
have to be considered on their merits, and for that reason I think
it is necessary to leave a latitude to the Organisation.
Those, I think, are the points I wished to make. - 31 -
E/PC/T/B/PV/11
CHAIRMAN: (Interpretation): The delegate of Canada.
Mr. DEUTSCH (Canada): I merely wish to support some of the
remarks made by the Delegates of the Netherlands and the United
Kingdom. I am particularly concerned about the substitution of the
word "shall" for "may". I feel that in this field there ought to
be some power of review left to the Organisation, and we would be
much happier if Mr. McCarthy felt satisfied with the word "may".
Finally, we would not agree with the New Zealand proposal that
the references to "unduly stimulate export" and so forth should be
removed. After all, if these things are to be permitted, then it
should be provided that they do not unduly harm the interests of
other exporters. That is, after all, the purpose of the whole
Chapter on Subsidies - that we shall remove this instrument of
economic warfare.In the final analysis any subsidy may be in the
interests of the consumer, but it is not necessarily in the
interests of world trade; and I do not think it is a decisive
argument to say that interests of the consumer might be taken care
of by subsidies. If that is the case, then we do not give any
provisions against export subsidies at all in the Chapter.
I do not think that was the intention. We are interested here
in the effect of subsidies upon world trade in general; and I think
that is the precise criterion in this case. V
CHAIRMAN: The Delegate of the United States.
Mr. R.B. SCHWENGER (United States): Mr. Chairman, this
paragraph as it was drafted at London we felt--and we continue to
feel--supplied, in this Article, a very useful need. It
recognizes that the principle that where a domestic stabilization
system results incidentally in subsidy sometimes and the opposite
type of action at others,-that such incidental subsidization
shall not have the same position under the Charter as has
subsidization which is directly entered into for the purpose of
taking a greater share of the market than a country would otherwise
have. And because it is quite an important consideration, we
were instrumental in extending the paragraph at this Session,
or of putting before the Committee the recommendation that it
be extended, to a similar exception in another portion of the
Charter where subsidies are dealt with, namely, the portion
dealing with countervailing duties and anti-dumping duties,
and I believe that it is rather seriously contemplated, if not
already agreed, that it shall be used for the purpose of exempting
certain types of subsidies from the operation of those portions
of the Charter.
For that reason, we cannot agree with any changes that would
extend the Article to a larger sphere, and we feel that whether
or not it was the intention of the proposals before us to do that,
at least some of them-one in particular--do have that result.
I refer to the addition of the words "or may result" after the
word "resulted" in the first "if" clause. It now provides that
if a scheme of subsidization entered into has a price fixing
provision with it and may at some time result in the sale of the
product for export at a price higher than the comparable price
charged for the like product to domestic buyers, that then it may
E/PC/T/B/PV/11
- 32 - V -33-
be exempted under this paragraph. To us that seems going
extremely far, because in the first place, schemes of
stabilization of whatever sort are subject to a good deal of
pressure from all sides within their own country, and it is
extremely difficult to do any more than hope that a scheme which
is entered on at a time when world prices are low will be
adhered to when world prices are high, if it calls for withholding
from domestic producers the benefits of those high world prices
when they come.
Such schemes have been operated, and the Delegate of
Australia, of course, can put before us some very successful ones
that his Government has operated; but to extend the principle
that a scheme which has no record of successful operation on that
kind of basis may qualify, it seems to us to be a dangerous thing.
We particularly feel that it is not unreasonable to take that
view at the present time, because if such schemes are
conteplated at any kind of reasonable stabilization price, they
could start out now and very rapidly establish a period during
which they could export at a price higher than the comparable
price charged for the like product to domestic buyero. I think
it would be extremely difficult t to find a primary commodity of
which that is not true at the present time, so that any schemes
that are contemplated of the kind that are intended by the
original principle here could go ahead and operate. There would
be very little problem, but what bothers us is that the impact
of the new words would mean that at some times of less fortunate
world prices from the producers' point of view, you might have
a widespread resort to the provisions of this paragraph, and
might not have equally widespread continuation of the schemes
once the price situation had changed.
E/PC/T/B/PV/11 V -34- E/PC/T/B/PV/11
We agree with the previous speakers on the points that
Professor de Vries has made, and I shall not discuss each of
them, but there is one point--the point about the word "may"
which is proposed for deletion and substituted by the word
"shall" could be treated as a drafting point, but it would call
for--as I think one other Delegate has said--a number of
consequent changes. I just jotted down here roughly the type
of thing it would call for in order to retain the meaning.
If you have the text in front of you-- "shall be considered"
instead of "determined""notto involve a subsidy on exportation
uier the terms of paragraph 2 of this Article"; if it is
determined that (1) "and then follows the clause ending with
"and" and then (2), climinating the words "if the", that would, I
think, retain the essential meaning which you have with the
word "may" and we think that would be quite a good drafting
change for the sub-Committee to look at. We agree also
with the last two or three speakers on the point suggested here
by the Delegation of New Zealand. ER
- 35- E/PC/T/B/PV/11
CHAIRMAN (Interpretation): I think the delegate for riew
Zealand wishes to answer certain observations which have been made
a moment ago.
Mr. G.D.L. WHITE (New Zealand): Mr. Chairman, I apologise
for entering the discussion again, but I would like to say a few
words in order to correct the misunderstanding which may have arisen
which
from my earlier remarks, and/has been brought out by the statement
of the United Kingdom delegate. With reference to the words
"domestic producers", I did not wish my remarks to mean the deletion
of any reference to domestic producers in this text. I think that
there are many cases of stabilisation schemes which involve not only
"the domestic price" but also "of the return to domestic producers" and
we originally had the idea of making the whole thing refer to
domestic producers. We have been shown now misguided we were in
that, and we are now happy to make the opening art of the sentence
read: "a system for the stabilisation of the domestic price or of
the return to domestic producers", so as to retain both the
essential elements. S -36- E/PC/T/B/PV/11
M. LECUYER (France) (Interpretation): The French
Delegation is of the opinion that the Australian amendment
would result in a rather deep alteration of the original
Paragraph 3, at least on two essential points. First of
all, as regards the substitution of the word "shall" for the
word "may", we are also of the opinion that it is essential
to maintain a possibility of control on the part of the
Organization. I do not think that Governments should be
allowed to decide by themselves whether or not stablization
systems include or imply subsidies.
Another point which is perhaps even more important:
the Australian amendment completely leaves aside the idea
which was expressed in the original text, namely the com-
parison between domestic and external prices. Paragraph 3
as originally drafted contained a kind of reservation whereby
external prices could vary in the vicinity of domestic
prices, either above or below, but that they remained in the
vicinity of those prices. If we adopt the Australian amend-
ment, there will be no link left between these two categories
of prices and therefore it is possible to maintain almost
indefinitely very high prices abroad and very low prices in
the home market. This would result from the present
Australian amendment.
Finally, I think that the suggestion made by the New
Zealand Delegate, to delete the last words, "as not to
stimulate exports unduly or otherwise ..." would also be
detrimental. The whole question therefore should be
looked into very carefully. But, as a whole, the French
Delegation thinks that the New York text should be maintined,
with the necessary drafting amendments. S - 37 - E/PC/T/B/PV/11
CHAIRMAN (Interpretation): The Delegate of the United
Kingdom.
Mr. R.J.SHACKLE (United Kingdom): Mr. Chairman, I
do not want to waste time over what is mainly a drafting
point, but I would point out that the subsidy on exportation
has a definite connotation, which we have given it in this
text; that is to say, a case where the export price is lower
than the comparable price to buyers in the home market.
That being so, it is the comparison of the price to buyers
in the home market which is the yardstick, not to domestic
producers. I still feel it is necessary to eliminate the
reference to domestic producers for that reason, but I am
willing to leave that to the S.b-committee.
CHAIRMAN (Interpretation): The Delegate of Australia.
Mr. E.McCARTHY (Australia): Mr. Chairman, I will not
go over all the points, but I would like just to answer a
few.
In the first place, the reason that we proposed the
deletion of those words "which results over a period" was
purely a drafting one; we are quite content that this
should go to the Drafting Committee.
We thought our reference to Paragraph 2 - where those
words are stated, and the other words that we introduce
regarding the fixed level of prices for domestic consumption,
and so on - made those words superfluous, but we are quite
content for it to go to the Drafting Committee.
On the subject of "shall" and "may", our view was there
that the Organization has very full discretion in establishing
the facts, and, in effect, it is now given that the Organization
"may." It is in a position to pass judgment, "if..." and so on; S -38- E/PC/T/B/PV/11
"if" again, and, finally, so as not to "... seriously
prejudice the interest of other Members." Our view was
that all those were answered in the affirmative by the
Organization. If it would assist, we would be quite
prepared to see the words "if" provision is made" altered
to "determine whether provision is made." We would be quite
ready for that to go in. We are quite prepared for the
Organization to pass judgment on the scheme. Having done
that, we think it ought to have no further discretion.
Mr. van der Post raised an important point of principle.
AlI I can say is that we believe that if we put on home
consumption prices which are higher than export prices
we are, in effect, taxing our consumers. We think it is
wrong, therefore, that when export prices go very high the
domestic price should follow them and that domestic consumers
should be guaranteed a sound price when prices are low and
then have to pay through the nose when prices are high.
That view was taken in the case of wheat particularly, where
the producers ware told that they could not get external
prices for that part of the wheat which was sold on the
domestic market because they accepted, through Government
instrumentality, a higher price for the wheat when the export
parity was low. That is the principle which we observe.
I think it has at least some of the morality of this question.
The other point to which we attach the most importance
was one raised by Mr. Schwenger. I was hoping it would go
through without any comment. It made all the hurdles until it
met the one he provided. I would ask him whether, if the
principle is accepted - and it is accepted; it was accepted in
London and perpetuated in the Draft - what are we going to do
when we start on a scheme when prices are low - and we have to S
admit that most of these arrangements start when producers
are in trouble and they ask the Government to help them.
They start them and the problem then is to create a scheme
which is going to stand the test of time.
We can only say, in pointing to our schemes, that they
have stood the test of varying conditions. The Government
has withstood all the requests of producers to follow export
parity in the charges made to local consumers. But if
schemes start - and probably they will, particularly when
they have got schemes of proven worth - when prices are low,
and it might be some years before this particular criterion
is reached, namely, that the price fixed above world parity
is found to be lower than world parity, are they going to
be ruled out?
That is the only reason we have put that in and I
think it is, from our point of view, the most important
point in the amendments we have suggested.
I agree that there are other points here in the Draft
which should go to the Drafting Committee, and I think they
will be approved when they do go there.
39 E/PC/T/B/PV/11 E/PC/T/B/PV/11
CHAIRMAN (Interpretation): Gentlemen, we have had up to now
a very long discussion on the amendment which has been presented
by the delegation of Australia. I think we cannot go on with
this discussion in Plenary Session, and therefore I think we should
send this text to the drafting sub-committee, but before doing so
I should like to know the opinion of this Commission.
I should like to know two points. First of all, if, generally
speaking, we agree on the idea suggested to change the word "may"
into "shall", as has been suggested by Mr. Schwenger. On the
other hand, I should like to know if we want to open the door or
not to the conclusion of stabilization schemes when prices are low.
It is possible that the text as submitted by the Australian
delegation does not meet exactly all our views but I should like
to know your views on the principle of this idea.
DR. E. COLBAN (Norway) (Interpretation): Mr. Chairman, I
wonder whether it is wise to send definite instructions to the
sub-committee, and whether it would not be preferable to refer the
sub-committee to the discussions which took place here, and to
ask them to take into consideration the view-points expressed in
this discussion.
CHAIRMAN (Interpretation): It was my intention not to give
definite instructions to the sub-committee, but I was under the
impression that the sub-committee might not have enough instructions
but if you do not wish to give more precise directions, we shall
keep to what has just been said.
The sub-committee will be asked to examine the New York text
and to see to what extent it will be possible to introduce the
amendment presented by the Australian delegation.
J .
- 40 - E/PC/T/B/PV/11
CHAIRMAN (Interpretation): We are now going to examine
paragraph 4. The U.S. Delegation proposes to make some changes
at the end of sub-paragraph (a). This Delegation asks the
suppression of the words: "the difficulty may be determined to
and
be a special difficulty of the kind referred to", and the words.i.e./
in that event the procedure laid down in that Chapter shall
be followed".
Does the Delegation of the United States wish to present some
observation on this question?
Mr. SCHWENGER (United States): Mr. Chairman, this was an
effort to simplify somewhat what happened to be a rather
peculiar text, at least in the sense that it showed something of
an excess of zeal for determination.
The word. "determined" in this Article, as you all doubtless
have in mind, means determined through the Organisation by
consultation among the Members principally interested. The words
say the difficulty may be determined to be a special difficulty
of the kind referred to in Chapter VII, and in that event the
procedure laid down in that Chapter shall be followed.
In the procedure laid down in Chapter VII, there is the
determination through a study group consisting of Members
substantially interested whether it is a special difficulty. But
to say that it may be determined by inter-Governmental consultation
to be a special difficulty - in that event we shall feel the
procedure for determining whether it is a special difficulty for
consultation among the Members is something in excess of
determination, We thought that to refer merely to the procedure
would be all that is required.
- 41 -
G G - 42 - E/PC/T/B/PV/11
CHAIRMAN: The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom): In spite of the simpler
wording which the United States Delegate proposes, we do rather
definitely prefer the original text.
We feel that there is in it a real difference of substance,
in that the existing text in its reference to "may be determined"
and so on, does bring in via Article 66(4) what one might call a
preliminary screening or sifting process which should determine
whether any particular case is of such importance that it deser
-ves to be treated by the rather elaborate and cumbersome
procedure of Chapter VII, which would, of course, involve
the setting up of a study group and so on.
So we felt that should be reserved for cases of real
importance which have a widespread effect, and that the small
case, which touches only one or two countries, should be
settled out of Court, and for that purpose we do feel that it
is very desirable that this screening or sifting procedure
should be kept.
That is all we would wish - to see the existing text
retained.
CHAIRMAN: (Interpretation): The Delegate of New Zealand.
Mr. WHITE: (New Zealand): I fully support what has just
been said by the United Kingdom Delegate.
CHAIRMAN: (Interpretation); The Delegate of the
Netherlands.
Mr. DE VRIES (Netherlands): Mr. Chairman, I fully support
the proposal of the United States Delegate on this point. G. - 43 - E/PC/T/B/PV/11
I think that in such cases, in the first place if you try
to go into bilateral cases when a Member considers that it
should be discussed multilaterally, and then you have to ask
the Members substantially interested - you have just those Members
which would be Members of a study group; so I think that if the
problem of the preliminary stage mentioned by the Delegate of
the United Kingdom is proposed here - if there is a study group
and if they have to determine first, will we come together and say
that this special difficulty shall be a matter for the study gro
group, you give an unreasonable delay to the whole procedure, and
I think it is better in that case for people coming together
just to say and determine that there is a special difficulty,
rather than by creating a study group under Chapter VII and
making a special study and reporting back to the Organisation
and a Conference can follow. Then if we are at some cumbersome
stage of the work, people all over the world can do that.
CHAIRMAN (Interpretation): Does anybody wish to speak on the
American Amendment?
Mr. SCHWENGER (United States): I would just like to say that
I consider this not a point of substance, inspite of what was said
by the Delegate of the United Kingdom.I believe, that the text
of Article 49 makes it quite. clear that any study group, whether
or not formally called one under the terms of Article 48, can
satisfy the requirements as to Conferences. I really do not
believe there is a substantial change; so that while I agree with
the drafting, we do not consider this an important change. V -44- E/PC/T/B/PV/11
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I am
grateful to the United States Delegate, who has offered to
withdraw his amendment. I do feel that had it been maintained,
we should have been involved once more in the rather lengthy
discussion that took place in the London Conference.
CHAIRMAN: Do I understand that the amendment is withdrawn?
Mr. R.B. SCHWENGER (United States): I would rather say
that if there is not general support I would be glad to withdraw
it, but since others have supported it, I do not feel free to
entirely withdraw it.
CHAIRMAN (Interpretation): In these circumstances, I think
we should send this amendment to the sub-Committee who will be
able to find a means of reaching a satisfactory solution.
We are now going to examine paragraph (b). The Delegates
of Canada and New Zealand ask for the deletion of this sub-
paragraph. You can find the remarks in Page 27 of the New York
Report.
The Delegate of Canada.
Mr. J.J. DEUTSCH (Canada): Mr. Chairman, we have always
had difficulty with this sub-paragraph, but our difficulties are
both of interpretation and of principle. Dealing with the
question of interpretation first, it is not clear to us whether
the requirements of paragraph 2, namely, the prohibition of
export subsidies, shall be relaxed when an attempt has been made
to form a commodity agreement but that attempt has failed.
That is one point: having attempted to form a commodity
agreement, the attempt has failed. In that case , the - 15 - E/PC/T/B/PV/11
prohibition of export subsidies is relaxed? Or does it mean
that when a commodity agreement has been formed but that
agreement has failed, the relaxation then goes into effect?
It is a question of at what stage this thing applies. That
is not clear in the Article. It makes a very great difference.
In either case, if the interpretation is such that it
should apply when the attempt to form an agreement has failed,
we would object to the Article as well, because we feel that in
the attempt to form an agreement, the basic equity or the
situation should not be destroyed. If in the attempt to form
an agreement it is realised that some countries may use the
weapon of export subsidies during the negotiations for an
agreement, that is, that if you cannot succeed
in obtaining an agreement, then some countries are in the position
of using the weapon of export subsidies during the negotiations,
that seems to us to be an inequitable situation, because it
gives -8ndue influance to the countries best able to subsidize:
in other words, the wealthier countries as against the smaller
countries; the countries that are less dependent on exports
as against the countries that are more dependent on exports.
That seems to us an inequitable situation in the formation of
an agreement.
If this rule is a sound rule, that there shall be no
export subsidies, then it is a sound rule in all circumstances
and it should not be relaxed during the process of nagotiating
a commodity agreement or in effect released in the sense that
the weapon can be used knowing that if the agreement fails, or
if the countries having that weapon in their hands fail to get
what they want in the agreement, the weapon will come into force.
That, it seems to us, is not an equitable situation.
V V - 46 - E/PC/T/B/PV/11
Secondly, if it is intended that export subsidies may
to
be resorted/when an agreement has failed, that is, after one
has been formed and has failed, we think that that also is not
a sound provision, because if the agreement has failed we do
not see how resorting to export subsidies will make the
situation any better. It would simply reintroduce the
weapons of economic warfare in an already bad situation.
It is a sound rule, it seems to us, whether or not commodity
agreements exist, and we think it rather dangerous that when
a commodity agreement has failed the only thing we can do to
break the situation is to resort to weapons of economic warfare
at that point, and enter into competitive subsidization. That
does not seem to us to be a logical way of improving the
situation. It is nothing else but wielding a big club over
the heads of others, perhaps, and for that reason, as a matter
of principle, we find this paragraph very difficult.
I should go on to say that under the first interpretation,
that export subsidies may come into effect if attempts to
form an agreement fail, this is unsound, for another reason;
that if the attempt to form an agreement has failed, that
may be due to the considered opinion of all concerned, that
an agreement is not necessary. If the attempt to form an
agreement fails it nay be due to countries agreeing that an
agreement is unnecessary, that is at least one of the possible
causes of not reaching an agreement. In that case, why should
the export subsidies be relaxed - if it is agreed that an
agreement is not necessary? Again I say, that for all these
reasons we find it a difficult paragraph, and we suggest is
should be deleted as being inconsistent to the other portiors
of the Charter. - 47 - E/PC/T/B/PV/11
M. DESCLEE (BeIgium) (Interpretation): Mr. Chairman, I fully
associate myself with the views expressed by the delegate for
Canada. Either these provisions have a general character, and in
this case they are not acceptable, or they tend to consider a
particular case and then they can be included in the framework of
Article 35 .
CHAIRMAN (Interpretation): This is paragraph 2 of Article 35.
Dr. T.T. CHANG (China): Mr. Chairman, we understand the fears
just expressed by the Canadian delegate, but we think that the mere
division of this sub-paragraph will not help unless we can think of
Something more constructive to take its place. I do not know what
the Canadian delegate would suggest in case the measures provided
for ir Chapter VII did not succeed.
CHAIRMAN (Interpretation): Before giving the floor to the
delegate of the United States, I should like to ask the delegate for
New Zealand if he maintains his reservation to the New York text?
Mr. G.D.L. WHITE (New Zealand): Mr. Chairman, we fully
support the point of view expressed by the Canadian deleate just
now, and we consider that paragraph 4 (b) is an entirely unnecessary
paragraph, and that the procedure in Chapter VII will have a greater
chance of succeeding in the absence of this clause because, if you
are always allowed to have, at the back of your mind, a return to
export subsidies and such other procedures, when other things do
not succeed, there things are very much open to abuse in our opinion.
Mr. R.B. SCHWENGER (United States): Mr. Chairman, we cannot
agree to the deletion of this paragraph without a full reconsideration
of the various other weapons provided in the Charter, and commended
to those who use them for accomplishing similer purposes. I refer
particularly to subsidies other than export subsidies. S
- 48 -
I am sorry that the matter is being considered on the basis
of equity, because it seems to us that for those whose economic
and political structure has led in the past to the use of
oxport subsidies, rather than other types, those methods of
dealing with a trade problem can be looked at without moral
feeling. different from that with which one looks at other
methods of dealing with that type of problem.
For us - and I speak now just for the particular case
of my country - these export subsidies have come to be used
in a limited degree as a concomitant of a type of internal
price support that is peculiar, I believe, to us.
I think it is necessary to keep always in mind in the
discussion of Paragraph 4 that it deals with cases where
there are special difficulties of the kind referred to in
Article 46, the introductory Article of Chapter VII, and that
it has been agreed by us all, as a basic principle of the
Charter, that such special difficulties call for treatment
different in nature from that which Chapter V provides in
other circumstances, for the same product or for commodities
which are not affected by such special difficulties.
I would like to point out that the structure of the
Article with which we are dealing as a whole is as follows: we
permit subsidization, except where injury is such as to bring
into operation complaint and consultation procedures. We bar
only such subsidization as results in a price differentiation
between the domestic market and the foreigen market, and when
E/PC/T/B/PV/11 S - 49 - E/PC/T/B/PV/11
there are special difficulties we have a spacial case. We refer
the case to Chapter VII, but we say that if Chapter VII pro-
cedures do not succeed, then it is still a case outside of this
particular provision barring export subsidies. It is that last
part of the structure of the Article that it is proposed to
delete.
Now I would like to point out that the Article is already
rather strict about the matter. It does not provide, in
those circumstances, for the use of the export subsidies unless
measures provided for in Chapter VII have not succeeded, or do
not promise to succeed, and the question of whether they have
succeeded or not, or whether they promise to succeed or not, is
made the subject of a consultative determination by all the
interested countries, so that, to a certain extent, the club is
in the other hand, because we have renounced the use of export
subsidies except under a situation that is rather difficult to
bring about.
We are conscious that in going even that far we are going
to have a good deal of difficulty, domestically and politically.
We do not believe we can go any farther.
CHAIRMAN (Interpretation): I should like to go on with
the discussion of Article 30 in order to finish this Article
tonight. It is the only importent question remaining on our
Agenda, the last item being purely a drafting question. J. - 50 - E/PC/T/B/PV/11
CHAIRMAN (Interpretation); The delegate for the Netherlands.
DR. E de VRIES (Netherlands): Mr. Chairman, I think it is
true that this sub-paragraph is meant as an escape clause, and as
an escape clause, in the first place, for a primary
commodity, that is, in case even the measures of Chapter VII have
not succeeded or do not promise to succeed.
As to what the Canadian delegate means, I think we have to
consider that carefully. If we get through the United. Kingdom
amendment on Article 37, which means that under Chapter VII you may
have any exemptions from Chapter V, that would mean that if you have
an agreement, that agreement cannot succeed to remover or prevent
the burdensome surplus and then in that agreement we might
establish subsidies of allow subsidies.
That was not the case when that was adopted in London. That
was not the case when the United States Draft Charter was presented,
so that might be one of the reasons why it was put in the original
Draft Charter. So, I think, if we have a good solution for the
problem of Article 37 and of Chapter VII as a whole, then we can
make it clear that this cannot mean that a commodity counts or that
a commodity agreement can provide for certain subsidies, because
already that is in the generall Article.
Therefore this can only be retained as an escape clause in the
case vvhere an agreement does not succeed, orwhere an agreement is
terminated - I should. also take into account the case where an
agreement is terminated because it does not succeed.
Now, Mr. Chairman, we have in paragraph 2(b) of this Article
the possibility for a special amendment, for a special problem,
and the Organization provides for an extension of the period of
an export subsidy, but no possibility, even for the Organization,
to make it possible to re-insert it again if the subsidy has been - 51 -
abolished.
Now what here is put in Article 4(b) is not opening economic
warfare again, but it is giving to the Organization the
possibility of an escape clause, not of an extension of an export
subsidy, but the possibility of a re-insertion, and I think you
cannot leave that out for a special case, but I think you can make
it clear in the drafting that it is only meant for this extreme
case.
CHAIRMAN (Interpretation): I think that two questions arise
in connection with sub-paragraph (b). Firstly, there is an
objection of principle to the text of Article 30, paragraph 4.
Secondly, a number of remarks have been made regarding the
interpretation which could be given to the text.
As regards the principle itself, I should like to recall that
both in London and New York the majority was in favour of the
existing text, and, as was pointed out by the United States delegate
if it is desired to delete this sub-paragraph, the whole Charter
will be upset thereby. Of course, the Preparatory Commission is
not bound by the decisions taken in London, but I do think that it
would be preferable, as far as possible, not to depart from the
compromise which was reached in London after great pains.
J.
E/PC/T/B/IV/11 - 52 - E/PC/T/B/PV/11
If the majority appears to be in favour of the maintenance
of this text, I think it would be wiser to retain it, but on
the other hand the Sub-Committee might be asked to examine just to
what extent the changes made in Article 37 or Chapter VII may
have their repercussions on paragraph 4 of Article 30; and
secondly, if possible, to make the wording more precise in order
to avoid such interpretations as have been pointed out by the
Canadian representative.
CHAIRMAN (Interpretation): The Delegate of Canada.
Mr. DEUTSCH (Canada): Mr. Chairman, in the first place I
cannot admit that the deletion of this paragraph would upset the
whole Charter. I do not believe that is so.
Secondly, I do not know to what extent we are bound in this
case by the decisions in London, and if the majority is in favour
we would accept that; but we are not sure that they are on this
point of retaining the Article.
In any case, if it is decided to retain it, we feel it would
have to be clarified a great deal as to what exactly is meant.
Furthermore, I may at this point also seek to discuss one or
two points made by the American Delegate. He stated that there
would have to be a determination before this Clause could come
into effect, but I feel that the determination required here is
not really a determination of whether an export subsidy shall
go back into effect. Certainly on one interpretation, and perhaps
on any interpretation, the Organisation has no choice in this
determination. There is no real determination - in other words,
if a commodity agreement has failed to come into effect and the
Organisation determines that has taken place, that is no real
determination, it is just a fact - not a determination. And so - 53 -
E/PC/T/B/PV/11
the real question of whether or not to revert to export subsidies
is something not to be undertaken in a circumstance that is not
provided for in this Article by the Organisation.
Now, if that were done, I would be prepared naturally. -
any Member has the right to go to the Organisation and ask the
Organisation to give a relaxation from some commitment, and
there were procedures laid down - if the matter were to be dealt
with on that basis I am perfectly satisfied, as Professor de Vries
pointed out, that under 2(b) there is provision here for the
expansion of export subsidies and a procedure laid down for that
purpose.
If this natter were dealt with in the same way, any Member
that could make a good case that the rule is unduly burdensome to
it, and could make a good case that it should be permitted to
have a relaxation of that rule under the procedures laid down -
obviously in such a case we would have no objection, and we would
be quite willing to consider a solution along the lines suggested
by Professor de Vries. Not only may a Member apply for an
extension, but for re-imposition, in certain circumstances and
procedures where the Organisation has the right to determine
whether or not the request is a proper one. That is something
that applies to other undertakings in the Charter, and in that
connection we are quite prepared to consider it.
We do object, however, to the particular method that is
employed here in this Article.
CHAIRMAN: (Interpretation): The Delegate of the United
States.
Mr. SCHWENGER (United States): Mr. Chairman, I personally
consider that a very constructive approach. Without being able
in any way to see just what we can agree to, I think that the - 54 - ^ vt -
Drafting Cor.ittee ou,ht toofonsider the possibility c using
that approach as a means of reconciling views here. It seems to
me that 5he material in paragraph S which was originally
passed and proposed ought to be re-integrated with it in some way
or other, and the two together probably have a closer relationship
to 2 (b) than is indicated. Those are points that just occur to
me as probably things that ought to be considered.
CUIYAAN (Interpretation): I think that the last proposition
amade by the Delegate of Cnada will allow us to think that the
zb-Comaittee will reach a satisfactory solution, and that this
solution All be accepted not only by the majority of the Members
but byall the Members.
I therefore propose to send this paragraph to the Sub-
Coaite, asking the Sub-Committee to take into account. t
observations aade by Mr. Deutsch.
t/Pt/ /T -p/11
_ V. -55- E/PC/T/B/PV/11
We are now going to examine Paragraph 6. As far as
Paragraph 5 is concerned, there are no propositions, and we
will only ask the sub-Committee to take into account the
observations of Mr. Schwenger. As far as Paragraph 6 is
concerned, I think we could suggest to the sub-Committee that
they take into account the observation made regarding Article 52
and ask them to find a similar solution. Are there any
objections? (No objections).
We have now achieved the examination of Article 30. I
should like to inform you that the sub-Committee, the
composition of which was approved a moment ago, will meet
next Thursday at 10.30 a.m.
The Delegate of Norway.
M.E. Mr. Erik COLBAN (Norway): (Interpretation):
Mr. Chairman, when we began the examination of Article 30, I
pointed out that I did, not enjoy the assistance of an expert.
Our expert arrives tonight and if after a examination of
the situation he finds that he has proposals to make, may I
be allowed to submit our proposals direct to the sub-Committee?
CHAIRMAN: I think we can all agree to that. The
Meeting is adjourned.
The Meeting adjourned at 6.53 p.m. |
GATT Library | xg239nh9843 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Eleventh Meeting of the Tariff Agreement Committee Held on Friday, 5 September 1947 at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, September 5, 1947 | United Nations. Economic and Social Council | 05/09/1947 | official documents | E/PC/T/TAC/PV/11 and E/PC/T/TAC/PV/10-11 | https://exhibits.stanford.edu/gatt/catalog/xg239nh9843 | xg239nh9843_90260038.xml | GATT_155 | 12,533 | 76,698 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/TAC/PV/11
5 September 194 7
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
ELEVENTH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON FRIDAY, 5 SEPTEMBER 1947 AT 2.30 P.M. IN
THE PALAIS DES NATIONS, GENEVA.
Hon. L.D. WILGRESS (Chairman) (Canada)
Delegates wishing to make correotions in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247).
Delegates are reminded that the texts of interpretations, which do
not pretend to be authentic translations, are reproduced for general
guidance only; corrigenda to the texts of interpretations cannot,
therefore, be accepted.
NATIONS UNIES E/PC/T/TAC/PV/11
CHAIRMAN: The meeting is called to order.
We now come to Article VII in the General Agreement on
Tariffs and Trade, to be found on page 17 of document T/189.
This Article deals with formalities connected with importation
and exportation.
Have any Members of the Committee any remarks to make
regarding the inclusion of this Article in the General Agreement?
Does the Committee favour the retention of this Article in
the General Agreement?
Mr. Winthrop BROWN (United States): Mr. Chairman , we do
not feel strongly about the matter one way or the other. We
have a very slight preference for retaining this one, but, as
I say, if any other Delegate has any objection, we do not feel
very strongly about it.
CHAIRMAN: Are there any objections to the inclusion of this
Article? I take it that the Committee approves of the
inclusion of the Article.
Article VIII - Marks of Origin.
H.E. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I was
only wondering why we have deleted paragraphs 1 and 2 of Article
36 of the draft Charter, particularly paragraph 2 -that is
the Most-Favoured-Nation clause for marks of origin.
CHAIRMAN: It was considered that those particular
paragraphs were not very applicable for inclusion in the General
Agreement, particularly the paragraph dealing with Most-Favoured-
Nation treatment, which was considered to be covered by Article l,
the Article dealing with General Most-Favoured-Nation treatment.
Are there any other comments with regard to this Article?
V
2 E/PC/T/TAC/P V/11 3
H.E Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, if
there are no serious reasons against it, I would suggest that we
include paragraph 2 of Article 36 of the Charter in Article VIII.
CHAIRMAN: Dr. Augenthaler suggests that paragraph 2 of
Article 36 of the Charter should be included in this Article.
Are there any objections to the proposal of the Czechoslovak
Delegate?
I take it that the Committee is agreeable to the proposal
of the Czechoslovak Delegate to include paragraph 2 of Article 36
as-(to Dr. Augenthaler) the first paragraph of this Article?
H.E. Z. AUGENTHALER (Czechoslovakia): Yes, I think as the
first paragraph.
CHAIRMAN: Is that agreed?
(Approved)
Are there any other comments with regard to Article VIII?
Are there any objections to the inclusion of this Article in the
General Agreement?
Then I take it that it is agreed that this Article should be
included, with the addition of the second paragraph of Article 36,
as the first paragraph of the Article.
( agreed )
Article IX, Publication and Administration of Trade Regulations.
Are there any comments on this Article?
Have any of the Members of the Committee any objection to
the inclusion of this Article? The inclusion of this
Article is therefore approved.
Article X, General Elimination of quantitative Restrictions.
Are there any comments on this Article?
The Delegate of Norway.
V E/PC/T/TAC/PV/11
Mr. J. MELANDER (Norway): Mr. Chairman, I think that
Article X has to be considered in connection with Articles XI,
XII, XIII and XIV -that is, all the Articles dealing with
quantitative restrictions in the Charter, and particularly
those dealing with quantitative restrictions in order to
safeguard the balance-of-payments position of Members.
Now, if we are to include these Articles in Part II of the
General Agreement, we feel that they ought to be counter-balanced
by the appropriate Articles in Chapter II, namely, Article 5
dealing with the removal of maladjustments v in the balance-of-
payments and Article 7 dealing with safeguards for Members subject
to external deflationary pressure.
The reason for this proposal is that we feel that the
Articles X - XIV, that is, the section of the Commercial Policy
Chapters dealing with quantitative restrictions, will have to be
interpreted in connection with Articles 5 and 7, and not oily
interpreted in connection with them, but Articles 5 and 7 ougnt
to be given an equal standing with the other Articles dealing
with balance-of-payments problems. Consequently, we would be
willing to accept the inclusion of Articles X - XIV in Part II
on the condition that Articles 5 and 7 were also included.
V
4 J. 5 E/PC/T/TAC/PV/11
CHAIRMAN: The Delegate of Norway has proposed that there
should be included in Part II of the Agreement Articles
corresponding to Articles 5 and 7 of the Charter. Are there any
comments on this proposal?
MR. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
one would have to know first the exact draft of the Articles which
were to be inserted in the Agreement, becaus the Article could not
be taken out of the Charter and just put into the Agreement without
any modification.
CHAIRMAN: That same question has been troubling me on looking
at these two Articles. Perhaps the Delegate of Norway would give
some suggestions as to how this matter might be handled if this
proposal were accepted.
MR. J. MELANDER (Norway): Mr. Chairman, when I suggested the
incorporation of Articles 5 and 7, it was, of course, not on the
basis that one should necessarily have exactly the same texts, but
one would have to have the basic ideas of those Articles.
We do not think that it is necessary to make any major alterations
in the text. As far as I can see, roughly the only need for
alteration arises out of the reference in Article 5, paragraph 1 to
Article 3 . If we do not include Article 3 in Part II, it might
perhaps be said that, from a technical point of view, it would be
difficult to have this included. Personally, I do not think that
that is a major consideration.
The Charter will, in any case, be referred to in the Protocol so
that we shall have the complete text of the Geneva Charter for
reference and therefore paragraph 1of Article 5 will then only have J. 6 E/PC/T/TAC/PV/11
to be altered to the effect that the reference is to Article 3 of
the Charter referred to in the Protocol, or something to that
effect. That, as far as I can see, is the only alteration necessary
in Article 5. In Article 7 I cannot see, for the time being at
any rate, any need for alteration.
CHAIRMAN: I might mention for the information of the
Norwegian Delegate that, when the Tariff Working Party were
considering the Draft Agreement, it was found that it would be
advisable for technical reasons to avoid cross references to the
Charter wherever possible, because it is still a Draft Charter, and
it was felt that it was better to use a slightly longer wording in
order to avoid a reference to any particular article of the Charter.
This could be done, I think, in this case if the proposal of the
Norwegian Delegate were accepted by using some such words as these:
"which handicap them in taking action designed to achieve and
maintain full and productive employment and large and steadily
growing demand within their own territories". I think that would fully
meet the point of the Norwegian Delegate and it would get over a
cross reference to the Charter.
The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, may I make
a practical suggestion?
When Articles 5, 6 and 7 of the Charter were discussed by the
sub-committee which was entrusted with the drafting of these Articles,
the sub-committee recommended in its Report that the Report of the
Plenary Commission should contain an Article or provision specifying
that the ease mentioned in Article 7 of the Charter was one of those 7 E/PC/T/TAC/PV/1 1
cases justifying the provisions provided for in Article XXI of the
Tariffs and Trade Agreement, and also justifying the derogations
which are provided for by the states in accordance with paragraph 6
of Article XXIII of the Tariffs and Trade Agreement. I think that
we should take up this idea here and insert such an interpretative
note in the Protocol. We would not have to refer specifically to
Article 7 of the Charter, but we could just describe the cases
mentioned there within this Article. We could state that the cases
provided for in paragraph 3 of article XXI can be applied here, and
also that the derogations provided for in paragraph 6 of
Article XXIII find a justification in their application in such a
case.
DR. H.C. COOMBS (Australia): I would like to suDpport very
strongly the suggestion put forward by the Norwegian Delegate. It
seems to me that some change would be necessary also in article 7
to make it appropriate, but I think that the comments of the French
Delegation indicate the way in which it ought to be amended.
Article 7 says:- "The Organization shall have regard, in the exercise
of its functions under other provisions of this Charter". Well,
clearly so far as the Agreement is concerned there will be no
Organization in its early stages, and it will not be appropriate,
therefore, to refer to the Organization, but it can quite clearly
refer to the Members, both in their individual capacity and with
regard to their taking action under Articles XXI or XXIII where joint
action by the contracting parties is contemplated.
I would suggest, therefore, that Article 7, when it is inserted
in the General Agreement, might read:-"Members individually and in
their joint capacity shall have regard, in the exercise of their
functions, including those contemplated in Articles XXI ond XXIII,
to the need of Members to take action to safeguard their economles
against deflationary pressure.. .etc.". I think the inclusion of
these two Articles would replace the specific proposal of Articles
X, XI, XII, etc. in their appropriate content.
J.
7 S
CHAIRMAN: The Delegate of Czechoslovakia.
H.E. Mr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman,
I wanted only to support the proposal of the Norwegian Delegation.
CHAIRMAN: The Delegate of the United States.
Mr. Winthrop G. BROWN (United States): Mr. Chairman, I
have a confession to make to the Committee; that is, that I
have not the slightest idea, what the attitude of my Delegation
towards this suggestion would be. I would like to ask the
indulgence of the Committee to take advice on the matter and
reserve our position until I have had a chanoo to do so. I
can see it might present difficulties for us. On the other
hand, it might be acceptable. I shall just have to take
instructions.
CHAIRMAN: Are there any other comments?
Baron P. DE GAIFFIER (Belgium): Mr. Chairman, may I ask
the same permission.
CHAIRMAN: In view of the requests of the United States
and Belgian Delegates, would it be in order for us to leave over
these five Articles - Articles X to XIV inclusive - and the
proposal of the Norwegian Delegate for a subsequent meeting?
Is that agreed?
(Agreed).
I would therefore like to propose that we come back to
these Articles and the proposal of the Norwegian Delegate at
our meeting on Monday. Is that agreed?
(Agreed).
We will now take up Article XV - Subsidies. Are there any
comments? Are there any objections to the inclusion of this
Article?
E/PC/T/TAC/PV/11
8 E/PC/T/TAC/PV/ 11 9
The Delegate of Cuba.
Dr. Gustavo CUTIERREZ (Cuba): Mr. Chairman, I only went
to repeat the statement made before by the Cuban Delegation, that
we wish to maintain the reservations we have made to Articles
of the Chairman which have been repeated in the, General Agreement,
CAIRMAN: The Delegate of Syria.
Mr. Hassan JABBARA (Syria) (Interpretation): Mr. Chairman,
it seems to me that This question has been decided already, and
it is quite clear that the reservations which were made by the
various Delegations to the Articles of the Charter are maintained,
if they have not specified to the contrary, in regard to the
Articles inserted in the General Agreement.
CHAIRMAN: The Syrian Delegate is partly correct and
partly not correct in his interpretation. The question of
these reservations was raised by the Cuban Delegate some meetings
ago. (It was another Delegate, not Dr. Gutierrez). He
asked if it was necessary to mention these reservations when
we came to each Article. I said it was not necessary; that
the question of reservations had been hold over and they would
be dealt with when we had considered Article XXVII of the
Agreement, when we would return to them.
We had a very full discussion, lasting more than two-and-a-
half hours, o n the subject of reservations and no definite con-
clusion was reached, but the feeling of a substantial body of
Members of the Committee was that the only reservations which
could be accepted at the time of signature of the General
Agreement were reservations which had been generally accepted.
They were chiefly concerned with provision for the automatic
S 10
S E/PC/ T/TAC/PV/ 11
supersession of Part II by the Charter. That was why the
Chair proposed that all questions of reservations should be
taken up again when we had dealt with Article XXVII.
Then the Cuban Delegate asked me if it was neccessary, when
discussing each Article, to mention the Cuban Delegation's
reservation on that Article. I said it was not necessary and
to save time we would deal with the whole question of
reservations later.
The Delegate of Cuba.
Dr. GUTIERREZ (Cuba): Mr. Chairman, I wish to thank you
for the information, I had had it from the other Cuban
Delegate, but I just wanted to put myself on record.
CHAIRMAN: The Delegate of the United States.
Mr. Winthrop G. BROWN (United States): Mr. Chairman, my
copy of the Charter indicates that the reservation of the Cuban
Delegation is to the portions of the subsidy provisions which
are not included in the General agreement . In consequence,
the reservation does not relate to the first paragraph.
If I am wrong, perhaps he will correct me, but if I am
right he has no reservation to this particular paragraph which
is suggested for inclusion in the General Agreement.
CHAIRMAN: The Delegate of Cuba.
Dr. GUTIERREZ (Cuba): I do not want to take up the time
of the Committee about that, because we made the reservation to
this paragraph at the beginning. I was not speaking about the
reservation on this Article or any other Article, but to those
Articles of the Charter where we have introduced reservations,
- - - - 11
S E/PC/T/TAC/PV/11
and I thought it was a good time to say it.
CHAIRMAN: The Delegate of Chile .
Mr. F. Garcia OLDINI (Chile) (Interprotation): Mr.
Chairman, this question of reservations is a very serious one
and I fear that some misunderstanding may have arisen. If I
understood it correctly it was that the whole of this question
should be taken up again and discussed at the same meeting at
which the Article which the Chairman mentioned would come up
for discussion. Novertheless ,we did not agree on anything
precise on the reservations themselves.
If I understood it correctly, there was a tacit agreement
that this question of reservations and the question of automatic
supersession of Part II should be taken up at the samw time.
There was also a tacit agreement that the reservations which
had been made to the Charter would be mentioned either in the
records of this meeting or possibly in the Final Act.
If I remember rightly, it was also stated that even a
formula might be devised by which, at the lime of signature of
the Final Act, these reservations could be maintained.
I should like this position to be clarified, because I
have made no reservations as yet in the course of the dis-
cussion, although I could have made a certain number of
reservations. If I did not make any reservations it was
because I understood that the debate on this question had been
adjourned for some time, but I would like the position to be
quite clear and I do hope that the Syrian Delegate and I have
not misunderstood the position. S 12 E/PC/T/TAC/PV/ 11
CHAIRMAN: I think the position is quite clear and I
hope that what I have just said did not tend to confuse the
issue. No decisions were reached when we discussed this
question the other day, We had an exhaustive discussion,
but it was very clear that there was no possibility of
reaching unanimity on the question of reservations until we
had considered the question of supersession of Part II by
the Charter.
It was for that reason I proposed a decision should be
deferred until we reached Article XXVII. Various views were
expressed for and against various methods of dealing with
reservations. A substantial body of opinion expressed the
view that the only reservations which could be entertained at
the time of signature of the Agreement were those which were
unanimously agreed to by all the contracting parties.
There were other views expressed, but no decision was reached
and it was agreed that we shold leave this matter until we
dealt with the supersession of the Agreement by the Charter.
It was not considered necessary for Delegations to mention
the reservations which they had made to corresponding Articles
of the Charter, because we could deal with the whole question
of reservations at the same time.
Mr. OLDINI (Chile) (Interpretation): Thank you, Mr.
Chairman .
CHAIRMAN: H r- Members of the committee any objection
to the inclusion of Article XV - Subsidies?
I think we can therefore take it that the inclusion of
Article XV is aproved. p. 13
E/PC/T/TAC/PV/11
CHAIRMAN: Article XVI - Non-discriminatory Treatment on the
part of State-Trading Enterprises.
The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, before going
into that, you will remember that the Article relating to
Subsidies was divided into two Articles - at least I remember
Articles 25 and 26 - and I only wanted to ask why Article 26 which
deals with "Additional Provisions on Export Subsidies" was not
included in the General Agreement.
CHAIRMAN: It is the general basis of the General Agreement
on Tariffs and Trade that it deals with the treatment of imports
into the various customs territories. Article 25: "Subsidies in
General" was considered to have some relation to the importations
into certain countries and therefore it was included, but the other
Article,"Additional Provisions on Export Subsidies" relates to the
treatment of exports, that is exports of one country in competition
with exports of another country, and therefore it was considered
that those particular provisions, while perfectly suitable for
inclusion in the Charter, were not quite proper for inclusion in
the General agreement un Tariffs and Trade which dealt with imports
into rather than exports from a given customs territory.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, I thank you for
your information, although really I am not convinced, because I
suppose export is a part of the Trade Agreement and we are not only
making here an Import Agreement. But, as I say I would always
favour the exclusion of a r,"- and not the inclusion of it, I
will not depart from that previous statement.
CHAIRMAN: The Delegate of Chile. P. 14 ~~~~~~~TAPC/T/l..C/PV/11
Mr. F. Garcia OLDINI (Chile) (Interpretation): Mr. Chairman,
without going as far as the Cuban Delegate, I think that the
positive Aart of article 26 should be inserted here, that is at
least the first paragraph whi:h reads;
"No Member shall grant, directly or indirectly, any subsidy on
the exportation of any product, or establish or maintain
etc.
Because there is a rule, and there are exceptions, and I think that
the rule being established in one case we have also to establish
the, order which is given to the Members, the obligation which is
imposed on Mombers, not to establish any system of that sort
directly or indirectly.
CHJIJR4N: Well, we have passed Article XV dealing with
Subsidies, but, with the unanimous consent of the Committce, we oan
go back to it and deal with the proposal which is made by the
Delegate of Chile. He has suggested, I think, that the first
sentence of paragraph 1 of Article 26 be included. Is that right?
The Delegate of China.
Mr. C.H. CHEN (ChiMr ): In. Chairman, we support the proposal
of Cuba to include theeArticlo deali A with-~dditional Provisions
on Export Subsidies Ag thmee i4reent, as amended by the Delegate of
Chile.
CHLIRMLN: The Delegate of the United States.
Mr. Winthrop BROWN (United States): Mr. Chairman, the
Article XV was incecded booause of the fact that a domestic subsidy
for increasing domestic production could have a limiting effect on
imports and therefore tend to nullify the effect of tariff
concessions and therefore would be something which ought to be
subject to consultation in order to protect our concession. 15
P. ~~P~~~~~ACE/2C/T/T.'X/PV/11
As you pointed out, the further provisions of articles 26 and
27 dealing with export eubsidies got into the realms of competition
between countries in markets of a third country. That is not the
area which is coveredeby the Goncral Agreement. The General
Agreement covers the treatment of the commodities of each country
in the markets of the other country. It is for that reason that
It aeams to us quite inappropArticlehat .. o 26 or any part of
it should be included in the General Agreement.
I have the further point to make that if paragraph 1 of
Article 26 were included, paragrapas 2 and 3 end 4 would certainly
have to be included, because what we have agreed upon here is a
rule with certain exceptions, and you cannot put in the rule without
putting in the exceptions. I would expect that if Article 26 is
included other delegates would want Article 27 in, and you would
have a very substantial increment to the Agreement in an area
which it is not designed to cover and including provisions to which
certain deleates have serious reservations.
We have thereoore come tj the conclusion that it would be
undesirable to include any part of artice Ag6 in tho ,.reement.
C1iULN: The Delegate of Chile.
Mr. F. Garcia OLDINI (Chile) (InterpreMation): Zr. Chairman,
I appreciate greatly the explanations which were given by the
United States Delegate, but nevertheless I cannot hide the bad
impression which I had when these articles on, Subsidies were
discussed in the Sub-Committee and also when the Article on Dumping
was discussed in the Sub-.ommittee, The impression I had at the
time was that one avoided makings a direct condemnation of both of
these practices.
In spite of the repeated proposals, and very clear ones, made
by the Cuban Delegate, dumping was not condemned as such and there
- - - - - 16
P. E/PC/T/TAC/PV/11
was no condemnation of dumping in the Article, but only a set of
rules for dumping practices was drawn up.
In the case of Subsidies, one condemns here the principle of
subsidies and a general principle is laid down in the articles 25
and 26. It is true here that we, have a general principle and that
there are exceptions here, but I do not ask that the articles of
the Charter should be transferred as a whole from the text of the
Charter to the General Agreement. What we could do here is to
draft an Article which would condemn the principle of subsidies.
As I have stated, in the Charter there is a general principle
condemning the principle of subsidies, but what we could do here
is to pass a resolution aiming at the obligations of Members not
to practice subsidies, and after that we could put in a certain
number of exceptions. Therefore we could have, in a few words, a
rule, and provide for the exceptions which would seem necessary
here.
CHAIRMAN: The Delegate of India.
Mr. B.N. ADAKAR (India): Mr. Chairman, I hope the Chilean
Delegate is thinking of the export subsidies and not production
subsidies, domestic subsidies, when he is asking for a principle
to be embodied here.
With regard to the explicit point that we should include in
Part II Articles 26 and 27 or any part of those Articles, I would
submit two considerations. one is that the existing Article on
Subsidies, Article XV, which has been included in Part II, is,
according to our understanding, applicable to both domestic subsidies
and export subsidies, subsidies of both sorts. If this Article
alone goes into Part II the effect is that, whenever a Member gives
any subsidy, whether production subsidy or export subsidy, which
results in stimulating the exports of products from the territory 17
P. E/PC/T/TAC/PV/11
of the Member to any extent, or which results in an undue
reduction in imports, there will be consultation. The other
consideration is that the effect of including Article 26 would be
that, so far as export subsidies are concerned, they would be
banned altogether. But we must remember that if paragraph 1 of
Article 26 were included, paragraphs 2, 3 and 4 would also have
to be included and also Article 27. But if that is done, then
the prohibition of export subsidies will come into operation only
2 years from the date on which the Charter entere into force, and
since the General Agreement will have an initial term of 3 years,
or will be terminable at the end of 3 years, this particular
obligation not to resort to export subsidies at all will probably
not come into force until 3 years. That being so then from a
practical point of view it seems to me that nothing much is to be
gained by including Article 26 or Article 27. V 18 E/PC/T/TAC/PV/11
CHAIRMAN: I take it that the Delegate of Chile no longer
insists on the proposal to include Articles 26 and 27 of the
Charter, or even the first paragraph of Article 26; but he has
made another proposal, which I fear might run contrary to the
ruling I made yesterday. This proposal is, in effect, that
we re-draft this Article on subsidies and, as I pointed out,
these Articles are taken directly from the Charter and we cannot,
at this stage, permit proposals for changes in substance in
these Articles because that would be equivalent to commencing the
work of the Preparatory Committee all over again, and we would
run the danger of being here till well after Christmm.s.
I therefore hope that the Delegate of Chile, after the
explanation he has heard from the United States and Indian
Delegations, will permit us to proceed with the other Articles
in the General Agreement.
M. F. Garcia OLDINI (Chile) (Interpretation): Mr.Chairman,
I regret to say that I am not convinced at all, but I see that
the other Members of the Committee are not convinced by what I
have said and therefore I will not press my point.
CHAIRMAN: I thank the Delegate of Chile.
We take up now Article XVI, Non-discriminatory treatment on
the part of State-Trading Enterprises. Are there any objections
to the inclusion of this Article?
Mr. J. MEIANDER (Norway): Mr. Chairman, I have no
objection to the inclusion of this Article in the General Agreement;
but I would only, for the sake of order, make reference to the
discussion we had the other day about Article II, when the
question of the inclusion also of Article 31 was raised. V 19 E/PC/T/TAC/PV/11
This matter is the subject of discussion by a Sub-Committee
and I may say that it is certain that we shall come to a
unanimous agreement as to how to deal with Article II. Whether
that will provide for the inclusion of Article 31 or not I do
not know at the moment, but I just wished to mention the
possibility that the question of the inclusion of that Article
could be raised again.
CHAIRMAN: That, of course, is understood, and of the
Sub-Committee recommends that we should give consideration to
the inclusion of Article 31 we can do so after the Report of
the Sub-Committee has been presented.
Are there any other comments on Article XVI? I take it,
therefore, that the inclusion of Article XVI in the General
Agreement is approved.
Article XVII - Adjustments in Connection with Economic
Development. Are there any comments on this Article?
Are there any objections to the inclusion of this Article?
The inclusion of Article XVII is approved.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, before going
on to Article XVIII, I wish to ask for some information from the
Chair as to why Article 14 of the Charter has not been inserted
here. Article 14 of the Charter is an Article precisely devoted
to Transitional Measures. I do not see why there has been so
much considerai on given to the transitional measures to be
taken after the Charter has been approved, and yet this Article
dealing with transitounal measures is not included in a
commercial treaty which is going to come into operation earlier
than the Charter. E/PC/T/TAC/PV/11
CHAIRMAN: Article 14 of the Charter was not included
because it was considered that it related more to the Charter
itself and it was not necessary to include it in the General
Agreement. I do not think I can say more than that. There
was not any long discussion on it by the Tariff Negotiations
Working Party: it was felt that it was necessary to include
Article 13, but not Article 14.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, I wish to
thank you most heartily because you have brought me back to my
childhood, when I first started to study. In one of the
books we had this question: "What is a Christian?" and the
answer was "A A Christian is a person who believes in Christ".
In the same way, the Chair has just told us that this Article
of the Chart wrvas not included in the Agreement because it
was covered in the Chart.r! If that is the case, I think I
should move that this Article be inserted in the Agreement.
CHAIRNA.: The Delegate of Cuba has proposed the inclusion
of Article 14 of the Charter in the General Agreement. Are
there any comments on this proposal?
Mr. B.ADAKADSR (India): Mr. Chairman, I think it is
generally agreed that Article 14 is part of a scheme which
starts with Article 13, and therefore it would be reasonable
to include Article 14, otherwise Article 13 may seem incomplete.
Therefore, I would strongly support the proposal of the Cuban
Delegate.
CHAIANia: The Delegate of the United States.
Mr. Winthrop BRNW1 (United States): Mr. Chairman,
20
V 21
V E/PC/T/TAC/PV/11
Article 14 seems to me to provide for action which must be taken
by the parties before the signature of the General Agreement on
Tariffs and Trade, and if they have taken that action, then it is
not necessary to provide for it in the General Agreement itself.
Article 14 states: "Any such Member who is a signatory of the
General Agreement on Tariffs and Trade shall have notified the
other signatory governments not later than thirty days prior to
the day of the signature of the Agreement". It does not seem to
me that this Article is appropriate for inclusion in the General
agreement.
CHAIRMAN: The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): In our opinion, Article 13
covers a different field from Article 14. Article 13 takes into
consideration the possibility of Member Governments proposing to
establish new methods that would be inconsistent with the Charter,
and Article 14 relates to Members who wish to maintain any
non-discriminatory protective measure which has been imposed for
the establishment, development or reconstruction of particular
industries. If you could incorporate that idea in Article 13,
I would be delighted, but at present Article 13 relates only to
future measures.
Mr. Winthrop BROWN (United States): I think that perhaps
the Delegate of Cuba has got a point there, and I think Article 14
would not be appropriate in its present form but that the subject
matter which it covers might be appropriate for inclusion, in some
different language, either as a part of Article VII or as a
separate Article. I would like to think it over and see what
language would be appropriate. Certainly at present Article 14
is not suitable for inclusion. 22
V E/PC/T/TAC/PV/11
CHAlRMAN: The Delegate of Cuba.
Dr. Gustavo GUTTIERREZ (Cuba): Of course, I am in accord with
what the Delegate of the United States has said, because when
we were talking about Article 14, we were not considering the
insertion of the full text, because most of Article 14 relates to
the question of the signing of the Charter and of the Agreement;
but I was referring to the transitional period and that is the
principle which should be inserted in some way in the Agreement.
CHAIRMAN: Could we leave it to the United States and Cuban
Delegations to consult together with a view to drafting a proposal
for the wording of an Article based on Article 14 of the Charter
which might be inserted into the General Agreement? We could then
consider that proposal, if it is submitted to us in writing, when
we come to deal with these Articles a second time.
Dr. Gustavo GUTIERREZ (Cuba): I would be very glad to
co-operate with the United States Delegate, but I think he is quite
capable of doing it alone.
CHAIRMAN: Well, we may leave it that the United States
Delegation will draft the proposal and submit is to the
Delegation of Cuba and the Delegation of Cuba will submit it to
the Committee.
Is that agreed? We now pass on to Article XVIII -
Emergency Action on Imports of Particular Products. Are there
any comments on this Article? Are there any objections to the
inclusion of this Article in the General Agreement?
The inclusion of this Article is approved. J. 23 E/PC/T/TAC/PV/11
Article XIX - General Exceptions
Are there any comments.
DR. J.E HOLLOWAY (South Africa): There is just one point,
Mr. Chairman. It seems to me that there is a comma missing here
and a superflous full-stop at the end of the third line in sub-
paragraph (b) as the sentence is intended to run on.
CHAIRMAN: I think that is quite correct.
Are there any other
Are there any objections to the inclusion of Article XIX?
MR.H. JABBARA (Syria) (Interpretation): There is a mistake
in the French text, Mr.Chairman. Instead of the word "Agreement"
there is the word "Charter".
CHAIRMAN: A will be taken of this mistake.
The Delegate of France.
N. ROYER (France) (Interpretation): Mr. Chairman, I would like
to present a few comments on the provisions of this Article.
In the Charter this Article appeared divided into two different
parts, and Part II allows recourse to be made to the Organization,
but Part I which deals with political matters does not allow such
steps to be taken, that is, Members cannot make recourse to the
Organization.
I would suggest that it would be best if we also divide this.
Article into two parts in the Trade Agreement and have one Article
XIX and the other Article XIX(A) 24
J. E/PC/T/TAC/PV/11
CHAIRMAN: Is the suggesstion of the Delegate of France approved
MR.R.J.SHACKLE (United Kingdom): it rather occurs to me that
it might be best if paragraph 1 becomes Article XIX(A), on the grounde
that there might be something to be said for putting it after the
narrower exceptions of paragraph II.
CHAIRMAN: Is the Delegate of France in accord with the
suggestion made by Mr.Shackle?
M. ROYER (France) (Interpretation): I quite agree , Mr . Chairman
CHAIRMAN: Are there any other comments on the proposal of the
Delegate of France?
MR.R.J.SHACKLE(United Kingdom): The titIe of this Article
is a slight problem.
CHAIRMAN: I think that the solution if this problem would be
so insoluble as to make it difficult to carry out the suggestion of
the Delegate of France .
MR.R.J. SHACKLE (United Kingdom): I wonder if I might make a
compromise suggestion, Mr.Chairman, namely, That Part II becomes
Part I and Part I becomes Part II and they both remain in the same
Article.
M. ROYER (France ) (Interpretation ):Mr .Chairman , nevertheless
I think that it would be possible to find a title - even two titles.
I think that for the second part we could adopt the following title
"Exceptions" only or: "Exceptions to the Rules of Conduct of
Commercial Policy" , but for the first part we would have to say: J. 25 E/PC/T/TAC/PV/11
"Exceptions to the Obligations of Members".
MR. W. BROWN (United States): Mr.Chairman, why not call the
first Part: "Security exceptions" and the second Part: "General
Exceptions".
CHAIRMAN: Are there any comments on this very difficult
problem of finding titles for the two Parts which are now covered
by one Part with one title.
MR. R.J. SHACKLE (United Kingdom): It seems to me,
Mr. Chairman, that the United States Delegates proposal would meet
the case.
CHAIRMAN: I take it then that the proposal, which has now been
modified by the suggestions which have come out during the
discussion, would be that there would be one Article XIX, that is,
"Security Exceptions", and another Article XIX(A) headed "General
Exceptions", or vice-versa.
MR.R.J. SHACKLE (United Kingdom): Might I rather suggest
vice-versa.
CHAIRMAN: Does the Delegate of France agree with that?
M. ROYER (France) (Interpretation): Yes, Mr. Chairman.
CHAIRMAN: The proposal is that we split Article XIX into two,
the first Part commencing with paragraph II and headed "General
Exceptions", and he second part would be Article XIX(A), which
would consist of paragraph I and would be headed "Security
Exceptions".
Is that agreed? J. 26 E/PC/T/TAC/PV/11
H.E. Dr. Z AUGENTHALER (Czechoslovakia): I have no objection,
Mr. Chairman. I only want to make a remark that in this case the
protection of public morals is not a security.
CHAIRMAN: That comes into Part II, which will now be headed
"General Exceptions".
Does the Committee agree with this proposal?
I think, for my own protection that I should mention that I
could not rule this to be a question of substance. Therefore, I
did not rule the proposal of the French Delegate out of order.
Are there any comments on Article XX - "Consultation"?
Are there any objections to the inclusion of this Article?
The inclusion of this article is agreed.
Are there any comments on Article XXI - "Nullification or
Impairment"?
MR. J.P.D. JOHNSEN (New Zealand): Mr. Chairman, I notice in
the first paragraph there is a reference to the "accompanying
Protocol". Presumably we will have to come back to that after it
has been determined what the Protocol is going to be.
CHAIRMAN: The Delegate of New Zealand is quite right in
pointing this out because there have now been more than one Protocol,
and somewhere or other it will have to be identified with this.
It is, of course, that referring to the principles of the Charter.
with
I think that that is a drafting point/which we will be able to
catch up when we come to deal with the Protocol.
Are there any other comments?
Are there any objections to the inclusion of this Article?
The inclusion of Article XXI is approved. 27
J. E/PC/T/TAC/PV/11
We now come to part III, of the General Agreement on Tariffs
and Trade.
Article XXII - "Territorial Application - Frontier Traffic -
Customs Unions".
I will draw the attention of Members of the Committee to the
comments on page 4 of document E/PC/T/W/3l2.
the Australian Delegation in document E/PC/T/W/277 suggests
that this Article be transferred to Part II of the Agreement.
The Czechoslovak Delegation in document. E/PC/T/W/285 suggests
that paragraphs 3, 4 and 6 be deleted.
The Australian Delegation suggests that the opening words of
paragraph 3(b) be revised to read: "No contracting party shall
put into operation"in the place of the words: "We contracting
party shall initiate". This suggestion is also found in document
E/PC/T/W/277.
I think it would be best if we first of all deal with the
Australian proposal to transfer this Article to Part II.
Mr. J. FLETCHER (Australia): It is the view of the Australian
Delegation, Mr. Chairman, that the bulk of this Article is new
material and is not material that is ordinarily met with in a trade
agreement. It is true that in most trade agreements you have a
provision excepting priviledges given to customs unions and to
frontier traffic from the general provisions of the agreement, and
so far as those two points are concerned. we have no objection to
their inclusion in Part III, but we do feel that the remainder of
the Article applies to new material that appropriately belongs to
Part II and not to Part III. 28 J.
E/PC/T/TAC/PV/11
CHAIRMAN: The Delegate of the United States.
MR. W. BROWN (United States): Mr. Chairman, we agree in part
with the suggestion of the Australian Delegate. It seems to us
that paragraph 1 of Article XXII properly belongs to Part III, that
is, the tTerritorial Application of the Agreement. We also feel
that paragraph 2(a) and the first part of paragraph 2(b) belong in
Part III, since they are usual trade agreement clauses, the only new
matter being the reference to the interim Agreement. That
certainly should be in the Trade Agreement and, in part, it seems to
us that it fits more logically in this Article in Part III than it
would in Part II, since it is directly related to the matter of
territorial Application and the matter of Customs Unions.
As far as paragraphs 4 and 5, which contemplate the possibility
of new preferential arrangements relating to programmes of economic
development, is concerned, we rather feel that the Australian
suggestion has merit and that it would be more logical to have
paragraphs 4 and 5 as part of Article XVII than as part of
Article XXII, since they relate directly to matters of economic
development. 29
S E/PC/T/TAC/PV/11
CHAIRMAN: Does the comment made by the United States
Delegate meet the wishes of the Austrelian Delegate?
Mr. FLETCHER (Australia): As regards Paragraph 1
of Article XXII, I think the matter of its inclusion in Part
III of the Agreement as distinct from Part II depends a good
deal on whether we fit it in with Article III. I think it
ties in with Article I.
Mr. Winthrop G. BROWN (United States): Mr. Chairman,
I am afraid I do not understand the point made by the Delegate
of Australia.
Mr. FLETCHER (Australia): The point is that Paragraph
1 of Article XXII Does affect preferential arrangements as
between Australia and hor territories and there are questions
revolving round Article III which affect those same terri-
tories. That would call for adjustments in our legislation
if we have to adopt either Article III in its entirety or
Paragraph 1 of Article XXII.
It is evident from the wording of this that this does
affect the obligations of the parent country towards a territory
to which it is granting preferences and other so-called forms
of discriminatory treatment.
CHAIRMAN: Is not the point covered by Annex A, which
lists the Dependent Territories of the Commonwealth of
Australia?
Mr. FLETCHER (Australia):
It is all right so far as 30
S E /PC/T/TAC/PV/11
tariff preferences are concerned, but when we come to internal
taxes it is a different question.
Mr. SHACKLE (United Kingdom): Mr. Chairman, surely the
fact that Article III is already in Part II does convoy, does
it not, that it applies only insofar as it concerns existing legi-
slation, so that you already have your let-up by virtue of the
fact that Article III is in Part III. It does not mean that
you have also to transfer Article XXII to Part II. That would
cause some difficulty, because it is needed as part of the
definition of the effect of article I, which is in Part I.
Mr. Winthrop BROWN (United States): It seems to me, Mr.
Chairman, that the situation is exactly as Mr. Shackle has
described it.
Mr. SHACKLE (United Kingdom) : This is, in fact, a
definition Article really. It just says that, for purposes
of the application of, shall we say, Article I - General
Most-Favoured-Nation Treatment - each unit shall be a separate
customs territory.
Mr. FLETCHER (Australia): The effect of this is much more
than that of a Definition, to my mind. It really is to create
these territories, or to place these territories in the
position of a Member country. The nature of our arrangement
with these territories is rather peculiar. In addition to
tariff preferences, we even pay bounties on products produced
in the territories: that is one way of encouraging their
development. S 31 E/PC/T/TAC/PV/11
My objection to seeing this go into Part III is that
Part III requires immediate application of its provisions. In
article II, which goes into Part II, we do get an opportunity
to delay those adjustments. That is the reason why I think
its proper place is in Part II rather than Part III.
Mr. SHACKLE (United Kingdom): Mr. Chairman, the effect
of this paragraph, as I see it, is to say,what are the units
for the purpose of applying the obligations throughout this
Agreement For the purposes of Part I they will be the
unqualified obligations of Part I for which these units will
apply as such. For the purposes of Part II they will be the
qualified obligations of Part II.
Mr. FLETCHER (Australia): I feel constrained to ask.
is there any substantial reason why this should go in Part III
rather then Part II, seeing that the bulk of it is new
material?
CHAIRMAN: I think one reason would be that when Part
II is superseded by the provisions of the Charter there will
be no provision in the Charter corresponding to this Para-
graph 1.
Mr. Winthrop G. BROWN (United States): Well, Mr.
Chairman, as I understood the point made by the Delegate of
Australia, if Australia gave certain financial assistance to
the territories in question there would certainly be
nothing in any part of this Agreement which would prevent
that. In fact, at an earlier stage in our deliberations
the Head of the Austrlian Delegation called attention to the E/PC/T/TAC/PV/11
fact that there were some special relationships with one or
two of the territories near to Australia which may conflict
in some way with the provisions of the Charter or of the
Agreement. He was not disposed to make them a subject for
discussion, but he felt they were perfectly justified and he
was quite confidant that the Committee would concur in what
Australia was doing to assist those territories.
Mr. FLETCHER (Australia): May I suggest that we defer
consideration of this Paragraph 1, until we know the outcome
of the Czechoslovakian amendment to Paragraphs 3, 4 and 6
of this Article.
CHAIRMAN: We will therefore take up now the Czechoslovak
proposal, that Paragraphs 3, 4 and 6 of this Article be
deleted
Mr. SHACKLE (United Kingdom): Mr. Chairmen, I cannot
5
understand what Paragraph would be doing when Paragraph 4 has
disappeared. It seems to me that Paragraph 5 has no
raisin d'être once Paragraph 4 has disappeared.
Mr. Winthrop BROWN (United States): I think, Mr.
Chairman, the reference of the Czechslovak Delegation is to
the old draft and it is paragraphs 4, 5 and 6 of that draft
which are meant.
CHAIRMAN: The Delegate of Czechoslovakia.
H.E. Mr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman,
what we are proposing here to delete is for the following
reasons: we thought that we are making here an Agreement for
tariff reductions and not an Organization - an Organization
which may, in certain circumstances, have tremendous political
S
32 E/PC/T/TAC/PV/ 11
powers, because, as the matter stands, customs unions or other
preforential arrangements referred to in Paragraph 4 may have
an exceptional political importance. It may, for instance,
be Ansohluss, and we thought that Tariff Agreement should have
only such provisions as Mr. Brown mentioned, which are in all
normal commercial treaties.
Nothing we have here exceeds largely the normal commercial
treaty provisions but may have great political importance,
especially as, according to Paragraph 4, the Committee,
possibly by a simple majority, may decide on some such
arrangements as those proposed once between Mr. Bruning and
Mr. Seipel.
That is why we thought there should be no Organization,
especially as this Organization has no connection with the
Economic and Social Council or the United Nations. The
Committtee should have no powers of this kind; it should be
purely a treaty of customa and nothing more. Our comments and
our proposals are all directed from this point of view.
S
33 P. E/PC/T/TAC/PV/11
CHAIRMAN: Are there any comments on the proposal of the
Czechoslovakian Delegate?
The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, it seems
to me that in all commercial treaties it was stipulated that
when a Customs Union was established this meant a derogation
and a waiver of the most-favoured-nation clause. If in
commercial treaties such a clause was inserted, then it did not
mean that, before a Customs Union was to be established, the
States signing that commercial treaty were undersigning or
approving in advance the formation of such a Customs Union, if
one considered it from a political point of view. Dr.
Augenthaler referred to the question of the Anschluss but this
is a particular question, a special one.
I think that the Customs Unions, once they are formed, can
be considered from two points of view, and therefore we have
to mention it in the Charter not because of their political
repercussions, but because of their economic repercussions, that
is to say for instance the repercussions they have on Article I
of this Agreement which relates to the most-favoured-nation
clause. There is a definition in every commercial treaty, and
which we must have here, that is that a Customs Union means
obviously a derogation of the principle of the most-favoured-
nation clause. A Customs Union, if there is one, is obviously
a derogation of this clause.
It is possible of course that in this Tariffs and Trade
Agreement we are going somewhat further than is usually done
in the normal Trade Agreements, because we are here providing
for a preparatory period. I do not think however that we can
34 P. 35
say that, if the Members of the Committee decide, during a
preparatory period or after the formation of a Customs Union,
that the formation of such a Customs Union is a derogation of
the most-favoured-nation clause, they are going beyond their
terms of reference, that they are intruding in someone else's
field, or that they are working outside their own field, and
we certainly would not say they would be infringing on the
domain of the Economic and Social Council.
I think that bringing in here the intervention of the
Economic and Social Council is a new idea. If we consider
the Customs Union which was recently formed between Belgium,
the Netherlands and Luxemburg, we can see that these three
countries did not need the prior approval of the Economic
and Social Council before concluding their Customs Union and
if those three countries did not need the approval of the
Economic and Social Council I really do not see why any other
country should need the approval of the Economic and Social
Council in the future if they are to benefit by the
advantages of Article XXII of this Agreement.
One must distinguish between the two different aspects
of this question. One is the economic repercussions of
such a Customs Union and that is a question of fact which
can quite rightly be taken up by the Committee dealing with
the Trade Agreement, and the other question is the
political repercussions of such a Customs Union and there it
is for all the Members of the United Nations to take appropriate
action and bring the matter before any organization they think
fit to consider this question.
CHAIRMAN: Dr.Augenthaler.
E/PC / T/TAC/PV/11 E/PC/T/TAC/PV/11
Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I think
there is some misunderstanding between what I meant and what I
said, I have no objection against Customs Unions: we have no
objection against Customs Unions with the exception of the Customs
Union known under the Ansohluss. That is not what we are
objecting to. We are not objecting that there should be in a
Tariff agreement normal exception to the most-favoured-nation
clause in favour of Customs Unions. We have no objections against
that. We have this exception in all our existing commercial
treaties and we see no reason why such normal exception should not
be also in this Tariff Agreement.
What we object to is something else - that we are creating a
Committee with powers to approve or not to approve such Customs
Unions. That is why we did not ask or did not propose the
elimination of paragraphs 1 and 2 but we propose the deletion of
those paragraphs where the Committee approves or disapproves such
Unions.
Also I never said that some countries would need approval of
the Economic and Social Council of the United Nations to create or
not create Customs Unions, because of course in is not within the
competence of the Economic and Social Council. I said only that
we are giving here to some Committee for Tariffs powers such as to
approve or not to approve Customs Unions, especially as it is a
question of some Committee which is not even dependent on the
Economic and Social Council.
CHAIRMAN: The Delegate of the United States.
Mr. Winthrop BROWN (United States): Mr. Chairman, we entirely
agree with Dr. Augenthaler, that we do not desire here, we are not
attempting here, to set up an international organization in advance
P.
36 37 E/PC/T/TAC/PV/11
of the ITO. What we are doing in reference to the Committee in
this Agreement, and in Article XXIII which follows, is to provide
a mechanism - an orderly mechanism - for consultation between the
contracting parties where they can decide upon action which affects
them all and which they would want to take in their joint capacity.
Now, of course, in a bilateral agreement, there are always
provisions for consultation between the two parties and for their
Action together. In a multilateral agreement with a number of
parties those provisions must necessarily be somewhat more elaborate.
In this particular case there is no question of the Committee, the
contracting parties acting together, having any power to approve or
disapprove a Customs Union. What paragraph 3 contemplates is
simply that if a country which is a Member of this Agreement enters
into an arrangement with another country be it a Member or a non-
Member, which involves preferential arrangements which are not
consistent with its obligations under article I, and justifies that
departure from its obligations on the ground that it is a step
towards a Customs Union, then the contracting parties should have a
chance to have a look at those proposals and see whether they are
in fact as represented. And if the Committee, the parties acting
together, find that the proposals made by the country that is
making them will in fact lead towards a Customs Union in some
reasonable period of time, why they must approve it. They have no
power to object.
It is simply a mechanism foreseeing, if necessary, that some
Member does not find a way out of its obligations under paragraph 1
under the guise of entering into a Customs Union when it is really
not likely that a Customs Union will eventuate. It seems to us
that such an opportunity for a check by all teo signatories to this
Lgreement is a very reasonable and necessary oeo.
P. V 38 E/PC/T/TAC/PV/11
CHAIRMAN: Are there any other comments?
H.E. Dr. Z. AUGENTHALER (Czechoslovakia): May I camplete
my statement,by adding a few words? It is stated "This
Agreement shall supersede any prior international obligations",
and this applies also to existing commercial treaties. Now,
those already existing commercial treaties give us certain rights.
Supposing there should be a case covered by some provision of
this Article which is not covered by exist by commercial
treaties, and that a Government, for some reason, would like to
object because it conflicts with the commercial treaty. It
would be unable to do so , because it renounced, through the
Tariff agreement, the rights of the commercial treaties and
agreed that a simple majority or two-thirds majority should
decide whether something should be done or should not be done.
CHAIRMAN: Are there any comments?
M. F. Garcia OLDINI (Chile) (Interpretation): Mr.Chairman,
I will not speak on the same point. I am going to speak on
paragraph 4 of Article XXII. We are faced here with the same
difficulties as have already been mentioned and which derive
from the fact that these Articles are transferred to the
Agreement from the Charter -that is to say, they are transferred
to an Agreement from a text which has not yet been approved.
I am referring to the words in square brackets in the draft
of paragraph 4, which concerns the provisions relating to
voting. In the Charter, no decision was taken on that point, and
it was decided to defer this question to the Havana Conference.
It seems to me that if we now make a decision on the same point,
we shall pre-judge the issue which is to be teken up at the E/PC/T/TAC/PV/11
Havana Conference. Of course, one solution would be to
eliminate this point, but that is not a proper solution because
we cannot eliminate this question from the Agreement, as this
question relates closely to the substitution of the text of the
Charter for the text of the Agreement. I feel, as a number of
Delegates do, that we should adjourn the debate on paragraph 4
of this Article pending the decision of the Committee on the
provisions of Article XXVII of this Agreement, which relate to
the automatic substitution of the text of the Charter for the
text of the Agreement.
CHAIRMAN: The Delegate of India.
Mr. B.N. ADAKAR (India): Mr. Chairman, I do not see any
difficulty in eliminating paragraphs 4 and 5 altogether. It is
obviously impracticable to leave square brackets in the final
text of the agreement. On the other hand, if we seek to settle
this issue as to whether approval for regional preferential
arrangements should be granted by a two-thirds majority or by a
simple majority, we cannot possibly succeed. This matter was
left over to the World Conference and it is best left to that
Conference.
If we try to retain these two paragraphs and substitute
some other words for the words in square brackets, we can only
do that by making a reference to paragraph 6 of Article XXIII;
but that would not change the position - it would only prejudge
the issue by indicating that it was the view of the signatories
to the General Agreement that regional preferential arrangements
should be approved by a two-thirds majority. Nothing is to
be gained by retaining these two paragraphs.
V
39 40
If we delete these two paragraphs, we shall not be
prejudging the issue, and by retaining these paragraphs we shall,
not be improving position we would otherwise obtain.
I would therefore suggest that we should agree to the
deletion of these two paragraphs altogether. If that is done,
then until a separate provision on regional preferential
arrangements is incorporated into the General Agreement, approval
for such arrangements would have to be given under whatever
procedure is laid down in paragraph 6 of Article XXIII.
I would only add one point. It is at present contemplated
that Part II of the General Agreement should be substituted, in
due course, by the corresponding provisions of the Charter, and
since there is nothing at present in Part II on the subject of
regional preferential arrangements, it will have to be stated
somewhere that when the substitution of Part II by the corres-
ponding provisions of the Charter takes place, some specific
provision would be inserted, that is, Article 15 of the Charter
would find its place in Part II.
CHA.IRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I would
like to support the proposal that the just been made by the
Indian Delegate. It seems to me that the course he suggests,
namely, the dropping of paragraphs 4 and 5, is the only way to
avoid encroaching upon a question which we have already decided
to leave to the Havana Conference. It is, I think, the only way
out of that difficulty.
CHAIRMAN: The Delegate of the United States.
Mr. Winthrop BROWN (United States):
E/PC/T/TAC/PV/11
V
I would like also to E/PC/T/TAC/PV/11
support the suggestion of the Delegate of India.
H.E. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I also
support this proposal. I do not insist on the deletion of
paragraph 3, and as to paragraph 6, that was a mistake: it should
be paragraphs 3, 4, 5 and not 6.
Mr. C.H. CHEN (China): The Chinese Delegation also supports
this proposal of the deletion of these three paragraphs; but in
addition we suggest the deletion of paragraph 7, which seems to us
quito unnecessary.
CHAIRMAN: Are there any objections to the proposal of the
Delegate of India? The proposal of the Delegate of India to
suppress these paragraphs 4 and 5 appears to have the support of
the Committee. but I would ask that this decision be only a
tentative one, because the Delegate of Chile made the request that
the decision in regard to this matter should be held over until a
later occasion,-and unfortunatly he had to leave the Committee.
I think it would be only fair to him that we should leave it as a
tentative decision to be confirmed later.
Dr. Gustavo GUTIERREZ ( Cuba): Mr. Chairman, I was just going
to make the suggestion that we leave the final decision until the
Chilean Delegate can be present.
CHAIRMAN: Is that agreed? We will regard this as a tentative
decision, and we will take it up at a later occasion to be confirmed
when the Delegate of Chile is present. We can now deal with the
propose amendment to paragraph 3(b) suggested by the Australian
Delegation. It is to replace the word "institute" in the first
line of paragraph 3(b) by the words "put into operation", so that
V
41 42 E/PC/T/TAC/PV/11
paragraph 3(b) would read: "No contracting party shall put into
operation or maintain any interim agreement.." etc.
Are there any objections to this drafting change?
Mr. Winthrop BROWN (United States): Mr. Chairman, I think
the Australian suggestion was addressed to an earlier draft, in
which the word "initiate" appeared, rather than to the word
"institute" which now appears, and I wonder if this word
"institute" does not carry the same meaning as the words
suggested by the Delegate of Australia and therefore would be
satisfactory to him.
Dr. H.C. COOMBS (Australia): It is correct, Mr. Chairman,
that our amendment was directed to an earlier draft which did
have the word "initiate". However, I feel that "put into
operation" is clearer - at least, I know what it means and I am
not sure that I know what "institute" means in this text.
V 43 E/PC/T/TAC/PV/11
J.
Dr. H. C. COOMBS (Australia): We entirely agree, Mr. Chairman ,
with Australian Delegate.
CHAIRMAN: I imagine there is no objection to this slight
modification to the text of the Chater.
Dr. H.C. COOMBS (Australia): I do not think I attach any
great importance to that, I think they are much about the same.
CHAIRMAN: Perhaps for the sake of uniformity between the
Charter and the Agreement we can let it remain as it is.
The only other point which we have to clear up is with regard
to Article XXII - i', is the Australian suggestion that paragraph 1
should be transferred from Part III to Part II.
Dr. H.C. COOMBS (Australia): Well, Mr. Chairman we think
that would be an improvement. We are concerned about this
Article because, like certain other Articles to which we have
referred, we are not entirely I of the nature and extent of
the obligation which we are accepting under it. Reference has
been made to the fac t that we have territories which are separate
customs territories, and paragraph 1 says tiat: "The rights and
obligation arising under this Agreement shall be deemed to be in
force between each and every territory, which is a separate customs
territory and in respect of which this Agreement has been accepted".
On the assumption that we would accept this Agreement both for
the Australian customs territory and territories of New Guinea and
Papua, that would mean that the rights of application in this
Agreement would not merely be between Australia and other participating
countries, but between New Guinea and Papua, and also between J.
Australia and New Guinea. "ow, quite frankly, I am not quite
sure what is implied by that. What would be involved in
applying the whole of the provisions of this Charter as between
Australia and New Guinea is just a problem to which we have not
given any thought at all, and it may involve legislative provisions
or it may not. Therefore, we consider that it would be preferable
if this Article were included amongst the section of the Agreement
where acceptance was not merely provisional, but was limited to
what could be done within existing legislative authority, or
whatever is the precise wording of the qualification of that
covering Part II.
Similarly, we have in Paragraph 7 undertaken that each
contracting party shall take such reasonable measures as may be
available to it. Well, I have great faith in the precise quality
of this word "reasonable", but we are a Federal State and some of
the matters covered by the various parts of this Agreement are the
exclusive concern of States which constitute our Federation, and
whether it would be sufficient protection to say that it would not
be reasonable to put any sort of pressure on those States to make
changes in their practices in order to conform to this Agreement
while it was in its provisional stage, I would not know for certain,
but, while any doubt exists, it does seem to me that it would be
safer to put this in Part lI in order that we would be protected
there also.
Furthermore, there does seem to me to be a good deal in this
Article which is not properly described as territorial application.
The provisions relating to Customs Unions and means by which they
might be established and the limitations there to do appear to me to
E/PC /T/TAC /PV/1 1
44 E/PC/T/TAC/PV/11
J.
be substantive provisions of the Agreement, while identical in
character to those which a present form the substance of Part II.
If this article were one exclusively designed to describe the
territories to which the provisions of the Agreement would apply,
there would be much less objection to its being here.
So, Mr.Chairman, for those three reasons --firstly, because
this may involve us in obligations with regard to the relationships
between Australia and its various territories which are separate
customs territories, because it may involve us in action taken in
relation to the States which constitute the Federation or
Commonwealth of Australia, and because it containe provisions
essentially similar in character to other Articles included in
Part II, we think there is something to be gained by putting this
in there.
Mr .R.J. SHACKLE (United Kingdom): Mr. Chairman, I apologise
for repeating such arguments as we have used already, but I must say
that I am still not clear as to what the effect of making this
change would be, nor I am I convinced of its necessity.
The way the matter appears to me is this: This paragraph 1 of
Article XXII does not lay down any substantive obligations at all.
It is really a definition Article. ll now, if that is so, I
really do lot see quite what the effect of transferring this
paragraph to Part II would be. On the face of it, it would
introduce the qualification that this is not consistent with
existing law, but I do not see that it would have any meaning -
either these are separate customs territories or they are not - so
the qualification that this is not consistent with existing law seems
to be irrelevant to this paragraph.
45 46
It seems to me that where the relevance does come in is in
relation to Articles of substantive obligation, of which, of course,
Article III is one, which sets up substantive obligations on
national treatment as regards internal taxation and regulation, and
I should have felt that, insofar as there might be any question as
to whether the regime between Australia and these territories was
consistent with Article III or not, it would be covered at present
by the qualification that it is not consistent with existing law.
There may possibly be some question of Article I - and I am under
the impression that Dr. Coombs has mentioned that before - but
I thought that it was left that the facts would be communcated to
the Committee.
So, for those reasons, it does seem to me that it would be
motiveless to change this paragraph and I think it would be
better to leave it here. I do not think it could possible affect
the substance as regards the questions in which Dr. Coombs is
interested. That is how it appears to me.
CHAIRMAN: Are there any other comments?
The Australian Delegate mentioned that, in connection with
Article I, the Australian Delegation had not had time to fully study
the implications of this particular paragraph, that is, paragraph 1
of Article XXII, so perhaps the best thing would be for us to leave
the Australian proposal over until we can confirm the tentative
decision which we took with regard to paragraphs 4 and 5. We can
then deal with the whole Article. Is that agreed?
Well, we will therefore leave over Article XXII and return to it
when we take up the question of the deletion of paragraphs 4 and 5.
E/PC/T/TAC/PV/11
J. S 47 E/PC/T/TAC/PV/11
CHAIRMAN: We still hove some time left; I therefore
suggest we take up article XXIII - Joint Action n by the Contracting
Parties. There are a great number of amendments to this article,
which will be found on Pages 4 and 5 of Document W/312. I think,
therefore, the best way in which to proceed is to take up this
Article paragraph by paragraph.
Mr. Winthrop BROWN (United States): Mr. Chairman, my
Delegation has been giving some thought to this Paragraph,
particularly in view of the blanks which it now contains, and we
are prepared with some suggestions as to how those blanks should
be filled in. The document is being circulated this evening
and should be on the desks of all Delegates first thing in the
morning.
I hope it would be helpful to the Committee to have a
specific suggestion as to the texts of paragraphs 4, 5 and 6, which
are now blank, in their consideration of the Article as a whole.
Since that could be available first thing in the morning, perhaps
it might expedite the general work if our suggestions were before
the Committee, as well as those contained in Document W/312.
CHAIRMAN: In view of the statement by the United States
Delegate, I think it might be better to terminate our work today
and take up this article as the first thing at our next meeting.
Mr. SHACKLE (United Kingdom): Mr. Chairman, before we
break up, might I raise a point. It affects Article 24,
particularly Paragraph 3(b), and Article 28. Those two
paragraphs concern the status which territories would have which
adhered to this General Agreement but were themselves not S 4 8 E/PC/T/TAC/PV/11
independent sovereign States but were autonomous in matters
covered by the Agreement.
I refer to Burma and Southern Rhodesia. The point affects
them very much. It is a question of their Membership and I
would like to ask whether the Committee would agree that
representatives of Burma and Southern Rhodesia, who are here
in Geneva at the moment as advisers to our Delegation, might
be allowed to be heard when these paragraphs are under dis-
cussion.
I think it would be Articles 24 and 28 particularly -
probably the whole of those Articles - on which they would wish
to be heard.
CHAIRMAN: The Delegate of Czeohoslovakia.
H.E. Mr. Z. AUGENTHALER (Czechoslovakia): Mr . Chairman, I
would like to propose that we should meet the representatives of
Burma and Southern Rhodesia when we discuss these Articles.
CHAIRMAN: It has been proposed by the United Kingdom
Delegate, seconded by the Delegate of Czechoslovakia, that, when
we are discussing Articles 24 and 28, representatives of Burma
and Southern Rhodesia should be admitted to take part in the
discussions. Are there any objections to this proposal?
(Agreed).
Mr. SHACKLE (United Kingdom): I wish to thank Mr. Augen-
thaler for his support and the Committee for agreeing to the
suggestion.
CHAIRMAN: I would now like to take the sense of the
Committee as to what time we should meet tomorrow. I think it E/PC/T/TAC/PV/11
is very necessary that we meet on Saturday, because we have to
get through this work before September 14, after which we shall
no longer have the services of the Irterpretors.
I would propose that we meet tomorrow morning at 10.30.
There is a meeting scheduled for the Sub-committee on
Paragraph 3 of article II also at 10.30 tomorrow morning, but I
trust it will be possible for Delegations, to send representatives
to this Committee and to the Sub-committee if they are held
at one and the same time.
Mr. SHACKLE (United Kingdom ) Mr.
Chairman, I know that meetings on Saturday afternoons are
unpopular, but I am afraid there is really nobody who could
understudy me on the Sub-committee. Therefore I can only
suggest we have the sub-committee meeting in the afternoon.
CHAIRMAN: I think this Committee has priority over the
Sub-committee and therefore I think it will be necessary for us
to ask the Sub-committee to meet in the afternoon.
Mr. SHACKLE (United Kingdom): I apologise to Members of
the Sub-committee.
CHAIRMAN: We will meet tomorrow at 10.30 a.m. in this room.
The Meeting is adjourned.
The Meeting rose at 6.p.m.
S
49 |
GATT Library | pf211sx0402 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Fifteenth Meeting of Commission A held on Friday, 20 June 1947 at 2.30 p.m | United Nations Economic and Social Council, June 20, 1947 | United Nations. Economic and Social Council | 20/06/1947 | official documents | E/PC/T/A/PV/15 and E/PC/T/A/PV.13-15 | https://exhibits.stanford.edu/gatt/catalog/pf211sx0402 | pf211sx0402_90240101.xml | GATT_155 | 12,204 | 73,520 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/15
20 June 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
FIFTEENTH MEETING OF COMMISSION A
HELD ON FRIDAY, 20 JUNE 1947 AT 2.30 P.M.
M. MAX SUETENS (Chairman) (Belgium)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel.2247).
NATIONS UNIES 2
CHAIRMAN (Interpretation): Gentlemen, the meeting is called
to order.
I hope that today we will be in a position to have a combined
amendment presented by the Czechoslovakian and United States
delegations, amendments concerning Article 31. The draft, however,
is not quite completed yet and therefore we shall resume our
discussion at the point we left it yesterday. Yesterday, we
finished the discussion on paragraph 1 of Article 31. Today, we
shall begin the discussion on paragraph 2 of the same Article.
MR. J.A. MUNOZ (Chile): Mr. Chairman, with your permission,
before passing on to paragraph 2 of this Article, we would like to
refer briefly to a point raised yesterday by Mr. Shackle as regards
the words which have been introduced at the end of sub-paragraph (b),
namely "through public offers or bide or otherwise, shall afford
the enterprises of all Members" etc. Replying to Mr. Shackle, the
United States delegate explained that they did not provide that
"public offers or bids"was to represent the only means whereby a
Member might comply with this general provision and that the words
'or otherwise' were to take cars of the quite obvious fast that
business enterprises do not always do their business on the basis
of public offers or bids.
We ourselves had not raised this point because we interpreted
the words "or otherwise" to mean that any enterprise, whether
state-trading or not, if it sells or buys products on commercial
considerations, within the meaning of this term, cannot be obliged
to carry out its business transactions only through "public offers
or bids".
One simple example will illustrate our views, Supposing an
enterprise sells its products in the world markets, if such sales
J. J. 3 E/PC/T/A/PV/15
are bona fide in open competition with other producers, there is
absolutely no necessity that such offer should be made public or
that such enterprise should afford the enterprises of all Members
full opportunity to compete for participation in such sales.
The explanation given yesterday by Mr. Evans seems to confirm
our interpretation of this phrase, but we would like, Mr. Chairman,
to leave on record our views in this respect. - 4 -
CHAIRMAN (Interpretation): Under those circumstances,
Gentlemen, we can pass on to the consideration of paragraph 2.
I see that in the text of the Drafting Committee there are
words against which objections were raised by three Delegations.
The words are "for use in the production of goods for
sale". The Delegations of Chile, New Zealand and Czechoslovakia
formulated reservations against this sentence. The U.S.
Delegations maintained this text, but presented an Amendment which
bears on points of drafting but not on points of substance.
The Delegate who wants to take the floor on this subject.
Mr. MUNOZ (Chile): Mr. Chairman, we would have preferred
to delete these words, as we did not see quite what was the
object of them, but on second thoughts, and if the majority of
the Delegations wish to have them included, we would not press
our Amendment.
CHAIRMAN: The Delegate of Belgium.
Mr. DESCLEE (Belgium) (Interpretation): Mr. Chairman, we would
be in favour of retaining the words between brackets.
Since the influence of the State is possible, we believe
that the provisions of paragraph 1 should not be limited to
imports for re-sale purposes, but also be expanded to imports
for production which finally also leads to re-sale.
CHAIRMAN: (Interpretation) Are there any more speakers on
the subject?
Mr. BAYER (Czechoslovakia): Mr. Chairman, we have submitted
here in Geneva a document W/187 covering the text which would be
proposed for Article 31, and it can be seen from this text, in
E/PC/T/A/PV/15 G - 5 - E/PC/T/A/PV/15
paragraph 2, that we have changed some words of the text from
our reservation made in New York; and I would therefore
consider this text in this paper as the one we are proposing.
Thank you.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. SHH: C:LE (United Kingdom): On looking at the
Czechoslovak Amendment, while retaining the words "for use in
the production of goods for sale", it nevertheless deletes the
words "for re-sale". I find that a little hard to understand,
and should like to ask the Czechoslovak Delegate why he wishes
to omit the words "for re-sale"."
Mr. BAYER (Czechoslovakia): If I understand properly the
question raised by the United Kingdom Delegate, the point is
why we changed the word "re-sale" into "sale".
I would say that we had no specific reason for this and
we would be able to accept "re-sale" as well I V 6 - E/PC/T/A/PV/15
CHAIRMAN: The Delegate of the United States.
Mr. John W. EVANS (United States): Mr. Chairman, I
should like to support the feeling expressed by the Belgian
Delegate that the words "or for use in the production of goods
for re-sale" are very important, and we feel that they should
be retained. We Are not very proud of our own amendment
to this paragraph, and, in fact, we think that the general
approach of the Czechoslovak amendment is probably better,
and if that amendment could be so corrected as to include both
the thought of goods for re-sale and goods for use in the
production of goods for sale, we should probably be quite
happy with it, and at least be very glad to have it used as
basis for work in the sub-Committee.
CHAIRMAN: The Delegate of New Zealand.
Mr. L.C. WEBB (New Zealand): Mr. Chairman, I wish
to refer to the comment of the United States Delegation which
appears at the top of page 5 of E/PC/T/W/198. The comment
is "These changes are intended to express more simply and in
fewer words the intent of the London draft. Except for
the removal of the brackets from that draft, these changes
do not affect the substance of the paragraph".
Now, Mr. Chairman, I was not involved in the New Yark
drafting; but I have been informed that these words in
brackets in paragraph 2 were, in fact, added in New York at
the suggestion of the United States. They were not agreed to:
they were in square brackets because the matter was not there
fully dealt with. I understand also that, in fact, those
words were not put in the London Draft. That is a point which V - 7 - E/PC/T/A/PV/15
I would like the United States Delegate to clarify.
Our reservation was made because we find it extraordinarily
hard to understand the preciss implications of the terms "or
for use in the porudaction of goods for sale". Our own experience
makes it difficult to understand those words. For instance,
does it apply to the production say of hydro-electricity for
sale, and we have in our own economy some rather complicated
procedures which would be very difficult to interpret in the
light of such a phrase. For example, take the case where the
Government may purchaso certain materials for the production of
houses, and may dispose of that material to housing contractors
who build houses for the State these houses being rented. That
sort of operation is extraordinarily difficult, I think, to
bring within the ccmpass of the phrase "or for use in the pro-
duction of goods for sale". I have no doubt that some of these
difficulties may be ironed out at the sab-Committee stage; but
I just want to make clear why we have made the reservation.
CHAIRMAN: The Delegate of the United States.
Mr. John W. E. EVANS (United States): Mr. Chairman, I
want to thank the New Zealand Delegate for calling my attention
to what was an error in the comment to the United States
proposed amendment. It should have read "These changes are
intended to express more simply and in fewer the words the
intent of the New York draft".
I think that there is no difference at all between the New
Zealand Delegation and rceleves as to want we want to cover by
the words "for use in the Production of goods for sale". We
have always understood, and I understand that it was generally
agreed in London, that the words were not intended to cover the
production of services, such as the production of electric power.
That does not completed answer oms raised by the
New Zealand Delegate; but Ifeel sure that ww can retain the intent
of this wording and still take case of those difficult cases
where it does not exactly fit by some work in the sub-Committee. - 8 -
It. DESCLEE (Belgium) (Intepretation): Mr. Chairman, I believe
there were some mistakes in the text drafted in London, and if we
look at the comments made at the London Conference, we shall see
that the only aim was to establish a distinction between government
purchased goods for trade and government purchased goods for the use
of the considered government. The text of the London Conference,
Section E, subparagraph (v) reads: "A distinction was made as between
governmental purchases for resale, which are covered by this
paragraph, and purchases for governmental use and not for resale..."
Therefore, I think we should revert to the idea expressed at the
London Conference on this subject.
CHAIRMAN (Interpretation): I think we can pass on to
paragraph 3. As regards pararaph 3, we have two alternative texts
for (A) and (B). We have three proposals and only one suggests to
amalgamate the alterations under (A) and (B) into one text. The
proposals are respectively made by the representatives of Belgium,
China and Chile, and there is a proposal by the delegate of
Czechoslovakia to delete the two alternatives.
I will call upon the delegates that have made these proposals,
commencing with the delegate for Belgium.
M. DESCLEE (Belgium) (Interpretation): Mr. Chairman, I would
begin by making a short remark on the text itself. The English
text does not indicate absolutely our intentions. The text which
I am going to quote reflects exactly and accurately the intention of
my delegation: "This Article shall apply when a Member government,
directly or indirectly ......... exercises effective control or
management of enterprises, organs or agencies or of their trading
operations only ......" We do not insist on the exact wording, byt
E/PC/T/A/PV/15 ER
-9- E/PC/T/A/PV/15
but rather on the ideas to be clearly expressed, as we wish them
to be. The debate which took place since yesterday, has shown
that state trade shows differences as regards special rules on this
matter, and the difficulty of establishing these special rules,
and even if it is practical to grant a special treatment to state
trade, I think there will be a serious difficulty in applying the
principles of the Charter to that case. S - 10 - E/PC/T/A/PV/15
While the Charter is based on a competitive system, the very
existence of a monopoly creates difficulty in the supervising
of the international competition. For a State enterprise a
second difficulty is added to the situation provided for in
Chapter VI, in that the state has, directly or indirectly, a
means of control.
The Delegate of New Zealand yesterday explained very
brilliantly the interest of the use of such controls for a
national economy, but their use by a Government shows that it
is possible for it to engage a national economy in ways different
from those provided for by the Charter, to give more emphasis
to national interests. If these methods of control are legiti-
mate and even - I do not want to stress it - perhaps advisable,
I think that on the international plane we would not be able to
know how a controlled economy will function in practice whenever
a State, whether by legal measures or in fact, alters the
competitive system by means of the special control, and we have
then to establish a procedure in Article 31 or Article 32 in
order to be able to cover all the operations related to the
enterprises concerned.
For this purpose I think it will often be difficult for
either the plaintiff or the Organization itself to prove that
certain controls have altered the free competitive system and
therefore we should not limit too much the field of application
of Article 31. We should not limit it to one or other obvious
cases but we should make the application of this Article in such
a way as to cover all controls, whether they are the result of a
legal text or whether they are merely in fact. S - 11 - E/PC/T/A/PV/15
CHAIRMAN (Iaterpretation): The Delegate of France.
M. IGONET (France) (Interpretation): Mr. Chairman, it
seems that the statement just made by the Delegate for Belgium
indicates some confusion between the categories of enterprises
mentioned in Articles 31 and 32 respectively.
In Paragraph 1 of Article 31 we see an exact definition
by the fact that it is mentioned at the top of Page 28: "If
any Member establishes or maintains a State enterprise ..... or
if any Member grants exclusive or special privileges", and
these privileges can, of course, be granted not only to State
enterprises but also to private enterprises.
To mention the case of France, we have a law which we
call the Law of Programmes, which enables the Government to
impose on some branches of industry or some enterprises a
programs to manufacture a certain quality of goods, and this
can be considered as a law placed upon the enterprise but also
as a privilege, as it implies a specialization which consti-
tues a kind of privilege in and for the production of certain
goods.
Therefore, if we applied Article 31 literally, it might
be considered as applying to this case, but, in fact, this is
in no way a monopoly; it is only an imposition of a Government
programme, but that is done entirely to a private enterprise,
which, nevertheless, remains absolutely private. Should such
an enterprise be submitted to all the rules of Article 31?
I should say "No", because, as I said before, it remains a
private enterprise and is, to some extent, a victim of its
Government, in that it is forced to execute a given programme.
I think we must not, in Article 31, think of the case of
a monopoly, which is the object of Article 32, although a
monopoly is a special case of a privileged enterrprise. I
think Article 31 has a much more general application and is
different from that mentioned by the delegate for Belgium - 12 -
E/PC/T/A/PV/15
M. DESOLEE (Belgium) (Interpretation): First of all, Mr.
Chairman, my amendment and my statement only applied to Article 31.
Secnudly, as to the example given by the delegate for France,
I think if a Government imposes a certain manufacturing programme
it may be a sort of disoriminatory order, because they may specify
the exact kind and nature of the material and goods to be obtained
which enter into that manufacture. In that case it may be imposs-
ible for the enterprise cooncerned to purchase goods in a certain
country. It would therefore be a discrimination which, however,
will not result in difficulties for the enterprise but as it is
a governmental Act it would come under the application of Article
15, section A of the Charter. If, on the other hand, this is done
not by law but by control, and some discrimination is made without
any commercial aid, then the enterprise would be penalised according
to Article 31.
M.C.IGONET (France) (Interpretation): I understood that in his
first statement the Belgian delegate insisted on the consequences of
the monopoly. Therefore, I :n.ide my remarks because monopol--. are
dealt with in Lrticle 32.
To revert to the example I Pave a moment ago, it is a fact that If _
Government by virtue of a general law imposes a programme, it implies
naturally a specification of the material in kind, quality and quantity.
This does not mean the enterprise is obliged to supply itself iln a given
country. It will. be able to choose its source of supply. If, how-
ever, it is understood that Article 31 applies to that enterprise, the
remark I made yesterday that the application to a Stste enterprise
should be of the same nature as that for any private enterprise applies
even more strongly. Therefore, the rule of non-discrimination men-
tioned in Article 31 should not necessarily apply to private enterprise.
It would be bettor not to mention a rule of non-discrimination in - 13 - E/PC/T/A/PV/15
Article 31 and to confin ourselves to making a statement saying
that enterprises receiving a special privilege should always be
considered as private enterprises.
CHAIRMAN (Interpretation): I think we can pursue this debate
in sub-committee, and will ask the other delegates who have amend-
mants to propose to take the floor; they are the delegates of China,
Chile and Czechoslovakia.
Dr. T.T. CHANG (China): It is not so much a matter of inclusion
in the ageanda as one of custom. We prefer alternative B. to alterna-
tive A, because our understand of the wording in alternative B is
that privileges granted to enterprises may be withdrawn, and yet a
Government will legally be able to exercise control.
In alternative B we propose an amendment to insert the word
"member" before the word "Government."
M. J.A. MUNOZ (China): There is little that I can add, as this
moment, to the comments which appear in Document W/192, which explains
the reasons for requesting an addition to this sub-paragraph, whose
object is to define to what enterprises Article 31 shall be applied.
Our amendmert is not a modification of substance, it is merely a
clarification which we feel is necessary for the smooth working of the
Charter.
I would, however, like to madke a few additional remarks and, i
with your permission cite a concret ..z:.1 i in order to explain our
position in regard to this Article.
As my fellow delegates will know, Chile is the only producer and
exporter of Natural Nitrate of S-,da. This is one of the principal
industries of my country. E/PC/T/A/PV/15
The sales of this product, by virtue of a very special Law of
the Republic, are made exclusively through a Corporation, called
Corporation de Ventas de Salitre y Yodo de Chile, created by this
Law. The Chilean Government has not subscribed any capital to it,
but as it is a basic industry of the country, whose national
economy largely depends on the degree of prosperity of that
industry, the Government exercises over it a certain measure of
control, which in no way is total or absolute. This Corporation
also receives from the Government certain special privilegs - not
to export or produce - but in recognition of a percentage of its
Profits. The external sales of this Corporation are influenced
solely by commercial considerations, as in order to place its
product in the different world markets it must meet an acute
competition from synthetic products, and thus it fixes its .S
sales prices according to the conditions of supply and demand in
each market, in other words, in the same way that any private
company would act. Can a Corporation, such as I have briefly
described just now, be considered as a State Enterprise for the
effects of Article 31? We feel that it is impossible to so consider
it, when the Laws of its own country do not. However, by the
present wording of paragraph b, it could well be considered as a
State Enterprise inasmuch as it does receive certain privileges
from the Government, and the Government exercises a certain measure
of control over it. It is for this reason that we are very
interested in clarifying the exact meaning of this paragraph.
We interpret the words "effective control" as meaning a total
and absolute control over the commercial activities of an
enterprise, and that is why we have not made any comment on this
expression. If this is not its true significane, we would very
much like to see this point more full discussed, either by this
- 14 -
JT. E/PC/ T/A/PV/15
Commission or by the sub-committee.
It could be argued that such a Corporation as I have just
described has nothing to fear from the provisions of Article 31, if
its external sales are guided by commercial considerations. But we
do not think this is enough, and that it is necessary to find a
more appropriate wording to paragraph 3, which will leave no doubt
anybody's mind as to what is, or what is not, a State Trading
Enterprise.
To sum up, Mr. Chaorman, our Delegation is of the opinion that
a State Trading Enterprise should be considered as such only when a
Member Government participates in more than 50% of its capital, and
therefore is in a position to control its commercial activities
absolutely.
If a Member Government does not participate with any capital in
such enterprises, and does not exercise absolute control over it,
even though it receive certain special or exclusive privileges as
recognition of a participation in the profits of the said enterprise,
then such an enterprise cannot be considered as a State Trading
Enterprise. ~.-
CHAI1iL& (Interpretation): The delegate for Czechoslovukia.
H.a M z. AUGTTHALER (Czechoslovakia): r. Chairman, I am
afraidbwe are not so lacky about definitions. When we were
studying this Article, we had the feeling that the definite on of
St-te Enterprise is alrendy at the beginning of Article 31, a-d so
we had t3e feeling that veeneed no paragraph b at all, nor do wo
need the Alternative A and B.
I admit that one day there may be some cases which would not
exactly fit into it. If we try to define anything which may
happen in ten or twenty or a hundred years, we could sit here as
J.
- 15 - J. -16- E/PC/T/A/PV/15
long. So, we thought that it would be better to delete entirely
paragraph 3, and I think that our American colleagues were more or
less of the same opinion.
We will have ITO and they will always have the opportunity to
decide if there are certain cases where somebody will say "It is
a State Enterprise" and we will say "It is not". It will be the
Executive Board or the meetings of the ITO that will decide
afterwards. I thank you. G.
CHAIRMAN: The Delegate of the United States.
Mr. EVANS (United States): Mr. Chairman, in view of our
state, preference for alternative (B) I should like to speak not
to the wording of the various Amendments that have been submit;
-ed, but to the substance of what the United states thinks is
required in this Article.
As we understand it its purpose is to cover those cases
where a Government has in effect created an agency which may or
may not be a State enterprise as popularly understood.
If the Government, through the exercise of its internal
power, can set up any kind of enterprise, whether it is
labelled State enterprise or private enterprise, whose operations
in effect would make the provisions of other parts of Chapter V
inoperative, in our opinion the State concerned has an
obligation to see that the operations of that enterprise are
carried out in conformity with the provisions of Article 31.
In the cases which have been mentioned by the French Delegate
and the Chilean Delegate, where an enterprise is in fact
carrying out its external operations according to commercial
principles, they surely have nothing to worry about if such
enterprises are defined as coming within this Article.
If they do not carry out their operations in that way,
there is and should be (we believe there is in another part of
this Article) an obligation on the part of the State to see that
they do promote the provisions of Article 31.
I think that there is a good deal of merit in the suggestion
of the Czech Delegate that paragraph 3 be omitted, if the
wording of Article 31 clearly indicates that the Member has an
obligation to see that the enterprises which are mentioned in
that Article - either State enterprises or monopolies created
by the State - are carrying out the provisions of the Article.
-17-
E/PC/T/A/PV/15. G.
- 18 -
E/PC/T/A/PV/15.
CHAIRMAN: The Delegate of Canada:
Mr. DEUTSCH (Canada): Mr. Chairman, like the Member
for Czechoslovakia, I also have some doubt whether it is
necessary here to have an Article defining a State enterprise,
because in paragraph 1 we say that either a State enterprise,
or any other enterprise that imports, produces, etc., must
adhere to the rule of non-discrimination. Well, in our
general structure here we place enterprise either in the one
category or the other. they are either State enterprises or
they are not. In either case they must follow the rule of non-
discrimination, so it does not seem necessary to define what
the State enterprise is, because in any case it must, if it
is not a State enterprise, follow these rules; so unless we can
easily find a definition I do not think there is much to be
gained by trying to establish one.
CHAIRMAN: The Delegate of Chile.
Mr. MUNOZ (Chile): Mr. Chairman, I find myself, without
wishing to pronounce myself at this present moment, in certain
sympathy with the suggestion of the Czechoslovak and U.S.
Dlelegates, and I also agree with the Canadian Delegation, that
the exact definition of a State enterprise is going to be very,
very difficult to find.
Perhaps you Could find a happy solution by dropping this
paragraph 3 if it would meet the case.
I think it is not a bad suggestion at all, but one which
could be considered by the Sub-Committee.
CHAIRMAN: The Delegate of South Africa. - 19 -
Mr. HOLLOWAY (South Africa): Mr. Chairman, I think we must
ask ourselves if we are to have a definition at all what the
purpose is.
We attempt to lay down in this Article that State enterprise
to be defined - must follow the rule of non-discrimination.
I do not think we say that anywhere about private
enterprise. That for two reasons. The one is that Members
are States, and not privatee people; and secondly, I do not
know how anybody is going to prevent, let us say, a cigar-
importing firm in the Union of South Africa from preferring to
import cigars from Jamaice rather than Cuba; even if the Cuban
cigars are better and cheaper, just simply because it prefers to
do that. How are you to stop it? Can anybody here on behalf of
his Government undertake to do that? It would be to our mind
perfectly silly to stop it, and we do not attempt to stop it.
We assume that is private business people will be guided
by ordinary commercial considerations, and therefore we do
not consider it necessary to make a rule. The position, however
becomes some what different when it is a State enterprise, because
after all a State is influenced in quite a large proportion of
cases by commercial and non-commercial considerations, and most
States, in the nature of the beast, are guided by non-commercial
considerations; and therefore there is some reason for making a
special rule for State enterprises. Now, we set about defining
State enterprises, and because it is a difficult thing, we do it
at various places.
We start in the very first lines of Article 31 by saying,
"If any Member establishes or maintains a state enterprise,
wherever located, vwhich imports, exports, purchases, sells, or
distributes any product". If we are not satisfied with that
group we take a State enterprise, which not only exports or
sells goods, but in addition to that "has exclusive or special
privileges".
Now I want you to imagine that if you add only the second
clause, it is a sufficient definition. V
- 20 -
E/PC/T/A/PV/15
But when we come to paragraph 3 we try to re-define those that
have exclusive or special privileges, but we have forgotten
the first lot altogether--the lotthathave got to be defined:
those which are created by the state, which can do business but
which have no exclusive or special privileges. There are
plenty of such Organisations--we have some in our own country
and I think most of you have them. Those are the people you
want to define under paragraph 3.
Now, in defining them - focus your attention on the word
"define", that is, put a limitation - do you want to put a
narrow limitation for the purpose which you have in view, or
do you want to put a wide limitation? If you require to put a
narrow limitation for the purpose you have in view, then, of
course, there must be some purpose to be served in cutting some
of them out, but obviously you want all those in that can be
influenced by the state to act in a way which is not a commercial
way, so that you do not want the most narrow limitation: you
want a rather wide limitation. On the other hand, you do not
want to make your limitation so wide that it includes
organizations which you cannot control.
Let us try and test some of these definitions by that.
The original New York Draft applies to any enterprise, organ
or agency in which there is effective control by a Member
government. Ask yourself immediately how much control and
what nature of control? You are allowed under the Charter
to maintain import control or exchange control. Is that the
sort of control that is intended here? It can be perfectly
effective, but it applies to a very large number of organizations
which go quite beyond what you intend.
An attempt to meet the difficulty has been made in
Alternative A, which does not speak only of control, but E/PC/T/A/PV/15
control over the trading operations; but, in the same way, the
control over the trading operations is carried out by your
exchange control or your import control. Alternative B
has the same thing, and both A and B define the second class,
those that have exclusive privileges, and do not define the
first class the only class which requires to be defined.
It seems to me, Mr. Chairman, that the control which
has got to be exercised in this Organization that is created
by the State is to be a control or a right of control over
the management,not the trading operations. "The trading
operations" is too wide a term. The Government must be
able to step in an say "You shall buy in Market A in
preference to Market B, because we want to remain on good
_ _ _ .-... .
terms with the "eople in Market A. Then you are introducing
a non-commercial element in it, so you must define them with
some regard to the management - to the ability to give an
order to the Or4anization as to how it shall buy, or if
necessary, how it shall sell. I think that is an essential
part.
The other point on which various drafts have been tried
is whether the Government shall exercise it, or whether it
shall have the right to exercise it. It seems to me that
it does not matter in the least whether the Minister in
charge of the particular operation does actually approve of
any particular opegation. The Oreanization may go
perfectly well, and carry out what that Government wants,
without placing commercial considerations first, without one
word of interference from the Minister. As the English
saying goes, "a nod is as good as a wink to a blind horse".
Algernatively, the Or-anization may be applying only commercial
considerations, and the Government of that country may want it
- ?-
V E/PC/T/A/PV/15
to apply only commercial considerations, and has no reason to
interfere so that actual interference is an accident: the
essential part is the right to interfere. It does not matter -
coming to the last point of the various definitions in which
there is an attempt to bring in words which may or may not be
necessary -it does not matter in the least for what reason the
Government has that right to interfere. It may have a
purely arbitrary right to interfere. Whether it is by virtue
of the special privileges or not by virtue of the special
privileges, or simply because that is the law of the country, it
is the right to interfere, the right to deviate away from
commercial considerations, which makes it essential to make a
special rule for the state trading operations; and so long as
you have got those points fixed, then it seems to me you are
covering all the definition, and I think that definition is
necessary to define these people who may act for non-commercial
reasons from those who would normally act for commercial reasons.
V.
- 22 - E/PC/T/A/PV/15
Mr. L.C.WEBB (New Zealand): Mr. Chairman, I just wish, on
the assumption that this is going to the Sub-Committee, to draw
attention to one point. We have no strong views as to whether or
not the definition of a state trading enterprise becomes a third
paragraph or is left to be dealt with in the first few lines,
though we think that probably your suggestion is quite a good one.
I would just like to point out that, in the London Draft, the
words in the definition on the first few lines of Article 31:
"and exercises effective control over the trading operations of
such enterprise" were put in square brackets after some discussion,
and in the New York Draft, the problem was solved by removing those
words down to the Alternative, so that the position is explained
quite fully on page 17 of the London Draft. I just wish to point
out that, if we are considering leaving state enterprises to be
defined in the first few lines, the Sub-Committee would necessarily
have to take into consideration the question as to whether those
lines in square brackets in the London Draft should go back again.
- 23 - E/PC/T/A/PV/15
CHAIRMAN (Interpretation): If no one else wishes to
speak, we can refer the matter to the Sub-committee.
We will pass on to Article 32 - "Expansion of trade by
State monopolies of individual products." On this Article we
have a set of amendments. We have a Czechoslovak amendment which
proposes various changes in the text of the Article, and we have
a United States amendment which proposes an alteration in the
text of Paragraphs 1 and 2 and the deletion of Paragraphs 3 and
4. We have a Netherlands amendment which proposes the addition
of a new paragraph. Finally we have a Chinese amendment,
which is of a much less radical nature.
I will give the floor in succession to the authors of
these amendments, beginning with the Delegate for Czecheslovakia.
H.E. Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman,
Gentlemen, when we are discussing this Article we are dealing
with an extremely difficult matter which is not at all clear.
As I have said already, the programmes today are not
clearly defined. For instance, when I have to deal with, say,
the United States, it is for me a scarce currency, so I cannot
buy more than I am able to earn by my exports into the United
States. New when I have only a limited sum at my disposal I
must, of course, have a list of priorities. I cannot say exactly
how much it will be; it will be dependent on the results of my
exports. If I were to try to buy more than I could afford, I
should be in the position of a private company trying to buy
more than its means allow it. Such a company would very soon
become bankrupt and maybe even incur some penal sanctions.
States are not generally expected to act on the same principles,
but they should do so.
S
- 24 - S
- 25 -
E/PC/T/A/PV/15.
In that case, I doubt whether there is any good reason
for adding detailed provisions regarding this Article, because
it may work only when the other conditions are quite different
from those we are experiencing today. Conditions may be
different in a few years - not as soon as we would like - but
still we do not know today what those conditions might be, and
that is why we thought it bettor to have a short general
provision.
Now I will come to some details which are in the Lundon
Draft. There are first some special provisions for export
monopolies. It may be only the case of a country which has
not only the home monopoly but which has a monopoly of the
world market, because otherwise this country tries to export,
and I do not see why this country should make some special
difficulties in regard to exports.
As regards the import side: we have thought very hard
about the programme of negotiated margins and we have found
that it is hardly possible. Let us take the following case:
suppose that I have some State monopoly for, say, wheat,
The Government would decide that I should pay some fixed price,
some stable price, to the producers, just to keep stable prices
and stable revenue to farmers. Let us say that this price
would be 400. When I am negotiating the margin it could be,
for instance, 30 per cent below the price. In this case I
would be negotiating with the supplier at a price of 240.
Possibly this price is not the world market price. I am
not acting according to commercial considerations. If I do
it with one country I may be discriminating against other
countries. S - 26 - E/PC/T/A/PV/15
If we take the opposite point of view, I should say I will
buy at the world market price plus, say, 30. So it would be
300 plus 30, which is 330. Then it would not always be the
same price; it would go up and down, and the whole policy of
a stable price will be destroyed.
If we take another aspect, we come to certain results
which are either contrary to the Charter or destroy entirely
the whole policy probably voted by the Parliament, That is
why we thought that, in general, negotiating the margin would
not be practicable. It is quite possible that we may
negotiate the total quantity of a commodity, but maybe there
are other possibilities too. That is why we thought it better
to leave in this Article only a very general definition and
to await future development, especially when there will be
no scarcity of free currency and when there will be no shortage
of certain commodities.
When we were proposing this change, it applied only to
Paragraphs 1, 2 and 3, but we even thought it touched
Paragraph 4. E/PC/T/A/PV/15
CHAIRMAN (Interpretation): Dues the United States delegate
wish to present his amendment?
Mr. JOHN W. EVANS (United States): The general purpose of the
United States amendment was to bring about more effectively than the
earlier draft the balance which we considered it was intended to
create between the obligations State Trading countries and the
obligations of countries who carry out nearly all their trade through
private enterprise.
The first paragraph in Article 31 really parallels the most-
favoured-nation principle. It was in our understanding of Article
32 and Article 33 that it would parallel the provisions in Chapter
V calling for negotiations in order to increase trade. Our analysis
of Article 32 fell somewhat short of that goal. In the first place.
the requirements for negotiation on protective margins on resale by
State oresated monopolies, while excellent in concept and we think
very practical in most oases, was too rigid to fit a number of situa-
tions in which we should like to negotiate with a country maintaining
such a monopoly.
The simplest example of that I have in mind is the case of
tobacco leaf imported by a monopoly which manufactures and sells
cigarettes. In the first place, the wording of the formula quite
clearly does not fit that case, because it refers to the resale price
of the imported commodity. It makes no allowance for the possi-
bility that the commodity may be mixed with another commodity, or
that it may go through certain processing. Even if that were taken
care of, we can visualise other situations where a State-owned com-
pany-which is, in effect, a monopoly on the importation of a particular
raw material - because it is a monopoly of the manufacture and domestic
sale of all the products made from that raw material - may be making
dozens or even hundreds of articles out of the raw material itself.
How we can negotiate marginal proferences under these circumstances
I do not know. Our purpose in this amendment was - without diluting
at all the obligation of countries which maintain such margins to
enter into negotiations - to create more flexibility, and the
possibility for a request to be made by the exporting countries along
other lines. J. - 28- E/PC/T/A/PV/15
One of those lines suggested is the local purchase commitment,
but because we were not sure that that would cover all the
remaining cases we also included a general provision for
negotiations of any other arrangement which would serve the purpose
which the exporting country considers desirable and which
would meet the purposes of the Article.
Now, that is the general concept behind our amendment , but
there are one or two more detailed remarks that I think might be
worth making. In the first place, it will be noticed that we have
retained the provision for the negotiation with respect to export
commodities. Mr. Augenthaler has raised a question as to whether
that is necessary. We believe that it is. There are elsewhere in
the Charter,provisions which require that countries which maintain
export taxes on raw materials -raw materials are not specified,
but export taxes - shall open those up to negotiation in the same
manner as import duties are negotiable. It seems that the
a
parallel of that situation, in the case of state monopoly or a state
trading country, is in negotiation for increasing the exportation of
the commodity concerned. It may be a raw material needed by the
manufacturing industries of other .countries; it may be that a
restriction on its export would have the effect of protecting the
manufacturing industry of the country in which the raw material is
produed provided it has anything like a monopoly. The purpose
of this provision, we think, is quite clearly to place such a.
country under- the same obligation as other countries when they
negotiate export dutios. . -
We flieved that mt..ollowged, fmen meur lenthy a dndsnt to
the-first-twoepAragcphs of t t ctiode, uhat.we.ooula q1ite*
properly 3 anp paragraphs4z3id par66raph '. In the case of
paragraph S, the purpose before, unde the vary rigid. formula for - 29 -
E/PC/T/A/PV/15
the negotiation of marginal mark-ups, was to assure that that
negotiation would really have the effect intended by the exporting
country which was carrying out the negotiation. Clearly, there
is no gain to the country so negotiating unless its product has,
as a result, been offered in the domestic market for a lower price
in unrestricted quantities. Otherwise, that lower price does not
increase its exports. In view of the more flexible provision for
the negotiation of those margins in our amendment it seems clear
that that is a provision which the exporting Member would himself
include, if it were necessary and desirable, in his individual
negotiation.
The fourth paragraph again appeared to us to be unnecessary in
view of the fact that these considerations mentioned in paragraph 4
are only some of the considerations which would necessarily enter
into any negotiation. There seems no more reason for specifying
hare that the revenue nature of the monopolies should be considered
in this negotiation, than to provide similarly that revenue tariffs
should be considered in a separate clause on negotiating tariffs,
nor does it seem to us to be necessary to add any other of the
numerous considerations which have been suggested for that paragraph. E/PC/T/A/PV/15
CHAIRMAN: The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom): Mr. Chairman, I should like
first to say I entirely agree with the observation made
yesterday by Dr. Augenthaler when he said State-trading should
not be regarded as a new form of proluotion.
It is, in fact, we think, as he said, just a new method of
trading.
On the other hand, we also agree with an observation made
yesterday by the Canadian Delegate that there must be some rules
to govern the activities of State-trading enterprises in mixed
economy countries - what is called 'single product monopoly' -
and that these rule s should be as closely analagous as possible
to the rules which were established elsewhere for private
trading.
Well, I would turn now to the United States Amendments to
paragraphs 1 and 2. What I am going to say, I think, applies
also in a considerable measure to the Amendments presented by
the Czechoslovak Delegation, although they are shorter and
simpler., but I think my remarks will equally apply to them - at
least, also, to a large extent. I would like to say in regard
to the United States Amendment that to us it seems a little
unfortunate that such very extensive Amendments should have
been presented to us at such a late stage.
We have had this scheme of negotiation of margins before
us ever since the London Conference, and the matter was very
carefully thought out there. These Amendments attempted in
way to merge the provisions of Article 33, which deals with
he complete State trading country, with those of Article 32,
which are meant to cover the mixed economy, or to give it its
alternative name, the single-product State-trading country.
Now we feel that this attempt to merge Article 33 with
Article 32, which is the result of bringing into Article 32
G. G - 31 - E/PC/T/A/PV/15
the concept of negotiating about quantities, will make for some
complication and considerable confusion.
It seems to us that there is an essential distinction
between the two Articles. Article 32, as I have said, is meant
to deal with the mixed type of economy, where only a limited
number of products are covered by State trading, and where
for the rest trade is carried on on a private basis. In a
country on that kind, considerations of costs and prices are
equally applicable to the State trader as to the private trader.
Article 33, on the other hand, as I have said, is meant to
deal with the complete State-trading economy, which is quite
different, because it seems to us that even for the goods of the
complete State-trading economy, the method of negotiating about
quantities seems a very doubtful way - we doubt whether it
would be at all suitable or feasible.
When one comes to apply to the single product type of
State-trading, if it were to involve, as the U. S. Amendment
seemed to have contemplated, a kind of global negotiation
between the State-trading country on the one hand and all the
other interested countries on the other, then it seems to us
that the procedure will be impossibly cumbrous, and we think
it is certain that it would never work.
Moreover, negotiations about quantities will have no
meaning, unless you also negotiate about prices. That point,
I think, is recognised in the Czechoslovak Amendment, which says
that in order to assure exports or imports of the monopolised
product at reasonable prices, these negotiations shall be
carried on. They are cases where you have to deal with prices
at the same time as you are dealing with quantities. G.
- 32 -
So what we should be involved in would be a series of
global negotiations with any of the interested countries to
cover the whole field of quantities and prices, and that we
are quite sure would be impracticable. If that would be the
method we followed here, to cover the case of the single-
product State trader, to form a counter-part for tariff
negotiations for private trade, then we think it is a foregone
conclusion this side of the negotiations will never be carried
through, and the Committee's work will, in fact, be frustrated
It also seems to us that even if such negotiations do
succeed or result in an undertaking by the State-trader to take
care of a particular commodity, then so long as the State-
trading country's external purchasing power is limited, the
effect would be that in proportion as it bought more of the
product about which negotiation had taken place, it would have
to buy less of other products. That, of course, would have to
apply particularly to competitive types of products. Let us
take an example. If the State trader were to undertake to
supply oil, we would have to buy less seed, and so on. If we
are to obtain useful results from this Conference, the
principle of the existing Draft of Article 32 must be maintained
That is to say, these negotiations should be as near as may
be to the exact parallell of the tariff negotiations under
.... ....,,thin
Article 24. In this way the negotiations would be kept within
manageable dimensions.
We have hears it argued that the methoC of negotiating
margins, as contemplates in Article 32, is impracticable in
cases where, for example, the State monopoly mixes products,
or prices of products, before selling to the home consumer.
We are not convinced that such cases present any insuperable
difficulty. If so, we will have to meet the difficulty when it
arisedraThe exAsting ir ft of _rticle 32 already makes
v or, AL n/, - 33 -
provision for such cases in its definition of import margins;
in paragraph 1 (1) it provides for due allowance to be made for
internal taxes, transportation, distribution and other
expenses incident to purchase, sale or further processing, and
for a reasonable margin of profit.
I would like to call special attention to the reference
to processing, and also for a reasonable margin of profit.
So it does seem to us that all these contingencies have been
provided for.
It may be said, indeed, that the data about costs and so
on which would be necessary to enable these allowances to be
calculated would be lacking; but we cannot believe that that
would be the case; for these are just ordinary elements of
commercial cost, for trading enterprises, whether State or
private enterprises.
A monopoly must know all about such things as the relative
cost of the various types of tobacco it makes, or the cost of
making tobacco up into cigarettes; or if it is a case of wheat,
the cost of milling the wheat.
The business will know the cost of such things, and it seems
to us that problem is simply one of accountancy. So it seems
if
to us that/there is the necessary willingness to disclose data,
it would be possible to observe the margins. V E/PC/T/A/PV/15
All state trading organizations would be prepared to produce
the necessary data, and we assume other government trading
organizations would similarly be willing.
Another argument which may be used, and has been used,
is that the variety of prices and fluctuations of price of
different parcels and consignments of an imported commodity
would be such as to make it impossible, under present-day
conditions, to observe the margins. We do not think that
this argument holds, because quite clearly it will be necessary
to allow for averaging between the prices of diffrent parcels
and different consignments. The last sentence of paragraph 1
of the Article does already provide that in applying a margin,
regard may be had to landed costs and selling prices of the
monopoly over recent periods. That covers averaging in time
and, incidentally, averaging in time will go a long way to
meet the difficulty about stablization to which Mr. Augenthaler
called attention. If you can average over a year or two,
that will do a great deal to flatten out the ups and downs and
curves of prices. That is averaging over time.
In addition to averaging over time, there needs to be
averaging over consignments. I think the drafting is a little
deficient there - that could easily be put right. We do not
pretend that within any given annual period it would be possible
to ensure that the negotiated margins could be precisely
observed, but we do believe that they could be observed in a
general and approximate way-that that would be quite feasible.
I would like to refer to one or two other points made
particularly, I think, by Dr. Augonthaler. First of all,
he mentioned the difficulty, under present-day conditions,
that many countries which go in for state trading are short
- 34 - E/PC/T/A/PV/15
- 35 -
of exchange and that therefore they must exercise a very close
discretion over what they buy. Well, as to that, I entirely
agree; but that, I think, is quite a different problem.
If you will look at Article 26 which deals with the problem
of balance of payments difficulties, you will see at the end
Paragraph 7 it says "Throughout this Section the phrase
'import restrictions' includes the restriction of imports
by state-trading enterprises to an extent greater than that
which would be permissible underArticle 32U. In other words,
the state-trading enterprise can do just what, under private
trading, would be accomplished by means of import restrictions
for balance of payments purposes. That, I think, is the answer
to that problem, whether there be negotiations about margins
or whether there must not be.
Another point which is raised by Dr. Augenthaler was
the case where the state-trading country desires to assure
stable prices to its home producers. Well, that it could do
in any case. The negotiation of margins would present no
difficulty because all that the negotiation of margins involves
is that there is to be a selling price which is, shall we say,
"x" above the buying price. It says nothing about the price
which you pay to domestic producers, and if the state-trader
cares to pay more to domestic producers than the selling price,
he can perfectly well pay a stabilised price all the time. It
is, in effect, a variable subsidy which keeps the price to
producers stable
Well, we feel, in short, that the problem of the state-
trade; who trades in only a limited number of Products in
what is otherwise a private trade economy must be kept quite
distinct from the case of the complete state-trader. They
are not comparable and must be dealt with by different methods.
V E/PC/T/A/PV/15
-36-
The idea which is implicit in the present Article 32,which
would assimilate the obligations to be entered into by the
partial state-trader to those which would be entered into by
the Governments of private trading countries, seems to us to be
right one. On one or two minor points, we feel that it is
rather regrettable that the United States amendment drops the
existing Paragraph 3. Under that paragraph the state importing
monopoly is required, subject to certain conditions, to satisfy
domestic demands. That provision is, in fact, the counterpart
for the partial state-trader of the obligation which is laid
upon private trading countries by Article 25 to renounce in
general the use of quantative restrictions on imports for
protective purposes. If there were not a provision about
satisfying demand, the door would be open to use state-trading
as a means of applying quantitative import restrictions for
protective purposes, and one of the main safeguards against using
protection in that way would be removed; so to resume, I would
say that in our view, it is essential that the case of the
partial state-trader under Article 32 should be kept distinct
from that of the complete state-trader under Article 33, and to
blur that distinction would lead to confusion, and we are afraid
that these negotiations about quantities and prices would simply
result in frustration of the negotiations. We think that the
present scheme of Article 32 should be kept.
D/PC/T/2/PV/15
V. - 37 -
S E/PC/T/A/PV/15
CHAIRMAN: Mr. Deutsch.
Mr. J.J.DEUTSCH (Canada): Mr. Chairman, the Canadian
Delegation fully supports there marks just made by the Delegeate
of the United Kingdom. Like him, we agree that the amendments
proposed by the Delegations of Czechoslovakia and the United
States would introduce a whole range of new considerations into
both our tariff negotiations and the substance of the Charter.
As was said yesterday, the Charter must accommodate the
differing situations between countries whose trade is conducted
largely through private enterprise and countries whose trade
is conducted under a mixed system, and it is important, in that
accommodation, that the balance is maintained - the balance of
obligations and benefits. We cannot here write a Charter that
does anything else.
Under the Charter as it now stands - as it came out of the
New York Committee - countries are required on request to
negotiate their tariffs, and that is particularly applicable
to countries whose trade is conducted largely through private
enterprise. In other words, they are required to negotiate
the protective margin that is afforded to domestic producers
and therefore it would seem correct that countries using State
trading enterprises should likewise, in a similar manner, be
require to negotiate on request the protective margins which
their monopoly operations provide.
The amendments that have been proposed, however, make a
rather drastic change in that situation. Under the amendments
suggested, countries maiatiaining State enterprises may negotiate
about quantities. That is not the case with respect to the
negotiation of tariffs. The Charter says negotiations must
proceed on the basis of the protective margins as provided by
a tariff. S - 38 - E/PC/T/A/PV/15
There is no possibility of negotiating quantitative
amounts. The Charter does not, as it now stands, permit that.
It does not envisage that. Whereas, with these amendments,
as fur as State enterpises are concerned, we introduce now
an entirely new principle.
We agree with the Delegate for the United Kingdom that
that is a substantial change and one which is rather
difficult to comprehend, coming at this late stage.
The Delagate of the United Kingdom has stated the
implications of this proposal. It would mean - in the case
of an importing country, say, which maintains a State enter-
prise monopoly - negotiating quotas, and a country requesting
those quotas would be negotiating on behalf of all the countries
that are interested in the export of that item. Furthermore,
it would moan the establishment of minimum quotas; in other
words, the importing country would undertake to take a certain
amount of a commodity.
Clearly, countries cannot make such undertakings unless
they know the price at which those minimum amounts will be
bought. Dr. Augenthaler's amendment clearly recognises that.
Then the negotiations take on an even wider and more
complex character. We are negotiating quantities and we
are negotiating prices. It seems to me that the bilateral
procedure for negotiating tariffs is completely inappropriate
to that kind of negotiation. We are negotiating quantities
and prices. That is not envisaged in the usual bilateral
tariff negotiations as we understood it.
We feel that that type of negotiation falls properly
under Chapter VII. Chapter VII is designed to take care of
that type of situation and certain conditions are laid down
and certain procedures are specified for the conduct of - 39 -
S E/PC/T/A/PV/15
negotiations of that type, and they are procedures which
are entirely different, or appropriate to bilateral tariff
negotiations.
Furthermore, before the procedures of Chapter VII can
be used, certain conditions have to be complied with, Now
it appears that those conditions do not apply in the case of
negotiations regarding imports by a State monopoly. You
deal with the same matters in the quantitative control of
imports, the quantitative allocation of imports and prices
and matters of what kind, but now you do it under the pro-
cedure of tariff negotiations under Chapter VII. There is
a basic inconsistency there in the substance of our Charter
if we adopt this procedure. L. - 40 - E/PC/T/A/PV/15
One of the reasons that has been advanced for introducing
this idea of negotiating minimum global imports is that the present
provisions in Article 32 are not practicable to cover every situa-
tion,and various technical difficulties have been suggested. Mr.
Shackle has, I nelieve, answered effectively those technical
difficulties; one mentioned by the delegate of the United States
was that in cases of commodities that are imported by a monopoly
and are mixed and processed and then sold, it is very difficult to
determine what the margin is. I think Mr. Snackle has stated that
the present Article 32 does envisage recognition of the situation
that arises when commodities are imported and are further pro-
cessed and then sold. I He has indicated that the margin shall
take account of the fact that processing and distribution costs
have been added, and it is not intended to lose sight of those
factors. In any case those are determinable factors, they are
a matter of costing. Even if this difficulty could not be easily
overcome, we feel there are other ways of overcoming it. In the
case of an item that is imported and then is blended with another
item and sold as a definite product, if there is any great difficulty
about determining the difference between the ultimte selling price
and the buying price, we feel that situation could be met in another
way. In that case all you would need to do would be to determin
the margin between the buying price of that raw material, the import-
ing price, and the price paid to the domestic producer for that same
raw material. You would avoi .--hen the problem of processing, etc.
If the present Article is not drafted exactly to meet that situation,
it could meet it, because in that way you would be aiming at exactly
the same principle, namely the protection afforded to - stic .
producers. If there is no domestic production of course the problem
of production of domestic producers does not arise. L . E/PC/T/A/PV/15.
If it is impossible to determine the margin between the buying
price of the imported product and the selling price of the resulting
product, you could do it by means of a subsidy.
Subsidies are, of course, allowed under the Charter. We see no
insurmountable difficulty here to enable us to reach the exact
equivalent of a tariff negotiation.
There has been some difficulty made about the problem that
arises in a country that follows a policy of stable price. Wheat
has been mentioned. A country may have a programme of a fixed
price for its domestic producers and a fixed price for its domestic
consumers, and it has been suggested that if a margin is negotiated,
fixed
that/price policy cannot be followed, because the domestic price-
would be tied to a fluctuating external price. Of course that does
not necessarily follow. We are here negotiating the maximum margin
only in the first place. A fixed price below the maximum margin
can still be followed and it is still possible to average it . Some-
times you will buy at a price abroad which is lower than your own
price; at another time you will buy abroad at a price which is
higher than your domestic price, and by a process of averaging, you
can still maintain a stable price. At what level that stable price
shall be depends of course on the size of the margin, and that iss
where the question of negotiations comes in. How high is that
margin and consequently how high is the stable domestic price ?
This is a matter which is fully provided for in Article 32.
It does refer, as Mr. Shackle has pointed out, to an average margin
over recent periods, and within those provisions it is possible still
to follow a stable domestic price. The height of that price will
depend upon the height of the margin, but that is precisely what we
are negotiating about. As Mr. Shackle has also suggested, there is L. - 42 - E/PC/T/A/PV/15
always the possibility of a subsidy in case the margin does not
allow the maintenance of a domestic price as high as the country
would like. Between those two possibilities we do not see any
fundamental conflict necessary between this idea in the present
Article 32 and the adoption of a stable price policy.
I would like to emphasise again, we think the suggestions
proposed in both the Czechoslovakian and the United States amend-
ments makes a very fundamental change in both the tariff negotia-
tions and the structure of the Charter. Therefore, we feel very
strongly that we should stick to the principle now contained in
Article 32; this we feel is the only way in which we can maintain
that balance between countries which conduct their trade through
private enterprise and those whose trade is conducted in other
ways. J.
- 43 -
CHAIREMAN (Interpretation): Mr. Augenthaler had asked to
speak.
M. S. MINOVSKI (Czechoslovikia) (Interpretation): Mr. Chairman,
I am sorry but Mr. Augenthaler was obliged to go, having to catch
a plane to Prague at six o'clock. He is very sorry, therefore,
that he is not able to take the floor again on this question. I
would merely add a few words.
We should not forget that countries such as Czechoslovakia are
obliged to negotiate on tariffs,quantities and prices. We are only
offered negotiations on tariffs, and sometimes we are offered
redustions on tariffs, which is not sufficient to meet our case.
CHAIRMAN: Mr Evans.
MR. J.W. EVANS (United States): Mr. Chairman, it seems quite
clear from the remarks of Mr. Shackle and Mr. Deutech that the
objectives for this state trading section of the Chartor desired
by their delegations are identical with the objectives which we
desire. That being the cases I feel that it would be
inappropriate for us to attempt to answer the arguments which they
have raised without very careful consideration, and we intend to
give them that csreful consideration.
I do, however, want to correct what I believe are likely to be
two misapprehensions which may be created by, in one case, a remark
of Mr.Shackle's and in another case, a remark by Mr. Deutach. It
was not the intention of the United States amendment to - and I do
not think that it did actually - lift the provision tentatively
it
provided for Article 33 and incorporate /in the new Article 32.
As we understand the previous draft of article 33, it called for
a
the global negotiation by/state trading country of all of its
E/PC/T/A/PV/15 J. E/PC/T/A/PV/15
imports from Member countries, the global amount which would
represent its complete imports of all the products from those
Member countries. That bears, I think, only a very superficial
resemblance. to the provision we have placed in article 32,
which is for negotiation product by products and, I might say, on a
bilatorial basis not on a multilateral basis, which we felt, in cases
where it was impossible to furmuate a request on the basis of the
marginal mark-up,would be a better parallel for a tariff
negotiation than no negotiation it all. G 45 E/PC/T/A/PV/15
The second point I would like to clear up is an
apparent misapprehension on the part of Mr. Deutsch. He
said that our Amendment provides that a State Member having
a State enterprise may negotiate on the basis of the global
quota. That was certainly not the intention of our language.
It was our intention that the initiative should be with
the exporting country, which is requesting a negotiation,
that if that exporting country believes that it can provide for
negotiation with an importing country, it should have the
opportunity of requesting such a negotiation with the importing
country.
The alternative offer was an alternative to the exporting
country to suggest other methods where it could see no value
to it in the first type of negotiation.
We will, however, go very carefully into the arguments of
both the United Kingdom and the Canadian Delegations before
replying any further. G . E/PC/T/A./PV/15
Mr, BOGAARDT (Netherlands): Mr. Chairman, before I
comment on the observations made by the various Delegates, I
am afraid l cannot avoid referring first to the Amendment
proposed by the Netherlands Delegation on page 11 of the present
document.
I intended to make a very brief statement on the Amedment
as to my opininon of the cases. Thare is a striking resemblence.
Li t:;in the of subsidies a distinction is made between
Iiscussions and negotiations on the bilateral basis and
negotiations on the multilateral basis. I think that the same
distinction should be male here.
Now I think I have to give a background of our point of
view. The Netherlands Government attaches great value to
Commodity agreements. That is to say inter-Governmental
arrangements on a multilateral base. We normally find
ourselves in the same position as the Czechoslovak Government.
We formed a price stabilisation scheme, that is to say, State
monopolised changes.
During the tariff negotiations we received a request to
fix these margins to a certein limit. We explained our
position in a paragraph to which I referred during the previous
discussions. We cannot fix the maximum margin, for the world
market price is an unknown factor.
The Canadian Delegate referred to the average cost, but
I do not think it will be a solution. I want to draw your
attention to the price of a bushel of wheat in 1938, which was
8 dollars 5 cents, and now it is 3 dollars, So I think it is
a very unwise move to try to fix the maximum margins before.
Mr. Chairman, we tried to do our utmost to have a commodity
agreement on wheat, and I think as a result of discussions the
Difference between subsidisation and maximum monopoly margins
should be avoided.
Theref>re, 16T. Chairman, I tli, that tcne alment of - 47 -
the Czechoslovak Delegate has many merits. On the other
hand I feel no definite objections to the United States props
proposal, subject to two observations.
The first one is to draw your attention to the Amendments
to which I referred previously. I think there ought to be
some close reference in the text proposed by the United
States Delegation. The meaning of that is to state clearly
the difference between discussions on the bilateral and the
discussions on the multilateral basis.
The second point is more or less a drafting point, which
is not quite the text of subparagraph (c) of the U.S.
proposal.
It reals: "any other arrangement to accomplish the
purpose of paragraph 1 of this Article" - then comes to a full
stop. I think a comma ought to be substitutes for the full
stop, to make it clear that the proviso only refers to sub-
paragraph (e).
As far as I can see paragraph 2 is only an elaboration
of paragraph 1 of the U.S. Amendment, and as the words
"subject to the provisions of Article 31" are explicitly
mentioned in paragraph 1, I do not think it ought to be
repeated in paragraph 21.
Thank you, Mr. Chairman.
E/PC/T/A/PV/15
G V.
48 - iviI,,,
CELIRMAN: (Interpretation): The hour is now late and we
have no hope of terminating this debate tonight. I suggest,
therefore, that we puesue it next weak.
There is, however, a remark I would like to make on our
programme for the beginning of nextLweek. Mr. lokanathan
of the Delegation of India, who was Csairman of the Zub-Committee
on Chapter 11, has to leave on Tue.day for India, He will come
back, but would like, naturally, that the debate on the result
of his work be discusped inchis zresenoe. I would, therefore,
suggest that we study the report of the sub-Committee on Chapter III
on Monday in Commission A. and that we pursue our work on Articles
51, 32, and 33 on Tuesday only. There is a difficulty in that
Commissien Balso meits on Tuesday; but I see no other way of
giving satisfaction to the request of the Delegate of India, and
I therefore would aMk all the members if they agree to my proposal.
Does everyone agAee? (,greed).
The MeotinE is adjourned until next week.
The Yeeting rose at 6.05 p.m.
V115/A/A /PV/I |
GATT Library | fd075rr6547 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Fifteenth Meeting of Commission B. Held on Thursday, 26 June 1947, at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, June 26, 1947 | United Nations. Economic and Social Council | 26/06/1947 | official documents | E/PC/T/B/PV/15 and E/PC/T/B/PV/11-20 | https://exhibits.stanford.edu/gatt/catalog/fd075rr6547 | fd075rr6547_90250086.xml | GATT_155 | 13,586 | 83,130 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/B/PV/15
26 June 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
FIFTEENTH MEETING OF COMMISSION B
HELD ON THURSDAY, 26 JUNE 1947, AT 2. 30 P.M.
IN THE PALAIS DES NAIONS, GENEVA.
The Hon. L.D. WLIGRESS
(Chairman)
N.B. It was not possible to provide verbatim recodr sof the
Twelfth, Thirteenth and Fourteenth Meetings of Commission B
(19, 24 and 25 June). Please refer to Summary Records
E/PC/T//BSR/12, 13 and 14.
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247)
(Canada)
NATIONS NUIES E/PC/T/B/PV/18
CHAIRMAN: The Meeting is open.
We will resume our discussion at the point at which
we left off yesterday. That brings us to Article 72,
Establishment of Commissions, and on pages 17, 18 and 19 of this
Document W/210 Revision 1, we have, first of all, a comment
by the Australian Delegation, suggesting the establishment of
a Commission to deal with matters coming under Chapter III.
There is a proposal of the Chinese Delegation to add a
Commission on Economic Development; and the French Delegation
also proposes an Amendment which provides for the
establishment of a Commission on Economic Development and
Co-ordination, and the United States Delegation propose
the adding of a Commission on Economic Development and
International Investment.
The suggestion of the Chair is that the discussion
should be opened on all of these proposals, and after a
general discussion we should then refer the subject to the
Sub-Committee to take into account the views expressed in
the Commission.
Do any Members wish to speak on these proposals?
The Delegate of Norway.
Mr. ERIK COLBAN (Norway): Mr. Chairman, I have no
objection of principle to the establishment of a fourth
Commission between the three mentioned in the New York Report,
but I would like to draw the attention of the Commission to
the difficulty in finding always the required experts, if we
go on multiplying our Commissions, and even if we restrict
the numbers of each Commission I think it will be very
difficult to equip four strong Commissions properly, and I
wonder whether the result aimed at could not be achieved by the
GG 2 G 3 E/PC/T/B/PV/15
Executive Board inviting the persons with the required
technical knowledge to enter into one of the three
Commissions already mentioned in the Draft of New York.
I quite realise the desre which already was strongly
expressed in our London Session of having a special organ to
deal with economic development and reconstruction; and I also
realise the importance of the point brought up, I think it
was, by the U.S. Delegation, of international investment; but
would it not be possible by more careful handling of the
staffing of the three Commissions already provided for to get
in each one of those one or more Members with the particular
technical knowledge of employment and economic questions, and
of questions of economic development and international
investment.
I just want to warn against more or less carelessly
trying to satisfy our desire for the strongest and best
possible organisation by adding to the organs already
contemplated, because, I repeat it, I am afraid we shall not
be able to find the proper persons in all cases.
The Organisations of the United Nations already have taken
away so much of the expert knowledge at our disposal that it
becomes more and more difficult to establish our Organisation
on the proper basis, and we should not anticipate the
Secretariat being also constituted not only of translators and
document officers but also of persons having technical knowledge
of all the problems the ITO is called upon to deal with, but
trust for co-operation between the Members of the Commission,
for a number are accepted to be holding quite important
positions, and the Members of the Commission should make it less
necessary to establish a separate Commission in addition to the -4-
three already mentioned; but to follow out my line of
thought it would then be necessary in some way or another
to indicate in 72, perhaps, or may be in another place,
that we take it that these Commissions will be staffed in
such a way as to be able to take into consideration the
complex problems of the whole of the Charter, while having
the special task of looking at business practices or
commodities and so on. V -5-
CHAIRMAN: The Delegate of Australia.
Dr. H.C. COOMBS (Australia): Mr. Chairman, the Australian
Delegation has advanced a suggestion that a fourth Commission
should be created, and I think in view of what I want to say
subsequently, it would be as well for me to explain that we put
that proposal forward for three reasons. First of all, because
we feel it necessary that action arising out of Chapter III
should be provided for in the administrative and executive
arrangements. As we have emphasized, it is our view that a
successful operation of the rest of the Charter is dependent very
largely upon the successful implementation of the objectives
embodied in Chapter III, and we feel, therefore, that this
should be recognized in the structure of the Organization,
particularly as many of the other functions which the Organization
will have to perform will of necessity have to take into account
considerations which will arise from the undertakings in Chapter
III .
In our opinion, there is practically no part of the Charter
from which employment considerations can be excluded, or which
have been or have to be considered against a background of a
current employment and effective demand situation. Therefore,
we feel it essential that the Organization should be adequately
equipped on this side, just as it is proposed to equip it
adequately in relation to the other parts of the Charter.
We suggested a Commission, because that is the form which
is established in the rest of the Charter for dealing with the
other Q'-z.: - '. c the Charter. We felt that it was necessary
to suggest a separate Commission, on the assumption that the
Commission was to be the normal form of adminstrative machinery,
E/PC/T/B/PV/15 V. -6-
because, as the functions of these Commissions are outlined in
the Charter at present, there is a very rigid separation of
their functions. In fact, a Commission is, so to speak,
handed a Chapter of the Charter and there is no indication of
capacity on their part to deal with matters outside that
Chapter, and consequently it would appear difficult to see what
provision has been made in the Organization section of the
Charter for dealing with the very important content of Chapter III.
Now, I would say that we make this suggestion fully recog-
nising the fact that the prime responsibility internationally
for the content of Chapter III will lie with other international
agencies; but, none the less, the I.T.O. will have its role
to perform in relation to its subject matter, and we felt
some provision for administrative machinery was necessary.
The Australian Delegation, however, does feel that it is necessary
to raise some of the same sort of doubts which the Delegate of
Norway has raised in relation to the suitability of the
Commissions as the appropriate type of machinery. The
Delegate of Norway has raised it only in connection with the
employment function. I trust you will forgive us, Mr.
Chairman, if we raise a question which may appear to be somewhat
fundamental, so late in the day. The only excuse we can offer
is that it is a very difficult thing to consider organizational
questions in vacuum. We have been a concerned primarily up
to date with trying to determine what the functions of the
International Trade Organization shall be, and the nature of
the obligations which its Members shall undertake, and we,
had
for our part at any rate, have/little time to consider the
suitability of the structure contemplated. But by a very
hurried examination of it recently, we do feel some doubts about
the suitability of the Commission form for the work which we
E/PC/T/B/PV/16 E/PC/T/B/PV/15
-7-
are going to call upon the I.T.O. to do.
First of all, in many respects the Organization will have
executive functions, and I think it is fair to doubt whether
the type of Organization embodied in a Commission is always the
most suitable for that type of work. A Commission is a suit-
able body to carry out an investigation, to conduct an enquiry
and to make a reportbut it is not a very suitable body for
doing things. For instance, we have in mind particularly
the Chapter which deals with industrial development, where it
is the function of the Organization to assist countries to
obtain advice - technical and professional and so on- in
relation to their plans for industrial development. It seems
to us, at a preliminary glance, that the type of Organization
which would be necessary for that would have full-time
employees of the Organization who were experts in particular
fields; not that they themselves would provide the advice
sought by the individual countries, but they would be familiar
with the types of Organizations where it could be found, and
perhaps even with persons in different countries of the world
who might be able to provide it, and would be capable of carrying
through the organization for the provision of such advice.
I just give that as an example of what appears to us to be
a need to look again at what the Organization will, in fact, have
to do, and to see whether the type of machinery we are establishing
for it is appropriate to the function. I think a lot of mistakes
have been and are being made in international organizations because
We tend to have a uniform type of structure for the units we set
up, quite apart from the task we are asking them to perform.
It was, for instance, one of the arguments which we advanced
strongly for the I.T.O. having some executive functions in relation
to industrial development, when we were aware that there was a
Commission or sub-Commision of the Economic and Social Council
operating in the same field. It was possible for the I.T.O.
V. V. -8- E/PC/T/B/PV/15
to be an executive body, when it would not be possible for
that sub-Committee to act in an executive way; and it would
be a pity, therefore, if, having decided that the I.T.O. should
have executive functions in this field for those reasons, we
imposed upon the I.T.O. a type of administrative organization
which deprived it of the advantage which decided us to give
it the function wo had in mind. - 9 - E/PC/T/B/PV/15
If they are to be part-time employed only, then I think we
would find, as we are finding in the case of the employment in the
Economic Commission of the Economic and Social Council, that it is
impossible for them to work adequately without very extensive
preparatory work carried out by people fully as competent as they
themselves. Therefore, we may well find in some of these cases that
if we adhere to the Commission form of organization, that we not only
have a Commission but we have, at the same time, to go out and find
experts who can be employed to work for the Commission, and who are
as thoroughly trained and equipped and as competent in this field as
the members of the Commission themselves, and we double our
personnel difficulties to which the delegate for Norway has already
referred.
On the other hand, if these people are to be full-time employed
on this work and they are to be experts selected for their personal
difficult
qualifications, it is on the whole/to see what advantages are gained
from not regarding them just as employees of the International Trade
Organization, who would be working in the same way as any other
technical or professional staff of the Organization. It is the
general structure of the ITO as I understand it that there should be
a Conference and an Executive Borad, and the Conference will be
served by a Director-General and a staff and as the delegate for
Norway has pointed out, it is presumably conceived that the Director-
of necessity
General and the staff will/be men of considerable capacity in the
fields in which the ITO is concerned. If we set up also commissions
which, so to speak, may come between the Conference and the
Executive Board on the one hand, and its staff on the other, then it
does raise doubts as to whether it would be possible to get people
of the necessary competence as members of the staff of the
Organ ization. -10 - E/PC/T/B/PV/15
Now, Mr. Chairman, in putting these things forward I may
have sounded rather more critical of the idea of the Commissions
than I intended to be. I may say that perhaps the Commission
form is the best form for the task we have to achieve, but I
must confess some doubts, and I believe it would be wise if,
when we are referring this question to a Sub-Committee, as I
presume we will, we should ask the Sub-Committee to examine
this question with considerable care in the light of the
functions which we are going to ask the Organization to carry
out; to make a judgment as to whether, in their opinion, the
Commission is the most appropriate form, not necessarily for all
the Chapters but for certain of them. It may well be that the
Commission is the appropriate way, say, of dealing with the
tariff question or with the commodity agreements question, but
not necessarily the best way of dealing with other questions.
I suggest, Mr. Chairman, that we invite our Sub-Committee to
give some consideration to this, and that they take the opportu-
nity to consult with other International Organizations who have
had some experience perhaps over a number of years of the methods
of operation of international relations en these lines.
If, as a result, it is decided that, either for some of
the functions or even for all the functions of the ITO, the
Commission form is the best type of organization we would then
put forward very seriously certain suggestions. As I mentioned
earlier, there is at present a fairly rigid statutory division
between the functions of these Commissions. One thing that I
think we have all learnt in this Conference is that, while you
can divide this Charter up into Chapters, this division is a
fairly arbitrary one and the subject matters of these Chapters
overflow into one another. We have moved things around from
Chapter to Chapter, and there is considerable argument going on ER. -11- E/PC/T/B/PV/15
at the present time as to whether certain provisions should be
in Chapter IV, V, or VIII. It is clear, therefore, that a divi-
sion of functions which is based solely upon the contents of
the Chapters is likely to lead to jursidictional disputes
between Commissions as to whether a particular job belongs to
one Commission or another, and I would suggest very strongly
that we do not seek to lay down in a statutory form in the Charter
the specific functions of the Commissions. In fact, I would be
inclined to leave it that the Organization, i.e. the Conference,
could set up such Commissions as it felt necessary, and could
prescribe their functions at the same time, so as to enable them
to change those functions or reshuffle them if they felt it to
be necessary. It does seem to me to be important that when we
establish an Organization we should not burden it with a rigidity
of administrative procedure which may interfere with the efficiency
of its work.
For the same purpose, if we are going to have Commissions,
and there will be a separation of functions between them, the
problem of linking their work together does become of very great
importance. Now, the one or two provisions which I can see
which are designed to prevent these Commissions from working
in isolation from one another are, firstly that they are all
responsible to the Executive Board, and secondly that the
Director-General is entitled to be present at their meetings.
I would suggest that something more than that is necessary.
The Commissions, particularly if they are composed of part-time
people coming for short periods for particular pieces of work,
are unlikely to be as familiar with the work of the ITO as they
should. For instance, they would not have the sort of sense of
budgetary responsibility which might be a very important factor.
And we would like to suggest, Mr. Chairman, that the Sub-Committee, ER.
- 12 - E/PC/T/B/PV/15
when it comes to this, should give consideration to whether it
was
would not help if the Director-General/not merely entitled to be
present at these meetings, but was also entitled to participate
as a full member of the Commission. That would give him a
particular responsibility. His functions would be to represent,
so to speak, the collective view of the Organization, to bring
home to the other members of the Commission the relationship of
what they were doing to the work of the other Commissions and to
the work of the Organization itself and to be the mouthpiece of
the common judgment of priorities, of relative importance, for
it is a very critical task to keep a number of different organ-
izations of this kind functioning harmoniously.
What I have had to say, is intended to be very tentative,
and merely to raise what appears to us to be some fairly funda-
to
mental questions/ which we would like the Sub-Committee to turn
its mind. E/PC/T/B/PV/15
CHAIRMAN: The delegate of Brazil.
Mr. L.D. MURTINS (Brazil) (Interpratation): I would like to
add only a few comments to the remarkable statement made by the
Australian delegate with which I completely agree. I would like
to remind delegates of a few points only. I think there is a great
necessity for creating a Commission on economic development, and
of granting the same powers and the same perfect constitution to
that Commission as are granted in the Charter and given to the other
Commissions which are already mentioned in the Charter.
This new Commission on economic development will have to deal
with technical matters, and it will be the organisation to study
and carry out the provisions of the Charter in relation to Chapters
III and IV. I do not think the Organisation can dispense with
such a Commission and such a permanent and continuous body which
will have to take up permanent and continuous studies if it wants
to exercise the powers and carry out the duties entrusted to it by
the Charter. These continuous functions must be exercised by
experts who will have to collect material information, and classify
and analyse that information; I do not think these functions can be
entrusted to temporary representatives of the Powers. They must
be continuous, especially if we look at the functions described in
Article 11, paragraph 2, and in paragraphs 1, 2 and 3, of Article
12, and also in the much discussed and difficult Article 13;
there we see the need of a permanent Commission to study these
questions and carry out the duties of organisation relating there-
to.
L.
- 13 - J. - 14 -
E/PC/T/B/PV/15
In fact, if we look at the Charter as a whole, we see that a
balance has been provided for in the Charter between the two parts
of the Charter. On the one hand, you will find it relating to
developed countries, and on the other hand, you will find provisions
for the industrially under-developed countries. I think that if
we do not provide for a special Commission here relating to this
second part of the Charter, the equilibrium of the Charter will be
broken and, I should say, the scale tipped one way.
Now, to answer the arguments which were given by the
Norwegian delegate that it would not be practical and that for
certain practical reasons it might be difficult to set up this
Commission, I would like to say that I do not see why it should be
more difficult to find technicians for such a commission as to find
technicians for the other Commissions which are already provided
for in the Charter. In fact, the technicians who will have to
deal with this now body would not be the same as the other
technicians who will study and sit on the Commissions which are
already mentioned in the Charter.
This question of a Commission to deal with Chapters III and
IV presents a special interest to the under-developed countries, as
I have just stated. If we can set up that Commission, it will be
one of the most important bodies of the Organization, and it will
be one of the happy solutions provided for in the Charter, because
there will be the possibility of solving many problems without very
often taking into consideration political factors and of studying
the questions from a technical angle only only.
Therefore, the Brazilian delegation supports whole-heartedly
and as strongly as possible the proposal which was put forward by
four delegations for the creation of a special Commission to study
the question arising out of the provisions of the Charter relating
to Chapters III and IV.
CHAIRMA: The delegate of France. G - 15- E/PC//T/B/PV/15
Mr. KOJEVE (France) (Interpretation): I am, Mr. Chairman,
in practically the same position as the Australian Representative,
in that I am not certain that Commissions are the most
appropriate bodies; and this is the reason why our proposal
is a conditional one. We state in our proposal that if it is
decided to set up Commissions there should be four Commissions
instead of three, and the reason for our proposal is this:
The main purpose of the Organisation is the development of
world trade. My country, in particular, has the. greatest desire
to increase its export. The reasons are well-known, but I shall
summarise them.
Owing to the war we have lost the greater part of our
foreign assets, and therefore it is necessary to increase our
export in order to re-establish our balance of accounts. Other
countries are in the same position for the same reasons.
Now it is impossible to increase exports as long as the
world markets remain as they were before the war. It is
therefore necessary to open and create now markets in undeveloped
countries. It is therefore necessary to increase the industrial
development of undeveloped countries. This is the reason why in
addition to the Commissions provided for in the existing Draft
of the Charter it appeared to us necessary to create a Commission
to deal with the very basis of our economic exchanges.
Now here are two aspects of one problem. If it is impossible
to develop a country without having free world trade, it is
likewise impossible to have free world trade if the differences
between the countries are too great; and the experience has
shown that commercial exchanges are particularly important between
countries that are highly developed and not between highly
developed countries and undeveloped countries. For the various G. - 16 - E/PC/T/B/PV/15
reasons that I have just stated our Delegation suggests that
the new Commission should be described as a Commission on
Economic Development and Co-ordination. What we want to bring
about is harmony through an intensification and increase of
commercial exchanges, and we think that in order to obtain
a co-ordinated economy it is necessary to see to it that its
basis should be more or less homogeneous.
As regards the question raised by the Australian Delegate
regarding the purposes of Chapter III of the Charter, I am not
certain that a new Commission will be necessary. The Commission
which we suggest should be set up will have to deal necessarily
with problems of employment, because no development and co-
ordination will be possible without having ensured full
conditions of employment, and inversely it is necessary to ensure
employment in order to ensure the necessary development and
co-ordination.
Now, on the one hand, modern technical procedures require
mass production, and mass production requires in its turn
domestic markets that are more or less stable. On the other
hand, the political division in Europe, and also in the Near East,
is particularly considerable and it is necessary to contemplate an
economic co-ordination which does not affect the existing
political structure. If there are special organs under the
United Nations to deal with these questions, I think it would
be a good thing if there existed a Commission of the International
Trade Organisation to assist them in this particular work.
Finally, the United States Delegation has proposed the
establishment of a Commission on Economic Development and
International Investment. No doubt investments are one of the
moat important elements for the solution of the problem with
which we are confronted, but I should like to point out that G - 17 - E/PC/T/B/PV/15
development is a purpose, while investments are only a means,
and in that case I see no reason why we should not, for instance,
have the phrase, "free access to raw materials and international
investment", and this would make a very heavy title for this
Commission; but I do think that it is not necessary to mention
investments in the title, since investments are only one of the
means to reach a def inite purpose.
Now to conclude, I should like to say a few words on the
remark made by Mr. Colban. I think his observation is a serious
one, but I think it only applies to the present time, because if
functions are created, man will also be found who will wish to
specialise and fill up the various posts.
I think that the problem which now exists will no longer
exist in two or three years.
These, Mr. Chairman, are the reasons for our proposal for
the creation of a fourth Commission.
CHAlRMAN: The Delegate of China.
Mr. D.Y. DAO (China): Mr. Chairman, the previous speakers
have covered most of the ground of what I wished to say in
support of the Chinese Amendment, in so far as economic reasons
where the Charter called for the establishment of a Commission
are concerned. Therefore, I would like to confine myself to
a problem of a mor e or less technical nature, in the light of
the Draft Charter. E/PC/T/B/PV/15
One of the purposes of the Charter is to encourage
industrial development. We all believe that an expanding
world economy depends upon two factors: one is to reduce
or to eliminate trade barriers - that is the negative side of
the picture - and the other is to encourage industrial and
general economic development. That is the positive side of
the picture.
On the negative side of the picture, we have three
Chapters, and therefore we propose to set up three Commissions.
It is obvious that the Commission on Commercial Policy will be
a very busy one. As to the other two Commissions, the Commission
on Business Practices
/ will accupy itself with complaints received in regard to
reat'3.tive-business practices, and the other Commission on
Commodities will also examine general questions; but when it
comes to the stage where the commodity agreements or regulatory
agreements are concluded, the administrative side of the
arrangements or agreements will be undertaken by Council. So
we feel the need for creating three Commissions for three types
of measures; yet in the London Draft and in the New York Draft,
the setting up of a Commission on economic development is left
in an indeterminate stage, although I admit that the New York
Draft made some advance in this direction - but not as far as
we wish to go.
Now, when we come to examine the functions of the
Organization as laid down in Articles 11 and 12, we see that
the Organization is expected to advise Members concerning
their plans for economic development. The plans for economic
development may be very involved. They may be formulated by
the Member Government with care and after long consideration,
taking into account all the economic factors and other matter.
Therefore, it is quite obvious
- 18 -
V
in connection therewith. - 19 -
V E/PC/T/B/PV/15
that when the Members submit a plan to the Organization for
examination, neither the Conference (which will meet annually
except in exceptional circumstances) nor the Executive Board
(which will meet at certain intervals) could have sufficient
time to examine those plans. It is quite conceivable that
these plans have to be examined in detail by a body of exports,
and I feel a little doubtful as to whether such a plan could
be examined by the Secretariat: the Secretariat will be
occupied by administrative matters.
Again, there are other functions which the Organization
will be called upon to perform: to provide or arrange for the
provision of technical assistance, and to lend its good offices
towards the settlement of disputes, and examine the protective
measures which a Member may adopt. So, from the technical
point of view, there is a great need for the establishment of a
permanent organ within the framework of the Organization, to
carry out all the functions that are assigned to the Organization.
As I said a few moments ago that I would confine myself to
remarks in support of our amendment, I will naturally refrain
from making further remarks regarding the French proposal and
the U.S.A. proposal, to both of which a new idea will be added
and I believe that the U.S.A. proposal will also be examined
by a Commission dealing with Chapter IV, so I think that
the best place for the Chinese Delegation to express its views
on the question of investment is when we discuss Chapter IV. ER - 20 -
Mr. E.H. KELLOGG (United States): Mr. Chairman, to clarify
ourown mind I would like to ask the delegate for Australia if he
is proposing to set up a fifth Commission, assuming that a fourth
Commission on Economic Development for Chapter IV is set up.
Dr. H.C. COOMBS (Australia): Mr. Chairman, we are not
proposing to establish a fifth Commission definitely. We suggest
that the Sub-Committee should give consideration as to how the
functions arise, and as to how Chapter III should be administered.
It may be that we would decide about the Commission but we feel
doubtful about that, even if the general form of the Organization
is of a Commission type. I think tentatively, it would be our view
that the requirements of Chapter III would be met by an adequately
staffed section of the Director-General's staff, but that is a
tentative view, and we raise the question because we want the Sub-
Committee, when it is considering this question of organization
generally, to ensure that it takes into account the need for adequate
administration of the matters arising out of Chapter III.
Mr. E.H. KELLOGG (United States): We are, Sir, very much
impressed by the Australian comments on the Commission system. As
you will recall, there was discussion on this point in London, and
no doubt the Sub-Committee will have to cover this ground carefully.
However, if the present form of structure is to be retained, then
the United States feel that the field of economic development and
investment will require particularly a Commission to implement it.
Any glance at the United States suggestion on Chapter IV will show
that there are many functions which, in our view, will require a
body to implement them. With respect to the third Chapter, I see
in its present form that the policy is to refer most of the work to
E/PC/T/B/PV/15 - 21 - E/PC/T/B/PV/15
the Economic and Social Council owing to the implementing work of
that Council, and for that reason, I asked Dr. Coombs whether he
was insisting upon a Commission in addition to the work to be
performed by the Economic and Social Council, and by its Sub-
Committee on Employment and Economic Stability. In London we
repeatedly expressed the opinion that we did not want to see the
as a
ITO established/body to unnecessarily duplicate the work of the
commissions of the Economic and Social Council. 22 E/PC/T/B/PV/15
CHAIRMAN: The delegate for Cuba.
DR. GUSTAVO GUTIERREZ (Cuba): Mr. Chairman, the Cuban
Delegation is very much of the opinion of the Australian Delegation.
We have stated our view many time from the beginning of the
Conference, especially from the very beginning, when in Plenary
Session a statement was made as to the weakness of Chapter III
and Chapter IV in comparison with all the other Chapters of this
document.
If we consider the way in which this matter has developed,
you will remember that the original United States proposition
had a Chapter III entitled "Employment Provisions". Then came
afterwards Chapter IV with "General Commercial Policy". When
this came up in London it was clearly seen that this had to be
divided into aspects, the aspect of employment, effective demand
and economic activity, as it was finally entitled, and the
aspect of economic development, and then from one Chapter
became two which were set up in the New York draft, Chapter III
entitled "Employment, effective demand and economic activity"
and Chapter IV entitled "Economic Development".
Now there is the proposal to set up a Commission to take
care of the matters relating to economic development with the
addition proposed by the United States Delegation to add the
words "International Investment".
But there is another factor which in our opinion is most
important, that is Employment and Economic activity. This
Conference and this Charter is entitled a Conference and
Charter on Trade and Employment, but employment is becoming
every time more and more vague. We cannot have more employment
if we do not have more trade, but if we relate it so closely
to tariffs and trade we lose sight of the paramount objectives
of these meetings, which is to give opportunity of work to the
peoples of the world. P.
23 E/PC/T/B/PV/15
That is why we are absolutely in accordance with the
Australian Delegation that the provisions and the matters
contained in Chapter III must be taken care of by a Commission.
We, of course, do not think it is proper to have a new
fifth Commission, but, as we are talking of setting up a Commission
on Economic Development and International Investment, we could
very well take out "International Investment", which is only a
means to attain the goal of employment and expansion of trade,
and set up a Commission under the name of "Commission on
Employment and Economic Development". In that form it would
be clearly stated that both Chapters III and IV would come under
the sphere of influence of that Commission and we would have
given to those two Chapters the implementation which is really
lacking now.
CHAIRMAN: Do any other members of the Commission desire
to speak on this subject?
DR. W.C. NAUDE (South Africa): It depends on what your
ruling is going to be whether I should like to say something.
If you are going to propose that it should go to a Sub-Committee
then I should like to speak.
CHAIRMAN: I was going to propose that the matter be referred
to a Sub-Committee, but it is very desirable that there should
be as complete and full expression of views in this Commission
as possible. Therefore I give the floor to the delegate of
South Africa.
DR. W.C. NAUDE (South Africa): Mr. Chairman, our Delegation
has wondered since the beginning whether this Article 72 should
not simply provide for the Conference to establish such Commissions P.
24 E/PC/T/B/PV/15
as may be necessary, leaving it to the Conference to decide
what that Commission has to do. At the same time we are very
conscious of the significance of the three Commissions that
are now provided for and of the balance to which so much
importance has been attached in respect of Chapters III and
IV. We feel, on the whole, that there is at the present time
still so much doubt as to precisely how these Commissions are
going to be worked, how they will fit into the Organization,
that, in fact, we even wonder whether the Commissions are going
to be the appropriate instruments for carrying out what we want
the Organization to carry out.
Dr. Coombs suggested that a Sub-Committee might examine
the matter and recommend to us a solution; alternatively the
Sub-Committee might prepare material which could be further
studied in this Commission itself. What it really amounts to
is that our doubts, which we have had ever since the days of
Church House, have simply been strengthened by this debate
which has been held here now. We have always thought that the
experts who have been working on this thing knew what they were
about but we are beginning to feel now that we should be very
careful with the multiplication of Commissions. The delegate
of Norway has already spoken about the shortage of experts. I
think that with four or five Commissions together with the
personnel of the ITO itself shall have a very difficult
problem to find to cover the whole field. Not only
that, I think that the ITO is already faced with tremendous
oblems and adding Commissions of this sort might before we
know where we are render the ITO simply incapable of carrying
on. It would topple under its own weight. I therefore feel
that the matter really should be further studied and perhaps
we might at this point simply let it go to the Sub-Committee. P.
25 E/PC/T/B/PV/15
As regards the particular additional Commissions that
have been suggested, we are of course very sympathetic with the
suggestion of an Economic Development and Coordination Commission.
The French Delegation has put forward a quite sound argument.
At the same time we feel also impressed with the American
arguments in favour of recognising the significance of inter-
national investment. I take it that if I were an investor I
should like to know that there was some security in the places
where I would be investing my money. So certainly I am sympa-
thetic with the American proposal.
But, getting back to something I said earlier about the
danger of now perpetuating in a Constitution which cannot be
altered very easily the various Commissions, I can visualise
even
present developments overriding,/the political developments
that are taking place today or tomorrow in Paris,which might
quite conceivably damage the sort of structure which we might
set up here.
I merely wish to emphasise that we are not certain in
our minds at all how the thing is going to work and it should
be referred to a Sub-Committee. CHAIRMAN: The delegate of the Netherlands.
Dr. S.J. BARON VAN TUYLL (Netherlands): I would like t
underline the remarks made by the Cuban delegate on the history
of the Commissions; in fact there were only three Commissions in
this Charter, because the original United States' draft Charter
only mentioned very few provisions on economic development and
employment. Now we see that those provisions on economic develop-
ment have been extended after further study, which has led to the
new Chapter IV. I, therefore, feel there is really no reason why
we should now object to the setting up of a special Commission for
that work which, although it was not very important at the beginning
of the London Conference, has developed into an important function
of the present Organisation.
I am, therefore, in favour of establishing a special Commission
for economic development. As to the name of this Commission, I
would first like to remark on the name the Frech delegate wanted
to give to the Commission. I must admit I was rather concerned
about the word co-ordination, as I was not quite clear in my mind
what was meant by coordination, and what that Committee would have
to co-ordinate. The French delegate has explained what he means,
and as it is only the co-ordination of the economic policy of the
countries, I am prepared to admit that co-ordination could be men-
tioned in the name. But to put this in its right place the Com -
mission should, in my opinion, be named "Commission on Co-ordinated
Economic Development" and not "Commission on Economic Development
and Co-ordination.
I would further like to comment on the United States' suggestion
to name the Commission "Commission on Economic Development and
International Investment". The Netherlands delegation is in favour
of including the words "International Investment" in the name of the
E/PC/T/B/PV/15
L. 26 27
Commission. We do not believe the arguments put forward by the
French and Cuban delegates are a sufficient reason for not men-
tioning these words. In our opinion international investment is
one of the important means to economic development and one which
entails much international co-operation. The French delegate
mentioned as another means the free access to primary commodities.
In our opinion it is not necessary to mention this, because free
access to primary commodities is the means of economic development
which can very easily be applied by every country unilaterally.
There is no international co-operation necessary unilaterally to
admit free access to primary commodities. Actually, on the sub-
ject of international investment, I would like to point out the
problems connected with international investment are at this moment
being studied in the Sub-Committee /on Chapter IV, and it is not quite certain how this
Chapter will in the end be left.
I would, therefore, like to suggest that the sub-Committee which
will be set up to study the Commission on Economic Development and
International Investment should contact the Sub-Committee on Chapter
IV, to see if the name still applies to the subject of Chapter IV.
At present it has not yet been decided what the provisions of
Chapter IV will contain.
E/PC/T/B/PV/15
L. E/PC/T/B/PV/15
-28 -
CHAIRMAN: I have listed as speakers the delegates of the
United Kingdom, Bazil, and Chile. aA we have already heard the
views of nine delegations on this subje;c anda fter these three
speakers have spoken, twelve delegations will have expressed their
views, I therefore propose to close the deuate after I have
called on these three speakers. First of all, I call on the
delegate of the United Kingdo.m
IM. J.E.S. FAWCETT (United Kindgom): rM. Chairman, if I
may make two brief observations. First, we think there is a
danegr that the Charter may boeome in its ocnstruction too
schematic, because we have ste up OCmdissions on matters
whihc fall specifically in thiss phere of the International Trade
Organization, W emay be led autoamtiaclly to set up a Cmomission
for employment which is of more general xetnet within the
Organization,a nd also is closely related to th eactivities of many
other bodies which have already been set up by the Economic nad
Social Council.
We think, therefore, that the description of the functions of
the Commissions should not be too precise in tm eChartbr itself,
and that if a coimmssion is set up for employment, irticles 3and
7(b) of Chapter III should be particularly stressed, because those
are the Articles which require the Organization to co-operate with
outside organizations.
We think that this cCmmission, to avoid overlapipng with the
work of the Economic and Social Council and its mpomissions,
should have mainly a co-operative task. It should be a liaison
between the Organization and those bodies on this very general
problem of employment.
J J. - 29 - E/PC/T/B/PV/15
It perhaps may follow from that that, as Dr. Coombs, if I
understood him correctly, suggested, these functions should be
performed not perhaps by outside experts called in temporarily to
they
form a commission, but that / should be performed by permanant
technical personnel in the Organization who are fully aware of the
whole of the Organization's work.
CHAIRMAN: The delegate of Brazil. G - 30 - E/PC/T/B/PV/15
Mr. MATrIS (Brazil) (Interpretation): Mr. Chairman,
I would want to add a few remarks to the already long disucssion
which has taken place here.
As far as the title of the Commission is concerned,
I should like to maintain the original text, that is to say
the Commission for Economic Developnent.
I think that if w ekeep to th esimple wording, we may
find a general agreement on this text, wh eeas if w eadd
some kind of lcariifcation we mihgt find some other position.
The Brazilian Delegtaion htinks thca the Amendment which
has been submitted by the Frecnh Dleegtaion may raise some
objection, and this would b eto diminish the importance of
economic development as fra as we consider this development
frmo a world st.ndpoint. Th: pr hramme of international oc-
operation must be considered not only from one side but from the
world standpoint.
The development of
countries can b econdsierde from a unilateral viewpoint,
taking into account the interest o falready developed countries,
ubt it can also be considered in another unilateral sense, a
being necessary orf comtnries under-devloeped, because the
peace o tfhe world and economic stabilities of more developed
countries can also be of interest to less developed countries;
and therefore it is preferable not to consider the unilateral
aspect of the problem but th weorld aspcte.
I therefore consider
that no kind of arclification should be added to the words
"Economic Development".
A fsar a Cshapter II iIs concerned we do not think
that the proposal made by the Australian Dlcgaetion aims to create G. - 31 - E/PC/T/B/PV/15
immediately another Commission. In fact, we see that the Charter
for
provides/the creation of other Commissions, but those Commissions
can be created later.
I do agree with what the Delegate of the United Kingdom said
about the fact that certain organs could deal with this particular
problem.
As far as the question of experts is concerned, I think
that in this area we need another kind of expert - in the question
of commercial policy - and therefore I think that we could find
these experts without taking away experts who are dealing with
other questions. Therefore, the objection which has been made
that we lack experts in this matter should not prevent us from
creating another Commission.
CHAIRMAN: The Delegate of Chile. V. E/PC/T/B/PV/15
- 32 -
CHAIRMAN: The Delegate of Chile.
M. F. Garcia OLDINI (Chile) (Interpretation): I very much
fear, Mr. Chairman, that I must prolong the discussion a little.
I shall try to be brief.
It is obvious that the reasons for setting up a Commission for
economic development are themselves so plain that it is
unnecessary to stress them. As for the name of the Commission
itself, I think this is of secondary importance. I think that what
is of paramount importance is the functions of this Commission, and
I understand there is no doubt whatever on this point. Now, even
if this Commission is described as being a Commission for Economic
Development, which will be its essential function, it will
necessarily also consider problems of employment.
I should like to add that I have been deeply impressed by the
second part of the remarks made by the Australian representative,
which have been more or less repeated by the United Kingdom
representative. It is evident that we need a number of organs to
carry cut the various functions listed in this Article, and the
amendments proposed; but I fail to see their connection with the
rest of the Organisation, and I wonder if the Australian Delegate is
not right when he expresses some doubt regarding the efficiency of
the work carried out by Commissions as they are described in the
Chapter. Therefore, I wonder if it would not be necessary to make
it clear whether there will be temporary or ad hoc special
Commissions meeting from time to time, or, on the contrary, standing
technical Commissions. There will be a number of recurrent
problems, and in the face of this kind of permanent situation, I
cannot imagine the creation of Commissions that will be likely to
interrupt their work from time to time.
We can, therefore, ask ourselves whether we have to deal with - 33 -
Commissions in the proper sense of the word or bodies of the
Organization consisting mainly of technicians. This question
raises another question: whether these technicians will be
officials of the Organization or not. I do not think that all
these questions can be solved here; but I should like to ask the
Chairman to stress these points to the sub-Committee and point out
to the Members of the sub-Committee, as already pointed out by the
Australian Delegate, that they require particular study.
CHAIRMAN: We have now had a most useful discussion of this
very important subject. We have been discussing the matter now
for two hours and a quarter. We have given the sub-Committee a
large amount of material for them to take into consideration and
digest with a view to reaching a reconciliation of the various
points of view which have been expressed in the Commission.
Therefore, if the Commision agrees, we will now refer this
matter to the sub-Committee. Agreed? (Agreed).
The only other point that arises in connection with Article 72
is Item No.5 on Page 16 of Document W/210: "The Secretariat points
out that perhaps the commencing words "The Conference shall
establish" should be changed to "There shall be" to conform with
Article 67". This is a matter of drafting which I would suggest
we should leave to the sub-Committee. Agreed? (Agreed).
Article 73 - Composition and Procedure of Commissions. In
reIation to paragraph 1, the United States Delegtion proposes
that a limit of not more than seven persons should be placed on
the composition of the Commission.
The Delegate of the United Kingdom.
Mr . J.E.S. FAWCETT (United Kingdom): We agree with that amendment.
E/PC/T/B/PV/15
V - 34 -
CHAIRMAN: The Delegate of the Netherlands.
Dr. S.J. Baron van TUYLL (Netherlands): I would like to
support the amendment of the United States Delegation. I would
like to consider this suggestion in the light of the discussion
which we have just had on Article 72. I believe that if the
Conference realises that only a small number of members is needed
in the Commissions, then it should not be too much concerned about
the institution of Commissions. If we give the number of seven,
then it may very well be that the Conference will decide on
establishing a Commission of perhaps only three persons, and that
is another reason why I think it is a very good thing to limit the
number of members to a figure not higher than seven.
E/PC/T/B/PV/15
V ER - 35 - E/PC/T/B/PV/15
CHAIRMAN: Any objections to the proposal of the United
States delegation?
Dr. W.C. NAUDE (South Africa): Mr. Chairman, I have no
objections, on the contrary I agree. It is merely to suggest that
the Sub-Committee might examine the possible need of making clear
that this should be referred to the more permanent Commissions.
Mr. A.H. TANGE (Australia): Mr. Chairman, we have doubts
about the wisdom of this amendment. The Australian delegate here
raised the whole question of the wisdom or otherwise of using the
general Commission structure, and he also referred to the possible
danger of specifying in great detail the functions of commissions
in the event that it was decided that the Commission structure was
the correct one, but in the light of that second objection we feel
that here again is a case where we are attempting, in the
constitution of the Organization, to lay down a specific rule which
except
cannot be altered/by an amendment to the constitution, and we would
feel that it was unduly restrictive. It may be found, under certain
circumstances, that we needed more than seven, in which case we
would feel that this was an unwise limitation to place upon the
Conference which should retain considerable flexibility within its
hands to organize its subordinate organs as may be required by the
activities of the Organization. For that reason we oppose the
amendment.
Mr. GEORGE HAKIM (Lebanon): Mr. Chairman, I would like to
support the point of view just expressed by the delegate of
Australia. It may be necessary to have more than seven for certain
Commissions. I have in mind the Commission for Economic Development
which may be established. In that case I think the experience needed
in that Commission to consider problems of development in various ER
-36 - E/PC/T/B/PV/15
parts of the world, may necessitate the increase of the number of
the members of the Commission beyond seven.
CHAIRMAN: Are there any other speakers?
I therefore suggest that this United States proposal be
referred to the Sub-Committee.
Mr. V. DORE (Canada): If this amendment should go through,
I believe that paragraph 2 would have to be modified.
CHAIRMAN: I do not believe the proposal allows for more than
seven, it could be less.
paragraph 4. The Secretariat suggests that . "The Chairman
of a Commission shall be entitled to participate, without the right
to vote, in such of the deliberations of the Executive Board and of
the Conference as are of concern to the Commission". Are there
any comments?
Mr. F. GARCIA OLDINI (Chile) (Interpretation): I should like,
Mr. Chairman, to know what the exact meaning of this amendment.
The New York draft reads: "The Chairman of each Commission shall be
without the right to vote,
entitled to participate,/in the deliberations of the Executive Board
of the Conference." I think that the Chairman of each Commission
will be sufficiently busy not to attend meetings which are of no
interest to him. But on the other hand, if this amendment goes
through, it will authorize the members of a given Commission to
declare that the matter is of no interest to the Chairman of another
Commission. - 37
M. KOJEVE (France) (Interpretation): I would just like to
say that I share the point of view of the Chilean delegate; it
would be more courteous not to assign the Chairnen of the Com-
missions through such a regulation.
CHIRMAN: After those comments, I tthik we can safely leave
it to the Sub-Committee to deal with the question of the Sercetariat
(The meeting agree
CHAIRMAN: Pra~rapgh 5. At the meeting of tn hCoaimttee the
delegates of Australia and South Africa felt this provision was
redundant in view of the provisions of Article 81. Th Seecretariat
agreed with this view.
Does any delegate disagree with the point of view of Australia
and South Africa?
I suggest therefore that the sub-Cotimee ttshould decide
whether c ort tohis provision isnec essary in view of the silence
which has reigned in this Commission.
(Th meeeting agreed)
CHAIRMAN: Article 74 - Genrale Functions of Commissions.
"The United Kingdom Dlegeation comments upon Artices74-77
that it is not clear whether the Commnisson ican initiate stu"eds
advice and recommendations or whether they can only act on the
instructions and within the terms of reference assigned to them by
the Conference or the Executive Board. It is assumed that the
former is intended, and that this will be clarified during the
discussion that will be necessary on the subject of the Commissions
and particularly of the Commission on Restrictive Buinesss Pzciraei
Dos thee Ubt;n -n 3;JKi delegate wish to speak?
/PC/TE/B/PV/
L. L 38 E/PC/T/B/PV/15
Mr. J.E.S. FAWCETT (United Kingdom): I do not think I need
add very much to our note. I think it is really a drafting point
that in Article 74 the Commission shall perform such functions as the
Executive Board may assign. Then the functions "shall include
those specified in Articles75, 76 and 77 respectively." This
rather suggests that the functions in 75 and 77 are really functions
which the Commissions may undertake only when they have been assigned
specifically. We do not think that is the intention. We believe
that Articles 75 and 77 lay down funct ions which the Commissions
can undertake on their own initiative.
I would suggest that the Sub-Committee might perhaps consider
whether it should not be made clear that the word "functions" was
used in 75 - 77, and in 74 V:. was laid down that the Conference
and Executive Board could assign specific tasks to the Commission
in addition to their general functions. We believe that was the
intention.
It I might add just one word, we oppose the Secratariat's amend-
ment in paragraph 2(a).
CHAIRMAN: There seems to be a drafting point which it is
necessary to examine in the text of Articles 74-77 to see that the
intention is clearly expressed, and therefore I propose that this
should be referred to the sub-Committee.
The same applies to the points raised by the Secretariat which
also require consideration from the drafting point of view.
Is it agreed that this should be referred to the sub-Committee?
M. F. GARCIA OLDINI (Chile): It goes without saying that the
part relating to the Commission on Economic Development should also
be added. 39 E/PC/T/B/PV/15
CHAIRMAN: We will be taking up that point when we deal with
Article 75, because we have a proposal from the Chinese delegation.
M. F. GARCIA OLDINI (Chile) (Interpretation): What I
meant to say was that in Article 74 each Commission is mentioned by
its name. Therefore the Commission on Economic Development should
also be referred to.
CHAIRMAN: If the Sub-Committee did not get that point, I am
sure the Legal end Drafting Committee will.
Article 75 - Functions of the Commission on Commercial Policy.
The Chinese delegate proposes a new Article to provide for the
Commission on Economic Development.
In view of the discussion which has already take place at the
Commission to-day I believe we can also refer the proposal of the
Chinese delegate to the Sub-Committee without further discussion.
The same applies to the proposal of the Australian delegate.
Dr. S. J. BARON VAN TUYLL: (Netherlands): My demand may be
unnecessary, but I would like to ask the sub-Committee to make contact
with the Committee on Chapter IV for the final drafting of the
functions.
L. J. 4 E/PC/T/B/PV/15
CHAIRMAN: The delegate of New Zealand.
MR. G . LAWRENCE (New Zealand): Mr. Chairman, in
connection with the present text of Article 75, sub-paragraph (a),
"The Commission on Commercial Policy shall have the following
functions: to advise and make recommendations to the Executive
Board on all matters falling within the scope of Chapter V", it
states in Article 67 on the Tariff Committee that that Committee is
given special functions in respect of paragraph 5 of Article 24,
and in Article 62 we see that the Tariff Committee has been
included as one of the principle organs. It would seem that it is
necessary to make some exclusion in respect of the functions of the
Commission on Commercial Policy so that duties assigned to the
Tariff Committee are excluded.
CHAIRMAN: The delegate of Australia.
MR. A.H TANGE (Australia): Mr. Chairman, may I add to what
the delegate of New Zealand has said: that you have, in Article 75,
a provision that the Commission on Commercial Policy is to advise
and make recommendations to the Execuxtive Board on all matters
falling within the scope of Chapter V; you have in Article 77,
sub-paragraph (b), a provision that the Committee shall advise and
make recommendations to the Executive Board on all matters arising
from the provisions of paragraph 4 of Article 30, which is also
in Chapter V.
That leads me en, Mr. Chairman to elaborate a little on the
point made by the Australian delegate earlier in this meeting,
namely, that we that we shall create considerable difficulty
for the Oraganization if we attempt to specify in articles 75, 76
and 77, and in any other Article dealing with the proposed Economic J. - 41 E/PC/T/B/PV/15
Development Commission, the precise range or functions of each of
these Commissions. As we see it, the position is that we say in
Article 74 that "The commissions shall perform such functions as
the Conference or the Executive Board may assign to them". That is
to say, the Conference or the Executive Board may add to the
functions of the Commission. You have an element of flexibility
there, but you say in Articles 75, 76 and 77 that each Commission
must perform the functions related to a particular Chapter, and we
understand that to mean that neither the Conference nor the
Executive Board may take away from the Commission a function which
is given to it by the Statute.
Now, that may well mean that you will have jurisdictional
arguments as between Commissions, in spite of the last sentence of
Article 74 which says "The commissions shall consult with such other
as necessary for the exercise of their functions''. Naturally, if
they are reasonable people they will consult together and the
difficulty of jurisdictional disputes may not arise, but one cannot
overlook the possibility that it would arise, and you would be faced
with the situation where the Conference and the Executive Board, who
clearly are superior bodies to the Commissions, nevertheless, would
be debarred by this Chapter from making a mutual adjustment in the
disposition of duties among what are essentially subordinate
organs of this Organization.
It is for that reason that we are disposed to suggest that, if
after discussion in Sub-Committee it is decided that a Commission
of the structure of this general type should be retained, serious
consideration could be given to deleting articles 75, 76 and 77.
That rather drastic surgical operation would not require many 42
J. E/PC/T/B/PV/15
consequential amendments to earlier Articles. It would simply
leave a position whereby in Article 74 "The commissions shall
perform such functions as the Conference or Executive Board may
assign to them", and that would leave the question completely open.
It would mean that the difficult problem of allocation would
have to be faced up to. We feel it does not have to be faced up
to now, Moreover, it would mean that having attempted to make
your allocation and, in fact, having made your allocation of
functions, you would see with the capacity of experience how that
allocation works, and if, after 12 or 18 months or two years, it was
decided that it would be better for this particular Commission to
take over from another some particular aspect of the work of the
Organization, the Conference or the Executive Board, by a very
simple act of amending its rules of procedure, could achieve that.
Under the present situation, neither the Conference nor the
Executive Board could do that because the Charter disregards it.
CHAIRMAN: Have any other delegates any remarks on the quest ions
involved in Articles 74 to 77? G.
E/PC/T/B/PV/15
-43-
With regard to the point raised by the
Netherlands Delegate, it is very necessary for the Sub-Committee
to pay careful attention to the Report not only on Chapter IV,
but also VI and VII, in considering these Articles.
I am sure we are very grateful to the New Zealand
Delegate and the Australian Delegate for having brought to the
attention of the Commission certain inconsistencies with
regard to the matters assigned to the various Commissions,
and that will also be taken into account by the Sub-Committee.
The only other points we have in relation to these
Articles are suggestions by the Secretariat, which I think the
Commission will agree are drafting points; and therefore, if
there is no objection, I would propose that these Articles 74
to 77, together with the proposals which have been submitted
relating thereto, be referred to the Sub-Committee.
Agreed.
The Delegate of Brazil.
Mr. MARTINS (Brazil) (Interpretation): Mr. Chairman,
if we work on the assumption that the Articles here will not be
maintained, I would not disagree with what the Australian and
New Zealand Delegate have proposed as to the suppression of
these Articles; but if, on the other hand, these Articles are
maintained, I would like to propose a modification of
77 - A sub-paragraph (a), which appears in
Document W/210 Rev.1 Add.1 on page 2. There we read:
The Commision on Economic Development and International
Investment shall have the following functions:
(a) To conduct studies relating to the promotion of
industrial and economic development and international
investment as provided for in paragraph 4 of Article 12. G E/PC/T/B/PV/15
- 44 -
I think that the reference to paragraph 4 of Article 12
is of a restrictive nature, and I do not see why we should only
refer to paragraph 4 of Article 12, but it ought to be "as
provided for in Article 12, Chapter IV."
CHAIRMAN: The Delegate of the Netherlands.
Mr. VAN TUYLL (Netherlands): Mr. Chairman, I have been
listening with much interest to what has been said by the
Australian Delegate. One solution for the difficulty he sees
is in the elimination from the Charter of Articles 75, 76 and 77.
I have Just been thinking if another solution is possible,
and I may perhaps suggest that the Sub-Committee considers the
other possibility of including in Article 66 a provision which gives
power to the Conference to make all such provisions and
regulations as are necessary to prevent over-lapping with regard
to Articles 75, 76 and 77.
CHAIRMAN: The Sub-Committee will take into consideration
the remark just made by the Netherlands Delegation, and also
in considering the United States proposal regarding the new
Article 77- A they will take into account the remarks just
made by the Delegate of Brazil.
The Delegate of Australia.
Mr. TANGE (Australia): If I may just comment on the
remarks of the Delegate of the Netherlands, I believe that a
solution might be found along the lines that he suggested; but
whether it would leave you with a suitable Draft is rather
doubtful. In effect you would be led into the position of
saying in one part of the Charter that certain organs shall
have certain statutory functions, and elsewhere, another superior
organ wil take them away.
That is the end we desire, but whether or not it would be
desirable drafting, if we conceive it that way, I am really
doubtful. E/PC/T/B/PV/15
CHAIRMAN: The Delegate of the Netherlands.
Dr. S.J. Baron van TUYLL (Netherlands): I only made
the suggestion, Mr. Chairman, because I was afraid that by
handing over the difficulty to the Conference they would be
faced by the same problem as we would be.
CHAIRMAN: Are we now in a position to refer these
Articles 74 to 77 with the proposals related thereto, to the
sub-Committee? (Approved).
There are no proposals with regard to Article 78. With
regard to Article 79, "The Director-General", "The-United States
Delegation commece that unless the responsibility for budget
preparations is clearly upon the Director-General, experience
has shown that this matter 'may fall between two stools.' The
regulations to be approved by the Conference under paragraph 1,
which are more flexible in their nature, can contain whatever
provision may be necessary in this respect. It is pointed
out that the Director-General is, in any case, under the
supervision of the Board. For these reasons the United
States Delegation proposes the following amendment of the last
sentence of paragraph 2 or Article 79 - 'He shall present
through the Executive Board an annual report to the Conference
on the work of the Organization and shall prepare the budget
of the Organization for submission to the Conference'" ,thereby
suppressing the wods "in consultation with the Executive Board".
Are there any comments on the proposal of the United States
Delegation?
The Delegate of Australia.
Mr. A . H. TANGE (Australia): Mr. Chairman, I think the
Delegate of the United States has raised a very important point,
45
V V.
and that is the role of the Executive Committee in the examination
of the budget. In my opinion, thc present draft is unsatis-
factory because 1 think it dodges the issue, in using the phrase
to the effect that the Director-General "shall in consultation
with the Executive Board. prepare the budget". That leaves
open the question whether it is nothing more than consultation;
it leaves open the question .as to how far the Executive Board
may interfere with the Director-General in the preparation of
the budget. It leaves uncertain the question of whether or
not the Executive Board is to approve the budget and send it
forward to the Conferernce with its approval.
Now, as I understand the United States authority it is
that the Director-General has compleve authority in the pre-
paration of the budget which he shall submit the Conference.
It is silent on the question of' whether or not he submits it
to the Executive Board. Should I ask the of the 0 the
United States whhe envisages that the a l ttorrec`e -Genvral
wouldcin fasentreotebudget to the Executive Board and, ard an
if so, how woe Execitivelative Board exprsss it-onponi"r tn
the budgWt? Vould it be byhatta king -to the budget, separately,
mments when it went forward to the Conference, or wouldT woul
ecutive Boarrdve Be havpower of amending the budgetthe bu
before it went to the Conference?:,-fo-
AN: The Delegate of the United States. -te-d
F. (United States): Mr. Chairman, we had we ha
rposes posos pesing this amendment. The first purposest, p&
was to maperfectly clear that the Directer-General had l h
the solonsibility !lfty of gettingudget together. cther The
second was to lhe question of broad supervision over the r tha
matter more flexible.Under paragraph 1, the Directer-Genera V. E/PC/T/B/PV/15
is subject to the supervision of the Board. Under the same
paragraph, his duties are to be determined in accordance with
regulations approved by the Conference. In that way, we
felt that both the Conference and the Board could, as experience
taught them, provide a method of dealing with the budget which
would be effective.
CHAIRMAN: The Delegate of South Africa.
Dr. W. C. .NAUDE (South africa): Mr. Chairman, I am sorry
to pursue this point, We feel strongly that it could be made
quite clear where the responsibility lies. Our own preference
is to put it something after this style, that the Director-General
shall prepare the budget of the Organization, and, upon approval
of the Execitove Npard. ive Bank> submit it to the Conference". we
reoognize, cf course, the point made by the United States
Dcie-ate. Tme sub-Conmittee will no doubt see to it that
prop.- arrangements are made, and I will not carry the
discyssion an- further.
CHAIRMLN: Are there any other comments?
Thu Delegate of Australia.
Mr. L.HAustralia): alia): Mr. Chairman, I am quite
satisfied planation ganation riveDelegate Dlt:6,tenif the Ur:lted
Staullyand filwy agree viith the objective they are aiming at.
There might bc a little difficulty with the final words of the
redraft2prebudget of areganization for su t'e FOr.mission
onference". to tinolercta. That seems to embody the idea that, in any
case, this bectudget of the Diror-General must go forward to the
Conference. That in fact may not be the position. There may be
undera decision made the regulations power of the Conference to
itthhoulde efct that ittoxecutive Board, and the
A7 V 48 E/PC/T/B/PV/15
Executive Board may then send it forward as its Budget. Perhaps
the sub-Committee might consider deleting the words after
"Organization", and it would simply read that the Director-General
"shall prepare the budget of the Organization". As it is,
other Articles clearly provide that it is the Conference which
must pass the budget, but the question as to the status in :
which it passes could be left open for determination by
regulations. ER
49 E/PC/T/B/PV/15
Mr. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
I think this is a very important issue and also that we must attach
the responsibility of preparing the budget to someone, and that
person must have the responsibility 'if doing the task. But I do
not grasp how the Director-General could prepare the budget without
consulting the Executive Committee or without getting the approval
of the Ececutive Committee. We have two means of solving the
problem. One is provided in the New York Draft Charter and the
other one by the United States proposal. Now, as regards the
Australian suggestion, I would like to-say that I do not understand
exactly how the budget could not be submitted to the Conference,
because the Conference, which is composed of all the members, has of
course, to take a decision on this budget.
Mr. A.H. TANGE (Australia): Mr. Chairman,. my suggestion to
delete the words was made in the light of Article 66 (7), which
implicitly says that the Conference shall approve the budget of the
Organization. Having that said there, it seems to-me that no harm
could be done in deleting the words, the reason being that I feel the
United States text, as it stands at present, might imply that the
budget estimate, having been prepared by the Director-General, must
be submitted to the Conference in the form in which it is prepared.
That was why I made the suggestion, but I should be quite happy to
leave this for further discussion in the Sub-Committee.
CHAIRMAN: Are we now in a position to rafer the United
States proposal to the Sub-Committee? Agreed. There are no
proposals with regard to Article 80.
Dr. W.C. NAUDE (South Africa): ir. Chairman, I wanted to ask
permission to argue the case for the deletion in paragraph 2. ER
50 E/PC/T/B/PV/15
Article 79, of the sentence: "The Director-General may initiate
proposals for the consideration of any organ of the organization".
If you give me the permission I could argue it now.
first of all
I must apologise/for raising this issue. I am a little
nervous as it is a very delicate matter to perform, and before I go
any further I would only like to have the assurance that I am not
directing my remarks at any particular person whatsoever. I have
the highest admiration for members of the International Civil
Service whose lives are not a bed of roses. The genesis of that
particular sentence is that, in the London Draft it provided that
"the Director-General shall have authority to initiate proposals ..."
In New York that language was slightly diluted and changed into its
present form. I confess that we are still a little worried about
it. We have taken the trouble to look up a few of the other
constitutions of other specialised agencies, and we find that, in
the FAO constitution, the language employed was that the Director-
General shall formulate for consideration by the Conference and the
Executive Committee on FAO, proposals for appropriate action in
regard to matters coming before them. This quite definitely limits
him to proposals specifically on matters which either the Conference
or the Executive Committee are actually considering. L. E/PC/T/B/PV/15
In the case of the United Nations Charter provision is made
for the Secretary-General to bring to the attention of the Security
Council any matter which may threaten the maintenance of peace.
In this case there is a very excellent reason for giving the
Secretary-General that authority in the case of a situation
threatening peace. I do not need to elaborate that.
My concern at the moment is with the risk that the Director-
General may initiate proposals which might be extremely unpopular.
He might initiate proposals on what might quite possibly be his
own set ideas which he wants to see carried out. It seems to us
you run the risk of undermining the authority and loyalty of Members
to the I.T.O. by giving a man authority to make proposals which may
run counter to the feelings of Members of the I.T.O. It should be
borne in mind that the executive organ of the I.T.O. will be the
Executive Board. They, as an executive body, will no doubt be able
to consider all proposals submitted to them, and if they approve, refer
them to the Conference. The Director-General will be constantly
in touch with them and he can submit his ideas to them and they can
be formulated into a proposal if they meet with the approval of the
Executive. As the Chief Executive Officers and Chief Advisers to
the Executive Board, they will no doubt attach considerable weight
to what he says.
I will conclude by saying I realise that perfection has never
yet been reached, certainly/in international affairs. We cannot
expect to have a perfect man in this position, but if we give him
this power it may lead to complications. Nevertheless, the Director-
General will, I am sure, be as good a man or woman as can, be found,
and by virtue of the powers he has under the Charter, he will be
able to propagate ideas , but if this phrase is retained it might
load to a difficult situation. I propose that we suppress the E/PC/T/B/PV/15
second phrase. .
CHAIRMAN: Are there any speakers on the proposition of the
South African delegate?
Mr. F. GARCIA OLDINI (Chile): I second this proposal.
Mr. A.H. TANGE (Australia): We feel something usdful would be
lost by the deletion of this. A good deal depends on one's inter-
pretation of the rôle of the Secretariat and the Director-General,
whether one regards them as performing a merely secretarial function,
4
or whether one considers they should perform a departmental function
in the sense that a national government does, We see no reason
why the Director-General should not initiate proposals for the con-
sideration of any organ of the association, indeed, he should be
encouraged in this. The main burden of the argument of the dele-
gate of South Africa seems to be that the Director-General might
make proposals which had political implications he had not foreseen,
and which might create embarrassment for the Members of the Organisa-
tion. The Members of the Organisation, the Executive Board, the
Commissions, and the Conference, are in a position to dispose quick-
ly of any proposal put forward by the Director-General ill-advisedly
In most cases his proposals would be discussed in private with the
exception of the Conference and there the possibility arises that the
Director-General might initiate a proposal which would perhaps create
embarrassment to certain Members by being placed on the agenda
of the Conference.
We feel this is a somewhat exaggerated fear. The Director-General
and his subordinate staff will presumably be chosen with due regard to
their sense of responsibility. We take it the Director-General in
any case will be appointed for a limited term, and that will have some
bearing on his sense of discretion in raising matters for consideration
52
L. E/PC/T/B/PV/15
From the general point of view, we feel that the Secretariat
of the International Trade Organization should be encouraged to
take a positive part in the preparation of policy proposals, in
the preparation of material placed before the supreme organs of
the Organization - the Executive Board and the Conference. One
undesirable element of deleting this sentence might be to preclude
the Director-General from making proposals to the Commissions of
the Organization, which are much nearer his level, and it would
seem undesirable that he would be precluded from putting proposals
to them.
For those reasons, Mr. Chairman, we would propose the
deletion of this sentence.
CHAIRMAN: In view of the fact that the proposal
submitted by the South African delegation does not meet with favour
probably
from the Australian delegation and /from other delegations here,
and also in view of the fact that no prior notice was given of this
proposal, and further, in view of the late hour, I would suggest
that we refer this subject to the sub-committee for them to study
and attempt to reconcile the opposing views, Agreed?
Approved.
Gentlemen, we have now concluded our examinat ion of
Articles 61 - 80, which were assigned to us by the Steering Committee
for consideration this week.
On Wednesday, July 2nd, we will commence our consideration of
Articles 81 - 89.
Before, however, we break up today, I would like to nominate
the sub-committee in order that it can get to work and deal with
the points which we have been considering this week. I would
nominate as members of the sub-committee representatives of eight
53
J. E/PC/T/B/PV/15
delegations. This is a larger number than usual - the Steering
Committee has recommended us to endeavour to confine
representation on the sub-committees to six, but in view of the
very general interest in this Chapter, I feel that eight would not
be too large a number for the purpose we have in view. This
sub-committee would also consider Chapters I and II, as well as
Chapter VIII, but it will not necessarily deal with the question
of Voting and Membership of the Executive Board. After we have
had a discussion of this important subject, Voting and Membership
of the Executive Board, we will consider which is the best way to
deal with them. It is proposed that. the sub-committee should
meet tomorrow in this room at 10.30 a.m., and they will elect
their own Chairman. I nominate as members of the sub-committee
representatives of the following delegations:- Australia,
Belgium, Brazil, China, France, Union of South Africa, United
Kingdom and United States. Is that approved?
Agreed.
There being no further business, the meeting is adjourned.
The meeting rose at 6:30 p.m.
54 |
GATT Library | bf056kz5085 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Fifteenth Meeting of the Tariff Agreement Committee held on Wednesday, 10 September 1947 at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, September 10, 1947 | United Nations. Economic and Social Council | 10/09/1947 | official documents | E/PC/T/TAC/PV/15 and E/PC/T/TAC/PV/14-15 | https://exhibits.stanford.edu/gatt/catalog/bf056kz5085 | bf056kz5085_90260054.xml | GATT_155 | 13,896 | 84,750 | UNITED NATIONS
ECONOMIC
AND
SOC AL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/TAC/PV/15
10 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
FIFTEENTH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON WEDNESDAY, 10 SEPTEMBER 1947 AT 2.30 P.M.
IN THE
PALAIS DES NATIONS, GENEVA.
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247).
Delegates are reminded that the texts of interpretations, which do
not pretend to be authentic translations, are reproduced for
general guidance only; corrigenda to the texts of interpretations
cannot, therefore, be accepted.
NATIONS UNIES E/PC/T/TAC/PV/15
CHAIRMAN: The Meeting is called to order.
I wish first of all to inform the Committee that the
Tariff Negotiations Working Party met this morning and, in
pursuance of the mandate given them by this Committee yesterday,
they considered the question of setting up a Legal Drafting
Committee.
The Tariff Negotiations Working Party wishes to suggest the
following names of persons they consider would be qualified to
act as a Legal Drafting Committee: -
Dr. Dorn (Cuba), Chairman; Mr. Catudal (United States);
Baron de Gaiffier (Belgium); M. Royer (France) and Mr. Whittome
(United Kingdom).
These five gentlemen would constitute the Legal Drafting
Committee. They would arrange their own meetings at whatever
time suited them, and it would be the responsibility of their
Chairman to arrange the meetings.
The terms of reference we would suggest would be similar
to those of the Legal Drafting Committee which considered the
Draft Charter, with the qualification that the major responsibility
for seeing that the French text conforms to the English text
should rest with the representatives on the Legal Drafting
Committee of the French-speaking Delegations.
We also felt it was desirable to call the attention of the
Legal Drafting Committee to the fact that it is, of course,
understood that those Articles which are common to the Charter
and the General Agreement should not deviate in respect of their
texts except to the extent necessary to adapt the text of an
Article in the Charter to the General Agreement.
S - 2 - 3 E/PC/T/TA&/PV/15
Are there any comments on the proposal of the Tariff
Negotiations Working Party?
Does the Committee agree with the names proposed for the
composition of the Legel Drafting Committee?
Is the Committee also in agreement with the terms of
reference of the Legal Drafting Committee?
(Agreed )
I will therefore ask Dr. Dorn to act as Chairman of the
Legal Drafting Committee and to take the responsibility of
calling the first meeting when he considers it necessary.
At our meeting yesterday we had decided to defer
further consideration of Paragraph 1 of Article XXVII until
the Australian Delegation had had an opportunity of submitting
a revised text in the light of the discussion which took place
at our meeting yesterday. We will therefore now take up
Paragraph 2 of Article XXVII.
Are there any comments on this paragraph?
S P. 4 E/PC/T/TAC/PV/15
Mr. H. M. CATUDAL (United States): Mr. Chairman, is seems to
me there is a slight gap in this paragraph, rather similar to the
gap in Article XXIV pointed out by the French Delegation I believe;
it says "Other amendments to this Agreement shall become effective
in respect of those contracting parties which accept them upon
acceptance by two-thirds of the contracting parties", but it says
nothing about when they become effective, after they have become
effective for the two-thirds. I wonder if we could not include
the phrase:
"and thereafter for each other contracting party upon
acceptance by it",
the language that is in the Charter now.
CHAIRMAN: Are there any comments on the suggestion of the
United States Delegate?
The Delegate of China.
Mr. D.Y. DAO (China): Mr. Chairman, we have some difficulty
about the first sentence of paragraph 2.
First we find that there is a difference in the procedure for
amendment to, say, Article I of the Agreement and to the
corresponding Article in the Charter which I think is Article 16,
and which could be amended by the acceptance of two-thirds of the
~~~~~~~~~~l ;T
meeber8. Here woaprovide that en amendment to Artecle I could b
effective upon acceptance by all of the contracting parties. I
thnk the same difficulties as those which we tried to avoid in
respect of Part II by the use ofuautomatic sapersession will arise
if the amendment to the provision in the Charter is carried by a
two-thirds acceptance and the corresponding Article in the agreement
cannot be amended except by unanimity. P. 5 E/PC/T/TAC/PV/15
The second difficulty is this; according to Article II the
Schedules will be considered as an integral part of Part I. Now,
amendment to Part II will require unanimity. We see that exceptions
are made in paragraph 4 in respect of paragraph 4 of Article II and
Articles XXV and XXVI, but under Articles XVII, XVIII and XXI
actions may be taken under these provisions which may result in the
modification or withdrawal of concessions provided in the Schedules.
Then under these three Articles actions may be approved by
contracting parties, presumably by a simple majority, where here we
say that amendments to Part I which we believe will include the
Schedules could be made effective by acceptance of all contracting
parties. So we find there is an inconsistency between this first
paragraph and the other three Articles which I mentioned, namely
XVII, XVIII and XXI.
In our opinion we think that, with regard to the first
difficulty, probably procedures for amendment to Part I could run
along the same lines as the second sentence, which I believe
corresponds to the similar provisions in the Charter with regard to
amendments, that means acceptance by two-thirds of the members or
two-thirds of the contracting parties.
As regards the second difficulty, we think something can be
added to paragraph 1 saying that "Actions taken under paragraph 4 of
Article II or under Articles XXV and XXVI, or under Articles XVII,
XVIII, XXI which may result in the modification or withdrawal of
concessions provided in the Schedules ....." I think the second
difficulty may be met by some addition to paragraph 4.
CHAIRMAN: Are there any other comments?
The Delegate of the United States. P. 6 E/PC/T/TAC/PV/15
Mr. H.M. CATUDAL (United States) : I am not sure I understand
the first point raised by the Delegate of China, but in regard to
the second point it seems to me there may be two answers: one, the
Agreement already provides for certain action to be taken which
may result in a modification of the Schedule. If it is felt that
must be specifically covered here, and avoid the condition of
unanimity, it seems to me that the first sentence of paragraph 2
should read:
"Except as otherwise provided for in this agreement,
amendments to Part I ..... " and so on.
But I think that the real answer here is that amendments here look
toward amendments of the Schedules, which amendments are not
specifically provided for in the Agreement.
CHAIRMAN: Are there any other comments?
Dr. H. DORN (Cuba): I agree with the Delegate of the United
States, Mr. Chairman, that it would be very useful to add "Except
as otherwise provided for in this Agreement"; but then I think we
would have to adapt paragraph 4 which gives a specific exception
about actions under some paragraphs and Articles of this Agreement.
to
Perhaps it would be unnecessary to add/paragraph 4 if we would say
generally "Except as otherwise provided for in this Agreement."
The second question, the first raised by the Chinese Delegate,
seems to me to be connected with a more general question. Part I
as it stands now is regarded as a special agreement which has
nothing to do, so to say, with the Charter, because only Part II
shall be eventually superseded, and therefore I think that is a
special disposition regulating this part of the Agreement which
stands on its own feet. Therefore I do not think that it would
be contrary to the Charter if you were to provide for unanimity in
order to change Part I. P. E/PC/T/TAC/PV/15
CHAIRMAN: The Delegate of China.
Mr, D.Y. DAO (China): Mr. Chairman, my suggestion that the
same procedure should be followed in respect of amendments to Part
I is because I find that the reason why we accept the idea of
automatic supersession of Part II is to avoid a situation in which
a country, being both a party to the Genereal Agreement and a Member
of the ITO, finds that it has to accept different obligations.
That is why we accepted the idea of automatic supersession of
Part II.
Now, Part I contains two Articles: the first Article corresponds
I think, to Article 16 in the Charter. This Article could be
amended by the acceptance of two-thirds of the members. Here we
say that this Article I could not be made effective except by
unanimity. I suppose if one-third of the members which did not
accept the amendment to the provisions of the Charter could object
to the amendment introduced here to Article I of the Agreement,
therefore amendment to Article I of the Agreement could not be
effective, thus resulting in a difference between Article I of the
Agreement and Article 16 of the Charter. Therefore to avoid such
a situation I would suggest that the same procedure should be
followed in the case of amendment to Article I of the Agreement as
In respect of Article 16 of the Charter, taking place along the same
lines as the amendment submitted.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Speaking subject to
correction, I would like to state my understanding in this matter.
Part I of this agreement is meant to be a provision to which are
attached the Schedules embodying results of the tariff negotiations 8
P. E/PC/T/TAC/PV/15
which have already taken place. Those negotiations have taken
place specifically on the base of the provisions about the Most-
Favoured-Nation treatment and so on which will be embodied in
Part I. There is nothing in the Charter to which one can attach
the Tariff Schedules already negotiated. The Charter provisions
only look to future negotiations. Therefore one has to have
something to which the results already achieved may, so to speak,
be attached. That is the reason for the provision in Part I,
and, just as it is contemplated that, subject to such special
rules as are made, the contents of the Schedules shall continue
unaltered, so it is necessary to provide that the base on which
they are made and attached shall also remain unaltered. For
that reason I think it is right that Part I should only be
changeable by unanimity and not by a two-thirds majority. 9
V E/PC/T/TAC/PV/15
CHAIRMAN: The Delegate of Czechoslovakia.
Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I feel
that we are putting an extremely complicated construction upon
something which is, to my mind, extremely simple, and I would go
to the basic principle of international law - not because I am so
keen on lawyers, solicitors and so on, but because I think that
international law is essentially full of wisdom. There is one
basic principle - that is, that when two treaties made between
the same States at different dates conflict, the latter treaty
prevails, it being assumed that it is in substitution for the
earlier treaty.
To my mind, this principle applies not only to Part II but
also to Part I and Part III of our Tariff Agreement, because if
all the present countries sign the Charter at Havana, it means
that there is unanimity that some rules other than those in
the Tariff Agreement should apply. This principle also applies
to Article XXIX, where we read "This Agreement shall supersede
any prior international obligations between contracting parties
inconsistent therewith". I think it is entirely unnecessary,
because it is self-evident and, to my mind, anything we say
here has no legal value, because as soon as the present countries
agree and sign the Charter, it will be the Charter which governs
the relations and not the Tariff Agreement.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I think
that the Czechoslovak Delegate has over-simplified the problem.
There are cases where the provisions of two treaties do not clash
and can exist simultaneously, and it is certain that if the 10
V E/PC/T/TAC/PV/15
provisions of two treaties were to clash, then the rule which was
stated by Mr. Augenthaler would apply, but we would be faced with
another difficulty; in the case of the date of the Charter and
the date of the Agreement, to know which would prevail. It will
not be the date of signature of the Agreement or of the Charter
which will be taken into account, but the date of entry into force
of the Agreement or of the Charter, and therefore it is quite
possible that the Charter will enter into force before the
Agreement, and the difficulty which would face us would not be
the difficulty stated by Mr. Augenthaler, but the opposite one.
Now, as to matters of substance, there are two questions.
One relates to Part I and the other relates to the different
points which were raised by the Chinese Delegate.
As to this question relating to Part I, we are discussing here
a multilateral agreement, and although it is a multilateral
agreement it is one of a type and only one of many trade agreements.
Therefore, the rule must be the rule applied in ordinary trade
agreements -that is, that these trade agreements can only be
modified with the unanimous consent of the parties taking part in
them.
Therefore, it is the normal rule which is followed here
regarding Part I, and it is the exceptional rule which is followed
regarding Part II. We have taken an exceptional rule in the case
of Part II because there are exceptional circumstances which may
justify the supersession of these provisions by the provisions of
the Charter. But it is certain that if an important amendment
was presented to Article 16 of the charter -let us say, for
instance, the limited maintenance of preferences, no one could
allow Article I to apply as it stands now, and this Article should 11
V E/PC/T/TAC/PV/13
be motified. It seems to me that the problem is fairly simple
here, for when the amendments would bring about essential
differences then, of course, the rule of unanimity would be
required; but when these amendments would only bring minor
differences, then it is certain that the Delegations would not
object to minor modifications of these Articles.
Regarding the second point-that is, the observations made
by the Chinese Delegate relating to Article XXVII and other
provisions of various Articles of this Agreement, I think that
here we can have two solutions. We can adopt the suggestion
made by the United States Delegate and supported by the Cuban
Delegate, to insert the words "as otherwise provided for
elsewhere in this Agreement"; or we can state that the provisions
of different Articles in this Agreement do not conflict with
the provisions of paragraph 2 and shall not be considered as
amendments to the provisions of the Agreement.
I do not, however, think that we can combine the two things,
because if we say that these provisions do not constitute
amendments to the provisions herein stated, we have no amendments
and we cannot apply the provisions of paragraph 2. Nevertheless,
a difference should be made. The Chinese Delegate spoke of
amendments, and he mentioned cases of the suspension or withdrawal
of the provisions of the Agreement or the suspension of concessions.
I think that is something quite different, because amending the
Agreement means amending the text of the Agreement, and the
other cases - withdrawal or suspension - are matters of fact
which have to be dealt with in a slightly different way and from
a juridicial point of view. I think that the difference ought
to be stated. 12
V E/PC/T/TAC/PV/15
CHAIRMAN: Are there any other comments?
Dr. H. DORN (Cuba): Mr. Chairman, may I just draw attention
to one consequence of paragraph 2, if we have in paragraph 1
the supersession of the wording of the Agreement by the Charter?
As it stands now, the Charter would beedecisive in regard to
Part II and you would have the situation that possibly an
Article of the Charter would be changed later on. Then you would
have to take over in the Agreement the new wording, as amended,
of the Charter. The wording of paragraph 1, as it now stands,
states: ...superseded by the provisions of the Charter for such
time as the Charter remains in force". That would mean that
,,te, changed wording of the Charter would have to be applied,
and a conseencpme of paragraph 2 would be that the coincidence which
you have created through paragraph 1 could be destroyed by the
second phrase of paragraph 2, becaus ethere would be the
possibility of changing the wording of Part II on the basis of
this phrase. I think that these two provisio stare not compatible
with each other. Therefore, I think that the formulation of
paragraph 2 will depend upon the definite formulation to be found
for paragraph 1.
CHAIRNMA: The Delegate of the United Kingdom.
Mr. R J. SHACKLE (United Kingdom): I must say that Iodbuht
whether we need be greatly exercised about the apparent
possibility of conflict to which Mr. Dorn has called attention.
It seems to me that these two provisions of the Article -
paragraph 1 and the second sentence of paragraph 2 - are mnalt
to operate at different times.
Paragraph 1 is on the assumption that the Charter is in
force and that supersession has taken place. The second sentence E/PC/T/TAC/PV/15
of paragraph 2, on the other hand, if I understand rightly, is
meant to apply during such time as that has not happened - a
time when the General Agreement is in operation but the Charter
has not yet come into operation. Now, we do not know whether
it will be a long time or a short time, but however it may be,
there is always the possibility that during that time there will
be some need to amend Part II of the Charter as it stands, and
this simply enables that to be done. I should have thought that
from the moment the Charter had come into force and had been
agreed, its provisions should supersede Part II, and the second
sentence of paragraph 2 would cease to operate.
V 13 14
J. E/PC/T/TAC/PV/15
CHAIRMAN: The Delegate of Cuba.
DR. H. DORN (Cuba): I agree with the Delegate of the United
Kingdom that one should arrange paragraph 2 in this sense with
regard to Part II, but at all events it would be necessary to express
this idea and say, for instance, "as long as the Charter is not yet
in force and with regard to Part II", but then we would have no
provision at all for Part III, because we speak of Part I in the
first sentence and we would speak, if we follow the idea of the
Delegate of the United Kingdom, of Part II, but then we would have
no provision at all for Part III.
Therefore, I think, at all events, that we will have to change
the wording in order to make clear that, as far as Part II is
concerned the sentence would only apply as long as the Charter is not
yet in force, and then we will have to find a solution for Part III.
CHAIRMAN: I should have thought that in the way the text reads
now it is quite clear that the words "Other amendments" apply both
to Part II and to Part III. We want to have a provision to enable
Part II to be amended as long as Part II is part of the Agreement,
but paragraph 1 provides that when Part II is superseded by the
Charter it is suspended, that is, Part II is no longer a part of the
Agreement, it is suspended. It may be put back into the Agreement
if the Charter ceases to be in force, but otherwise Part II is
Suspended. Therefore, the wording we have now really takes account
of all eventualities and I think if we start trying to define it we
might get into difficulties. 15
J. E/PC/T/TAC/PV/15
DR. H. DORN (Cuba): I agree completely with you, Mr. Chairman,
but only if we maintain paragraph 1 as it stands. Therefore, I
we
have permitted myself to say that if/change paragraph 1 we will have
to adapt paragraph 2 to comply with paragraph 1. As it stands
now, it is quite clear because we have mo Part II as long as the
Charter supersedes Part II of the Agreement.
CHAIRMAN: Could we deal with paragraph 2 on the assumption
that paragraph 1 will not be changed substantially, in that particular
sense to which we have been referring, from the text as it is now
given, because I notice that the Australian proposal which we
considered yesterday also has the words: "Part II of this Agreement
shall be suspended and superseded". I think that point is even
covered by the Australian amendment, and so I think we can consider
this paragraph 2 now on the basis that there will not be any
substantial change so far as that point is concerned in paragraph 1.
The Delegate of China.
MR. D.Y. DAO (China): Mr. Chairman, I entirely agree with
Mr. Shackle when he says that the tariff negotiations here are
conducted on the basis of that most-favoured-nation treatment. We
are not questioning this Article 1, what we are worried about is that,
as there is a difference of procedure for amendments, this difference
of procedure may result in the difference of the two corresponding
Articles, one in the Agreement and one in the Charter.
Now, according to Dr. Augenthaler, it would be quite alright
if the Charter comes into force after the Agreement and then the
situation would not arise, but there is a possibility that the
Agreement may come into force after the Charter and then the difficulties
will still be there. That is why we suggest that, in order to 16
J. E/PC/T/TAC/PV/15
facilitate amendment to Article I and Article XVI without difficulty,
the same procedure of amendment is provided for in this Agreement as
is provided for in the Charter.
As to the modification of Tariff Schedules which may result
from action taken under provisions, say, under Adjustment for
Economic Development and Emergency Action and Nullification or
Impairment, I think the case could be met by adding something to
paragraph 4 of this Article so as to make exceptions to the procedure
laid down in paragraph 2. As to any amendment to these Articles,
we are quite satisfied with the provisions of the second sentence
of paragraph 2.
CHAIRMAN: The Delegate of China has proposed that amendments
to Part I of the Agreement should also become effective upon
acceptance by two-thirds of the contracting parties. Is that the
proposal of the Chinese Delegation?
MR. D.Y. DAO (China): Yes, Mr. Cha irman.
CHAIRMAN: Do any other Delegations wish to speak on the
proposal of the Chinese Delegation ?
It would not appear that the other Members of the Committee
support the proposal of the Chinese Delegation. I therefore think
we might take up the suggestion of the United States Delegation with
regard to a drafting point to add to the last part of this paragraph
the words "and in respect of any other contracting party upon
acceptance by it"
MR. H.M. CATUDAL (United States): The words were "and
other
thereafter for each/contracting party upon acceptance by it". It 17
J. E/PC/T/TAC/PV/15
simply fixes the date.
CHAIRMAN: Are there any comments on the proposal of the
United States Delegation?
Are there any objections to the proposal of the United States
Delegation?
The Delegate of Cuba.
DR. H. DORN (Cuba): May I only hear the full wording as
proposed by Mr. Catudal.
CHAIRMAN: It is to add at the end of the paragraph "and
thereafter for each other contracting party upon acceptance by it".
Is that agreed?
The Delegate of Chile. S 18 E/PC/T/TAC/PV/15
Mr. F. Garcia OLDINI (Chile) (Interpretation): Mr.
Chairman, up to now I did not wish to intervene in the discussion,
but I have listened most carefully to the debate which has taken
place. If I did not intervene it was because our Delegation has
stated more than once that we are opposed to a solution which
did not take into account the principle of automatic substitution
of the provisions of the Agreement by the provisions of the
Charter.
We could perhaps accept that the provisions of the Agreement
be substituted by the provisions of the Charter after a
decision taken by the vote of a simple majority, but of course
the Chinese proposal would nevertheless be better than the
rule which is stated here, the rule of unanimity, which,
as I said yesterday, corresponds in fact to adopting a veto
rule.
I have not been able to understand, all through the
discussion, why certain Delegations resisted the automatic
replacement of the provisions of the Agreement by the provisions
of the Charter. It has been said that if we adopted such a
principle then we would be adopting something which is not yet
known and the results which have been achieved here through the
tariff negotiations might be jeopardized by the results of the
forthcoming Havana Conference. But it seems to me that what we
are leading up to here is the inevitability of the provisions
of the Agreement and of the text of the Agreement.
I wonder if we could not find another way by which we could,
at the same time, maintain the provisions of the Charter and more
or less give a safeguard to those who fear the results of the
Havana Conference and, on the other hand, make it possible to
amend these provisions. 19
S E/PC/T/TAC/PV/15
In the Chartar it has been stated, in various provisions,
that if the advantages acquired through the tariff negotiations
are withdrawn, a certain procedure is to be followed, that
measures under this procedure can be taken against the Member
withdrawing the advantages, and that the other Member may also
be able to withdraw the concessions he had made. This would
be done in order to restore the balance of give-and-take which
had been established.
I wonder if we could not find out and devise a similar
provision here in this part of the Agreement. We could
perhaps at the same time provide for a text which would write in
the principle of automatic substitution of the provisions
of the Agreement by the provisions of the Charter, or at least
the substitution after a vote taken by a simple majority of the
Members, and, on the other hand, take into account the situation
prevailing at the time.
Therefore - I am not proposing a draft but just stating a
principle - if we followed the principle of substitution of the
provisions of the Agreement by the provisions of the Charter, it
might result in a lose of the advantages acquired through
the present negotiations, and it could be that a Member, with
the agreement of the Committee - that is to say, with the agreement
of the contracting parties - might take measures against those
Members through whom they might suffer that loss of advantages.
They might take measures to restore the balance of give-and-take,
as I have said, and, if a contracting party wished to do that,
such measures might be taken.
I think that if we adopted a provision of this kind, we could
avoid the difficulties which are now confronting us and we would
be able to reconcile the logical order with the natural order which
we are now destroying or ignoring. At the same time we could 20
E/PC/T/TAC/PV/13
give satisfaction to these Delegations which are not willing to
risk waiting for the results of the Havana Conference and to those
Delegations which think that the principle of automatic sub-
stitution is essential if the sims which prompted them to take
part in these negotiations, and which they hope to see carried
out, are to be achieved.
CHAIRMAN: Are there any other comments on the question of
these amendments.
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairmen, as M.
Royer pointed out, I think there are really two alternative, ways
in which we could deal with the question of chances which may be
made to these provisions; that is to say, two alternative ways
of treating the question of whether they are to be regarded as
a mendments or not.
The first relates to the principle at present embodied in
Paragraph 4, enumerating certain provisions and saying that
action taken under them shall not be considered as an amendment.
The other way is the one suggested by the United States Delegate,
namely, to add, at the beginning of Paragraph 2, the words "As
otherwise provided for in this Agreement.
I think I agree with M. Royer that we could take one way or
the other, but not both. I am a little inclined to feel that the
suggestion which the United States Delegate has made is perhaps the
:better of the two, because it seems to me that the enumeration in
Paragraph 4 may possibly not be exhaustive. It is difficult to
say, I think the paragraphs mentioned in the present Paragraph
4 are on the principle that they are cases where there may be
permanent modifications made to the Schedules. The Schedules are
part of this Agreement; therefore it might be argued tht in
making permanent modifications you are amending the Agreement. 21
S E/PC/T/TAC/PV/ 15
I think I see why those particuler items have been referred
to in Paragraph 4, but I am not sure that that enumeration is
exhaustive, because you might have action under Article XVII -
that is to say, the let-out for economic development - which
would also result in permanent modification of the Schedules.
If so, the question arises whether Article XVII should be added
to the enumeration.
I do not think there is any necessity to mention this
Article again, because under both those provisions the action
would be purely temporary; it would be merely suspension.
There is a sufficient margin of doubt. For that reason, I
rather prefer the omnibus form of words involved in Mr. Catudal's
amendment. If we accept that, the I think we should delete
Paragraph 4.
There is just one other thing: I think we ought to add
the word "and'" between the first and second sentences of Paragraph
2. Mr. Catudal's amendment would then read as follows: "Except
as otherwise provide for in this agreement amendments to Part
I of this Agreement or to the provisions of this Article shall
become effective upon acceptance by all of the contracting
parties and other amendments to this Agreement shall become
effective in respect of those contracting parties... " and so on.
CHAIRMAN: Is the Committee in agreement with the proposal
Just made by Mr. Shackle on the basis of the proposal first
suggested by Mr. Catudal?
The Delegate of China.
Mr. D. Y. DAO (China): Mr. Chairman, although I suggested
adding something to Paragraph 4 to cover the cases I mentioned, I
am quite prepared to accept the amendment suggested by Mr. Catudal
and Mr. Shackle.
_ - I_ I - S 22 E/PC/T/TAC/PV/15
CHAIRMAN: Are there any other comments? Are there any
objections to the proposal of Mr. Shackle?
Therefore the proposal of Mr. Shackle is agreed.
We have now a small consequential amendment to deal with,
which was proposed by the United Kingdom Delegation. It results
from the action which we took yesterday of providing for a
separate Article to cover Paragraph 1, headed: "Suspension and
Supersession." There would then be a new Article commencing
with Paragraph 2, headed: "Amendments." As a consequence of
that, the United Kingdom Delegation suggests that after the
words "provisions of this Article," in the second line, there
should be added "or of Article XXVII."
Is the Committee in agreement with that proposal?
M. ROYER (France): (not interpreted).
CHAIRMAN: The way it would now read, if this proposal is
accepted, is: "Except as otherwise provided for in this Agreement,
amendments to Part I of this Agreement or to the provisions of
this Article or of Article XXVII ..."
Is that agreed?
M. ROYER (France): (Not interpreted).
CHAIRMAN (In reply to M. Royer): Yes.
There would not be two sentences; the word "and " would come
between ". . . contracting parties" and "other amendments . . ."
in the third line. At the end would be added the wording proposed
by the United States Delegation, reading as follows: "and there-
after for each other contracting party upon acceptance by it."
Is the text of Paragraph 2, as now amended, approved?
(Agreed).
As a consequence, Paragraph 4 will be deleted.
We now come to Paragraph 3. The Indian Delegation suggests
the deletion of the second sentence of this paragraph.
The Delegate of India. 23 E/PC/T/TAC/PV/15
Mr. B.N. ADARKAR (India): Mr. Chairman, we suggested the
deletion of the second sentence because we thought that somehow it
is in some way inconsistent with the second sentence of paragraph 2.
Under the second sentence of paragraph 2 the contracting parties
can refuse to accept a particular amendment and the amendment will
then not become effective with respect to such parties. Under the
second sentence of paragraph 3 the contracting party which fails to
accept an amendment can be expelled, more or less, from the
Agreement. This provision contained in paragraph 3 involves the
element of coercion and we thought that it would be undesirable,
after having given the contracting parties the option to decide
which amendment they will accept and which they will not, to retain
this element of coercion in paragraph 3. It has the effect of
takingaway from the contracting parties the right which paragraph 2
confers on them. We are aware that there is a similar provision
in Article 95 of the Charter. We do not like that provision as
far as the Charter is concerned and thought we should take this
opportunity of bringing this matter to the notice of this
Committee.
Moreover, although it is true that, so far as Part II is
concerned, the provisions of the Agreement should as far as possible
correspond to those of the Charter, the same necessity does not
arise in regard to Part III. We could devise for Part III
provisions which are different from those of the Charter.
At any rate if this suggestion of ours does not meet with the
acceptance of the Committee, we would suggest incorporating here in
the General Agreement provisions which are at least similar to
those of the Charter, that is the provisions of Article 95. Under
Article 95, although it has been provided that a Member not
accepting an amendment to the Charter might in certain circumstances
P. 24
P. E/PC/T/TAC/PV/15
be excluded from the Charter, a provision has been made whereby
the Conference may, by a majority vote of two-thirds of the members
that
present and voting, determine/this particular provision shall
prevail with respect to any such Member.
There is also a further provision inALrticle 95 that a Member
not accepting an amendment shall be roee to withdraw from the
Organization upon the expiration of six months from the date upon
which written notice of such withdrawal is received by the
Secretary-General. It seems to us thtT either we should delete
the second sentence of paragraph 3 or else if the retentionofb this
:oecoive element is considered necessary for the purpose of teo
General Agreement then we should at least amplify the provisions
of paragraph 3 on the lines of paragraph 2 of Article 95.
A LAHJIRMA: jre there any comments on the proposal of the
Indian Delegation?
The Delegate of Norway.
..MEMr. J Vf3LANDER (Norway): Mr. Chairman, I think there is
much in the Indian proposal here. As far as I che see, t1h second
sentence of paragraph 3 would provide that the Committee - I take
.it by a majority decision - could make a decision which would lead
tothe exclusion of one party, whilst the second sentence of
paragraph 2 provides for a two-thirds majority for amendments other
than those to Part I becoming effective. I would therefore think
that there is something tofbe said aor the Indian proposal on this
particular paragraph. I am not quite hertain wlEther it would be
right to delete completely the sentence in question but I think
there is need for some alteration to be made so that paragraph 2
and paragraph 3 would become consistent.
CHAIRMAN: Any other comments?
The Delegate of the United States. 25
P . E/PC/T/TAC/PV/15
Mr. H.M. CATUDAL (United States) I think also that the
language of Article 95 in general is preferable to the language
that is at present in the General Agreement. It would need certain
modification of course, to make it conform to the form of the
General Agreement.
The reason why I think it preferable is that it is clear that
there may be some amendments which are made which are of such
importance that it is necessary that all the contracting parties
agree to those amendments if they are to continue to be part of
this Agreement but those are the exceptional cases. As the
language now stands it does seem to give the impression that at any
moment the Committee may by some arbitrary action force a Member
to get out if he has not agreed to even a minor amendment.
Having said that, I might add that I do not agree with the
proposal of the Indian Delegation, however, that the final sentence
of paragraph 2 of Article 95 of the Charter be included in this
proposal: that was the provision which said that a Member which
did not accept an amendment any amendment - should be free to
withdraw from the Organization. It seems to me that here the
tariff concessions and other concessions in the Agreement are being
made for a period of three years and that if an amendment were
adopted , even a minor amendment, which a contracting party did not
accept, it would then have a change to get out of the tariff
obligations.
So my proposal would be to take the second sentence of paragraph
2 of Article 95 and adjust it to replace the language of the second
sentence of paragraph 3, to read something as follows,
"The Committee may decide that any amendment under this
Article is of such a nature that all contracting parties
which have not accepted it within a time specified by the 26
P. E/PC/T/TAC/PV/15
Committee shall be required to withdraw from the Agreement;
providing that the Contracting Parties or the Committee may,
by the affirmative votes of two-thirds of the parties present
and voting, determine the conditions under which this
requirement shall be waived with respect to any such
contracting party".
CHAIRMAN: The Delegate of India.
Mr. B.N. ADARKAR (India): Mr. Chairman, I would just like to
add a few words on the desirability of including in the General
Agreement the last sentence of paragraph 2 of Article 95 which
gives the right to a member not accepting an amendment to withdraw
from the Organization, a right which corresponds to the right of
the Organization to exclude such a member. I would only point
out to the Delegate from the United States that this process
actually enhances the power of the individual Member and particularly
an influential Member, a Member who is very important in
international trade, to influence the nature of the amendments which
are likely to be adopted by the majority.
I would illustrate my point by a simple example. Supposing
Part II of the Agreement is not superseded by the Charter and if,
let us say, the provisions of the Agreement concerning Economic
Development are amended by the majority or by two-thirds majority -
such a majority might be conceivable as the membership of the
Agreement increases - if the provisions of the Agreement concerning
Economic Development are amended by a two-thirds majority on lines
which are not acceptable to a Member like the United States, such
amendments will certainly not be applicable to a Member like the
United States, but in any case those amendments were not intended
to apply to such a Member but only to Members which are interested
in securing further economic development. P. 27 E/PC/T/TAC/PV/15
Now, although such amendments are not applicable to the United
States, still the standing of the General Agreement taken as a
whole may in the view of such a Member substantially diminish
as a result of the carrying out of those amendments. In such a
situation a Member like the United States would be in a position
to threaten to withdrew from the Agreement and thus influence the
prospects of such amendments being carried out. It is therefore
a privilege which is of value to Members because it gives them a
right which corresponds to the right given to other contracting
parties to exclude such a Member. 28
V E/PC/T/TAC/PV/15
CHAIRMAN: The Delegate of the United States.
Mr. H.M. CATUDAL (United States): Mr. Chairman, I recognize
that the Delegate of India has a point. I feel that I have made
a point, too, which, it seems to me, overweight the other point -
namely, that by refusing to accept even the most minor amendment,
a country would be able to turn this three-year Agreement,
insofar as the tariff concessions are concerned, into a very
short-term Agreement, and so get out of it. I think that is
important.
In the second place, with respect to the particular point
made by the Delegate of India, as he has pointed out, a country
which does not accept such an amendment would not be bound, insofar
as it is concerned, by the amendment. Therefore, it could only
be indirectly a factor. It is true that it might be a factor
in the sense that the whole Agreement might now become less
attractive to it than before. I should be inclined to believe
that in those circumstances there would be sufficient recourse
under the nullification and impairment provision for it to get
satisfaction. In ether words, I think we would be prepared to
take the risk which is suggested.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): I seem to remember a
French maxim about the better being the enemy of the good, and
on that basis I rather feel that the good consists in adding
the second sentence of paragraph 2 of Article 95 with its
proviso, and the better consists in adding also the last
sentence. I would therefore suggest adding thesecond sentence
with the proviso, but not the last sentence! V 29 E/PC/T/TAC/PV/15
CHAIRMAN: The Delegate of India.
Dr. B.N. ADARKAR (India): If the second sentence of
Article 95 is adopted, we would press for the adoption of the
third sentence of paragraph 2 of Article 95.
CHAIRMAN: There seems to be developing in the Committee
general agreement to the substitution of paragraph 3 by
the second paragraph of Article 95 of the Charter, with the
proviso; but there is a difference of opinion as to whether or
not the last sentence of paragraph 2 of Article 95 should be
added. I should like to obtain the sense of the Committee
with regard to these proposals, particularly the latter point as
to whether or not the last sentence of paragraph 2 of Article 95
of the Charter should be added.
Mr. D.Y. DAO (China): Mr. Chairman, I think that there
are two ways of dealing with the situation created by a Member
not accepting an amendment. One is that the Contracting Parties
would ask the other Contracting Party not accepting the amendment
to withdraw. The other is that the Contracting Party not
accepting the amendment withdraws himself. If we provided one
without providing the other, I think the balance would be tilted.
Furthermore, if the Contracting Party wished to avail
itself of the provision relating to impairment and nullification,
he could not take such action without the proper cause: the
cause is that some other Contracting Party has taken action to
which he objects - then he can withdraw under the provision of
impairment and nullification. It is a question of whether you
accept or do not accept, and if you do not accept the amendment,
then you either stay until the other Contracting Parties ask you
I 30
V E/PC/T/TAC/PV/15
to withdraw or you yourself withdraw, so I think that if we
provide the one we should provide the other.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): A possible compromise
occurs to me. I am afraid it involves laying bands upon the
sacred wording of the Charter, but it is this - I am taking the
second sentence of paragraph 2 of Article 95 - and it runs like
this: "The Contracting Parties may at any time determine that
any amendment under this paragraph is of such a nature that all
Contracting Parties which have not accepted it within a period
specified q by the Contracting Parties shall be permitted or
required to withdraw from the Organization, provided.." etc.
The point of it is that this limits the permission to
withdraw or requirement to withdraw to those particular amendments
which the Committee regards as important. It does not provide
the opportunity for every minor amendment, and I venture to think
that it is only in the case of important amendments that there
should be the right to withdraw, equally with the power to
expel. That is the basis of my compromise suggestion - the
words "permitted or" in front of the words "required to withdraw".
CHAIRMAN: Are there any other comments?
Mr. J. MELANDER (Norway): Mr. Chairman, I think the
proposal made by Mr. Shackle is a good solution and I support it.
Mr. H.M. CATUDAL (United States): I entirely agree with
the proposal - I think it is an admirable solution.
CHAIRMAN: The Delegate of Czechoslovakia.
Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I think 31
V E/PD/T/TAC/PV/15
that the solution suggested by Mr. Shackle is the right one.
I would only suggest a little different wording and that is
the following: "The Contracting Party shall be free to withdraw
or could remain party to the Agreement with the consent of the
the Contracting Parties". There would be nothing about
expulsion. As the amendment is so important, it amounts actually
to an entirely now Agreement, so in that case, the Party should
be free to withdraw or could remain party to the Agreement with
the consent of the Contracting Parties.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I
second the proposal just made by Dr. Augenthaler. I think
that the substance of the proposal is the same, but the form is
a more pleasing one.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I too
agree. I think, however, that we would need to add the word
"only" in the English version "shall be free to withdraw or
could remain party to the Agreement/with the consent" and
so on.
Mr. L. C. WEBB (New Zealand): Can we have the text read
again?
CHAIRMAN: Would Mr. Shackle read the suggested text?
Mr. R. J. SHACKLE (United Kingdom): It is only the
addition of the word "only": "shall be free to withdraw or
could remain a Contracting Party only with the consent of the
Contracting Parties". I think that the word "only" is needed
in English to point the meaning. 32 E/PC/T/TAC/PV/15
CHAIRMAN: If your proposal is adopted, that means that
the proviso no longer applies?
Mr. R.J. SHACKLE (United Kingdom): At first sight I should
think we would need to keep the proviso. I am not sure about
that.
CHAIRMAN: I have made a draft of the proposal of Mr. Shackle
as modified by the suggestions in the Committee and have adapted
it, as far as it has been possible, to the language of the
Agreement. I think it would then read as follows:
"The Committee may decide that any amendment made effective
under this Article, other than an amendment to Part I of this
Agreement or to the provisions of this Article or to the
provisions of this Article, is of such a nature that any
Contracting Party which has not accepted it within a period
specified by the Committee shall be free to withdraw from the
Agreement, or may remain a Contracting Party with the consent
of the Committee, provided that the Committee may, by the
affirmative votes of two-thirds of the Contracting Parties
present and voting, determine the conditions under which this
requirement shall be waived to respect of any such Contracting
Party".
Mr. R.J. SHACKLE (United Kingdom): If I might interrupt
before the translation, I suggest that we add the word "only",
I think, on second thoughts, that the proviso is unnecessary and
can disappear. In any case, the word "requirement" is no longer
appropriate.
CHAIRMAN: The Delegate of France.
V V 33 E/PC/T/TAC/PV/15
M. ROYER (France) (Interpretation): Mr. Chairman, I
think that we could give this task to the Legal Drafting
Committee. The words "other than an amendment to Part I
of this Agreement or to the provisions of this Article" are
useless, because in fact they have to be agreed upon
unanimously, and therefore they do not fall within the scope
of this provision. 34
J. E/PC/T/TAC/PV/15
MR. H.M. CATUDAL (United States): Mr. Chairman, I wonder if
we need give a draft to the Legal Drafting Committee, I certainly
agree with the comments made by Monsieur Royer that these words are
superflous, and it seems to me that we might strike them out at
once.
CHAIRMAN: I think it would be desirable to agree at least
upon a tentative text which would be brushed up by the Legal Drafting
Committee.
Would this text meet the ideas that have been expressed in the
Committee: "This Committee may decide that any amendment made
effective under this Article is of such a nature that any contracting
party which has not accepted within a period specified by the
Committee shall be free to withdraw from this Agreement or remain a
contracting party only with the consent of the Committee".
Does the Committee agree with that text?
Agreed.
Are there any other comments on paragraph 3?
We will now come to Article XXVIII - "Withdrawal". I would
first of all like to suggest that we now change the date, which, of
course, was based on the assumption that provisional application
would be from November 1st, as we did in the case of Article XXVI.
I think we could agree now to change the date to January 1st, 1951.
On page 8 and page 9 of document E/PC/T/N/312, the Norwegian
Delegation have certain comments to offer with regard to this Article,
The Czechoslovak Delegation expressed a view that any contracting
party should have the right to withdraw at any time, since otherwise
such contracting parties might find themselves subject, simultaneously, J. E/PC/T/TAC/PV/15
to two different and equally effective international conventions.
Are there any comments on Article XXVIII?
MR. R.J. SHACKLE (United Kingdom): I have merely two points,
Mr. Chairman. In the third line the word "one" should be "any".-
that is merely an improvement in the English language. As regards
the last line but two, I do not understand the motive of the words
"not less than" in front of the words "six months". In the
corresponding Article of the Charter, which is Article 97, paragraph 2,
it simply says: "A withdrawal under paragraph 1 of this Article
shall take effect upon the expiration of six months from the day on
which written notice of such withdrawal is received by the Director-
General". I cannot see the motive of the words "not less than",
may
but there/have been some reason to add it of which I am not aware.
CHAIRMAN: I take it that there is no objection to the first
of the changes suggested by Mr. Shackle, that is, to change the word
"one" in the third line to the word "any".
Agreed.
The second suggestion of Mr. Shackle is to delete the words
"."not less than" in the sixth and seventh lines. Is that agreed?
Agreed.
Are there any other comments with regard to Article XXVIII?
The Delegate of China.
MR. D.Y. DAO (China): Mr. Chairman, I have a small poinw thich,
I think, can be well taken care of by thL Begal Drafting Committee,
It is the question of whether it is necessary to have a cross
reference because under Article XXI a Member can withdraw.
55 36
J. E/PC/T/TAC/PV/15
CHAIRMAN: The Delegate of India.
MR. B.N. ADARKAR (India): I notice that, in the corresponding
provision in the New York Draft of the General Agreement, a
reference is included to the Article dealing with Nullification or
Impairment. It starts by saying "Without predjudice to the
provisions of Article XIX,", which is the Article on Nullification or
Impairment. Similarly, we could say here: Without predjudice to
the provisions of that Article and the Article on amendments.
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, I think that
the corresponding passage in the Charter is the opening sentence of
paragraph 1 of Article 97. I would suggest that the Legal
Drafting Committee should have that in front of them when considering
this text.
M. ROYER (France) (Interpretation): There are other texts
which should be mentioned here. For instance, Article XXVII,
paragraph 2, which we have just adopted here and to which we should
also refer.
CHAIRMAN: Is the Committee in accord with regard to leaving
the question of cross references to the Drafting Committee?
Agreed.
Are there any other comments with regard to Article XXVIII?
H.R. Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
only wanted to state that I withdraw our amendment, because when we
drafted it it was not quite clear what the possition would be with
Regard to provisional application. 37
J. E/PC/T/TAC/PV/15
CHAIRMAN: I thank the Delegate of Czechoslovakia.,
Are there any other comments on Article XXVIII?
Approved.
Article XXIX. On page 9 of document E/PC/T/W/312 we find that
the Czechoslovakian Delegation proposes that the present Article be
deleted and replaced by the following text: "The contracting
parties shall put in force the provisions of this Agreement by way
of their existing commercial treaties. Where there is no
commercial treaty existing among the respective countries, this
Agreement shall provisionally take the place of such a treaty".
H.E. Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
would like to withdraw our proposal and propose instead the deletion
of the whole of Article XXIX.
I think that the first part is not at all necessary for the
simple reason, as I have already stated today, that any later Agreement
substitutes the earlier, so that it means that any commeercial
treaties we have amongst ourselves are superseded by the provisions
of this Tariff Agreement, and the first part of Article ,XXIX is not
necessary.
As for the second part, we meet our dear old acquaintance
Relations with Nor-Members. Well, we were unable to decide in the
Draft Charter about what text to propose to the Havana Conference,
and the reason was that many countries felt that they could not
decide upon this matter because they did not know who would be the
future Members of the Organization. Here, there is an even more
restricted circle than we may expect at Havana. As for
Czechoslovakia, for. instance, there is not one single neighbour of 38
J. E/PC/T/TAC/PV/15
Czechoslovakia present here. We started on this crusade with lofty
principles, but also with practical ideas to secure full employment
and expand world trade, and so on. I think that no country should
be obliged to maintain in relation to non-Members the principles of
this Agreement, because it is not sure that the other party would
accept those principles, and so long as there is no injury to other
Members or other parties to the Agreement, I do not see why any
international obligations should be terminated.
To come back to the first part again, I still think that it
would be better to omit it because, when we were discussing the
question of international obligations and so on, we came to the
conclusion that it could also be applied, for instance, to peace
treaties and many other international obligations, so we think that
it is better to delete the whole of Article XXIX as it stands,
especially as the Agreement is a provisional one, and I doubt if any
country would be willing to terminate its international relations
because of some provisional Agreement. S 39 E/PC/T/TAC/PV/15
CHAIRMAN: The Delegate of the United States.
Mr. H.M. CATURDAL (United States): Mr. Chairman, I agree
with the Delegate of Czechoslovakia that Paragraph 1 does seem
superfluous. We would be agreeable to its deletion.
With respect to Paragraph 2 and the Australian Delegation's
proposal to amend it, at the top of Page 10 of Document W/312,
I wonder whether there could be any real objection to such a
provision. Once the Agreement has definitively entered into
force, it seems to me that a country would have to terminate any
prior existing international obligation to the extent that any
such prior obligation were inconsistent with this Agreement.
I am wondering therefore if the Australian amendment here would
not be a reasonable compromise which Dr. Augenthaler could
accept.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Charman, as the
preceding speakers have done, I would like to state also that
I think Paragraph 1 of Article XXIX is not indispensable; in
fact, it may cause some trouble in certain countries where there
is a certain constitutional procedure for the revision of
treaties.
As regards Paragraph 2, I wonder if this paragraph is
really indispensable. The Australian amendment tends to leave the
solution of the question in a rather uncertain way until the
definitive entry into force of the Charter. Once the Charter
comes into force in a definitive way, the reslations with non-
Member States will be specified and it is possible that the
non-Member States may not be the same as those parties to the
Agreement. 40
S E/PC/T/TAC/PV/15
We can have two cases: we can have the case of relations
with non-Member States because they are not Members of the
Organization and we can have relations with Members who are not
parties to the Agreement. The second case will be governed by
certain rules of the Charter; in the first case the relations
with non-Members of the Organization will be provided for by
the rules dealing with relations with non-Members of the Organization.
I think, therefore, that Paragraph 2 is also superfluous.
CHAIRMAN: The Delegate of Belgium.
Baron P. de GAIFFIER (Belgium) (Interpretation): Mr.
Chairman, I do not agree with what has been said by the
preceding speakers. I think that Paragraph 1 presents a certain
interest. Its provisions are customary in most commercial
agreements and it is usual to state that the provisions of a new
agreement supersede the provisions of former agreements. This
may be an obvious rule of International Law, but it is neverthe-
less customary to state it.
But it seems to me we have here an Australian amendment to
Paragraph 1 and I think Paragraph 1 could be replaced by the
suggested Australian text.
As regards Paragraph 2, we would prefer to see it maintained as
it now stands, but, in an effort to compromise, we are ready to
study Paragraph 2 in the light of the Australian amendment.
CHIAMVN: The De'agate ofrB;azil.
MrE B. LR BRODIEU!S (ar.zil): rM.. Chairman, Iegc,ard this
LrticlXXCCIX as a very complex one. If we admit that we are
dealing with a multilateral agreement, we have to accept the
Fact that it will be very difficult to have ae neral provision
dealing with this very complex matter. 41
S E/PC/T/TAC/PV/15
I would call your attention - if you will allow me, Mr.
Chairman - to the different dates for the entry into force of the
Agreement. We have a group of countries which can put this
Agreement into force at a certain date, and anothe group which
can do so at another date - a much later one. It will be very
difficult, especially in reward to tariff concessions, to have
supersession of prior international obligations by this
multilateral Agreement.
In regard to the amendment of the Australian Delegation, I
see more difficulties. I think it will be very hard at this time
to have a real idea of what will happen in the near future,
especially by June 30, 1948. Because of this, I belive it will
be better to delete both paragraphs of Article XXIX.
CHAIRMAN: The Delegate of Cuba.
Mr. H. DORN (Cuba ): Mr. Chairman, I agree with all those
Delegates who have stated that Paragraph 1 of Article XXIX is
superfluous,
As for Paragraph 2, I want to drew attention to a question of
substance which, in my opinion, is not quite solved by this
Paragraph 2, because it is not quite clear what it means by
prior international obligations which are inconsistent with this
agreement. Does this mean that the position obtaining from an
international treaty with a third country which has another and
different interpretation is inconsistent, or is the inconsistency
only if the international treaty with a third country impedes -
and that is, in my opinion the only correct meaning - the
maintenance and realization of the obligations stated in the
Agreement. Only to this extent could there really be inconsistency
between this Agreement and a treaty with a third country. E/PC/T/TAC/PV/15
I think if one could clear up this point it would perhaps be
easier to get a formula which would be acceptable to all of us.
CHAIRMAN: The Delegate of the United States.
Mr. H. M. CATUDAL (United States): Mr. Chairman, I am glad
that the Cuban D elegate m I:Tte has tade this point. I; seems to me there
has been some misunderstanding and some unnecessary fears because
of the language here, which is open posssibly to different
interpretations,
I have a serggestion to make hxe, slightly modifying the
.ustralian amend ment, which I thinkwould make it very clear and
remove some of the objections to this proposal.
I suggest that the paragraph should "rhed as follows: Tii
conaracting pertieAgshell, after the ~,renment shall have entered
into foXce under awticle X:IV, take ell necessary steps to terminate
any prior international obligations with any non-contracting party
to the extent that such obligations would prevent such contracting
part from giving full effect to the Agovision. of this &Freement-"
It seems to me this makas it very clear thet this is not a
question on a par with the non-Member paovesions of the Ch;rtor,
whereby it may be decided that the Members of the Organization must
refrain from giving certainabenefits of the Ch.rter to non-Members.
A1 you are asking here is that a contracting party, after the
definitive entry igto force of the Ajreement, should terminate any
obligation with a non-contracting party which would prevent the
contracting party from givingfull effect to the provisions of this
:*rement,
I think that is a reasonable compromise upon which we might
be able to agree,
S S E/PC/T/TAC/PV/15
CHAIRMAN: The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom): Well, Mr. Chairman, I was
going to say this before I saw Mr. Catudal's amendment. I am
not sure whether it is not still perhaps a valuable point.
I am a little distrustful of putting in oast-iron points
of this kind. One does not know what the future may bring forth.
I should like to see, prefaced to this paragraph, some such words
as "unless in any particular case the Committee otherwise
decides." This would provide a sort of safety valve,
whatever the subsequent decision on the paragraph may be. -44--
P. E/PC/T/TAC/PV/15
CHAIRMAN: The Delegate of China.
Mr. D. Y. DAO (China): Mr. Chairman, you will notice that the
Chinese Delegation has produced an amendment to Article XXIX
suggesting the suppression of paragraph 2. So we share the view
expressed by the Delegate of Czechoslovakia that paragraph 2 seems
to
to us not/be necessary. As long as the text in the Charter
relating to relations with non-Members is still undecided we think
that it is better to leave out this paragraph until the Charter is
made definite in respect to the Members' relation with the non-
Members.
Furthermore, in the Charter the non-Member is given a
definition. Here we refer to "non-contracting parties". We do
not know who are the non-contracting parties. We believe that the
Agreement will be open for adherents. Besides these seventeen
or twenty nations here who will probably be contracting parties to
the Agreement, there will probably be many others who will join
the Agreement, so by the time when so many countries have joined
the Agreement the proportion of the non-contracting parties will
be reduced and then, probably, the difficulties will not be so
great; but at the present moment, we find that there may be
difficulties for some contracting parties to take steps to terminate
their prior international obligations with non-contracting parties.
CHAIRMAN: The Delegate of New Zealand.
Mr. L.C. WEBB (New Zealand): Mr. Chairman, we agree with
those delegations who think that Article XXIX could very probably
be deleted without endangering what is essential in the Agreement,
since we would assume that countries which have initiated tariff
reductions have done so with due regard for their existing
international obligations. E/PC/T/TAC/PV/15
If, however, the of this meeting is against the total
deletion of Article XXIX, then we would feel that the most desirable
compromise would be really to combine the suggestions which have
been made by the United kingdom and the United States Delegations:
that is, that we should take the Australian suggestion for
paragraph 2, as amended, very necessarily I think, by the United
States Delegate and then preface it by Mr. Phacklo phrase - I do
not know if I oaught it correctly - "except as the Committee may
otherwise provide". It seems to absolutely assential to leave
some discretionry power in the hands of the Committee because is
J.s absolutely impossible to foresoe the type of situation which
may arise under Article XXIX, paragraph 2.
.
CHAIRMAN: The Delegate of Australia,
Mr. E. McCARTHE (Australia) : Mr. Chairman, the question seems
to us to be in two divisions. As to whether particular
Article is needed at all, our view would rather be that we do not
feel very strongly on the question as to whether is should or
should not. We would not be very disturbed if it were removed:
on the other hand, we would not move to have it, remain . But if
the view is that it should remain we would be inclied to think
that it goes without saying that, if you have signed this Agreement
and it is in conflict with other obligations you have entered into,
you have either got/to adjust those obligations or you cannot sign
the Agreement.
If it is to remain, however, we are of the view that it should
be qualified. * 'ir .in the liues that we have sugested. We
would not object to the amendment proposed by the United States
representative; in fact, we rather think that it improves the
wo~ding that we have suggested. We have some doubts regarding
Mr. Shackle's proposal because it does seem that we are trying to
-45- E/PC / T/ TAC/PV/15
define what might be a legal position that would arise out of our
signing the Agreement and it is just possible that the Committee
might take a view that would embarrass a particular country in
its relations with a party with which it had an agreement. In
other words you have got so me thing which might have rather firm
legal implications and you have given the Committee certain
discretionary power, and I must say that I am in some doubt whether
that would actually work out in practice without some difficulty.
I cannot see that there is much room for embarrassmont or
difficulty where you are defining that. Any obligations that you
have entered into in the past and vvhich will prevent you making
this Agreement will have to be in some way dealt with; either you
will have to approach the people with whom you had obligations and
ask them to amend them, or you will have to take some steps to
reconcile the fact that you have made a new Agreement which in some
way is inconsistent with the prior obligation.
So our view would be that, if it is decided to retain
Article XXIX, it should be qualified in the way that we have
suggested, and we are prepared to accept the amendment, but we
cannot quite see the implications of the United Kingdom proposal
and we fear that it might turn out to involve a particular country
in some embarrassment with the country with whom it had the prior
obligations.
CHAIRMAN: The Delegate of India.
Mr. B.N. ADARKAR (India) : Mr. Chairman, the Indian
Delegation also will support the deletion of the entire Article
XXIX for reasons which were so well stated by the Delegates of
Czechoslovakia and France.
We would prefer that this question be left over until the
final, terms of the Charter on questions relating to relations with
non-Members are decidèd. We do not expect that any serious
practical difficulties would arise if this Article were deleted.
P.
- 46 - E/PC/T/TQC/PV/15
While the amendment suggested by the Delegate of the United
Kingdom goes some way to easing the position, we are afraid that,
if we give discreti'on to the Committee to decide in which
particular cases the operation of this Article might be suspended,
it might create a serious embarrassment to particular countries,
For these reasons we would strongly support the proposal to
delete. Article XXIX altogether.
CHAIRMAN: The Delegatc of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I do
not want to prolong this debate, and I would only say in defence
of my impromptu suggestion, that I do not think it would cause any
actual clash. The words I suggested were "unless in any
particular case the Committee otherwise decides"'. The Committee
would look at each case on its rnerits. It seems to me if you
had these words there, that is, so to speak, a qualification of
the obligation of the parties to this Agreement. That is to
say, if there were a conflict with some prior obligation which
they had toward a third party, they would only be called upon to
adjust that inconsistency if the Committee, on considering the
particular case, decided that they ought to do so. I quite see
that it may place a discretior which may sometimes be embarrassing
on the Committee; but I am afraid the Committee may have to
exercise a great many embarrassing discretions anyhov.
So I still think there ma.y be some merit in my suggestion, but
I have no strong feelings in the matter.
CHAIRMAN: Are there any other speakers? Mr. Evans.
MR. J.W. EVANS (United States): Mr. Chairman, Mr. Catudal
kindly let me take his chair because I had been involved in the - 48 -
debates on the Relations with Non-Member clause. But before I say
anything I should like to ask whether or not the amendment, with the
proposal of Mr. Catudal does not in fact take care of the fears
which have been expressed by the Czechoslovak Delegate and the
Delegate of France. They wore proposed specifically to meat the
points and I rather think they do.
CHAIRMAN: The Delegate of Czechoslovakia.
H.E. Dr. Z. AUGENTHALER (Czechoslovekia): Mr. Chairman, I
should like to insist that the whole Article XXIX be deleted entirely.
My reasons are as follows:
If there is a clash between this Tariff Agreement and some
obligations of the respective country with some - I won't say
whether non-Member or non-contracting party, there would certainly be a
great headache for the respective country as to how to solve this
problem, either to remain party to the Agreement or to terminate
the other obligations. I do not doubt that the respective party
would do its best to do what could be done in the circumstances.
If, anyhow, the contracting party would have obligations such as
would frustrate any of the other contracting parties, then they
might have appeal to Article XXI in which it is clearly stated: "If
any contracting party should consider that any benefit accruing to
it directly or indirectly under this Agreement ...." and so on "...is
being impeded as a result of (1) the failure of another contracting
party to carry out is obligations under this Agreement or the
accompanying Protocol.....".
So, if I do not carry out obligations of this Tariff Agreement,
anybody may come and appeal to Article XXI. If I carry out my
obligations under the Tariff Agreement, why should I be obliged to
terminate any of my obligations?
E/PC/T/TC/PV/15 P. E/PC/T/TAC/PV/15
The other reason is that here we are placing Article XXIX,
dealing with Relations with Non-Members, in Part III. Well, we
have not decided what should be in the Draft Charter and hero we
are placing Article XXIX, which is not even superseded
automatically by what should be decided in the Charter. So it
means that we renounce for the future any other arrangement which
may be in the Charter.
That is why I would strongly insist that the whole
Article XXIX be deleted. - 50 -
V E/'C/T/TAC/PV/15
Mr. John W. EVANS (United States): I asked for the floor
primarily to dispose of any misunderstanding there might be as
to the relationship between this clause and the debate on the
Non-Member provisions.
In supporting the retention of the clause as amended to
accomplish this purpose, we do not feel that the argument
bore on the argument which took place concerning Non-Member
provisions. The principal point of difference there was the
question as to whether or not Members should be permitted to
extend to Non-Members the same privileges which they extended
to other Members. That point is not at issue here. The only
question is whether a signatory may actually violate this
Agreement in favour of another Member, and there we would have
thought there was no argument at all.
The only problem would seem to be whether you need to
express the natural obligation which goes with the acceptance
of the Agreement. As to the question of whether it is necessary
to express this obligation, frankly we have not felt too strongly
that it was necessary to have it expressed, and probably would
agree to the deletion of the clause if it were not for the
debate that has taken place today and the possible danger that
some of the remarks of some Delegates might be misunderstood -
and I mean misunderstood - to mean that they feel that they
do not have an obligation to terminate an existing
Agreement which would conflict with this, I do not believe
that there is any Delegate here who would say that this Agreement
should be accepted by his country if it is in conflict with an
existing agreement, unless he is willing to dispose of the
existing agreement. But I am afraid that some of the discussion
might be so interpreted. That being the case, in view of the V E/PC/T/TAC/PV/15
debate that has taken place and is now on the record, we
would prefer to retain the Article with the suggested
amendment; but we share with the Australian Delegate some
doubts and fears as to the desirability of the wording
proposed by Mr. Shackle, and we would suggest that be not
included.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I do not
wish to prolong the discussion, but it seems to me that there
is a misunderstanding. Article XXIX, to my mind, adds nothing
to the obligations of the Members. The obligations of the
Members appear in the Agreement and we do not make them any
stronger by stating it a second time here in Article XXIX.
I think that we all agree here that the obligation
undertaken by the Contracting Party to its other Contracting
Parties must be carried out, and if a Contracting Party does
not live up to its obligation, then Article XXI of the Agreement
will come into force.
In Article XXI, there is no difference between a Contracting
Party which does not live up to its obligation in the sense
that it does not in fact grant the advantages that it granted
in the negotiations to another party, and the conflict which
might occur between the obligations of the Member under the
present Agreement and its obligations under a previous
agreement. In fact, Article XXIX has no advantage: it
adds nothing, and it may be somewhat embarrassing for certain
countries.
Furthermore, under Article XXIX certain legal problems
might arise, because it is possible that any provisions could
- Ad - E/PC/T/TAC/PV/15
be added in the Tariff Agreement - new provisions which we have
not in mind at the present time. For instance, if anything
were added here which would change the scope of paragraph 2
and make it different from the scope which we envisage today,
the situation might be embarrassing perhaps for certain
countries. This Article is not embarrassing to the French
Delegation, but nevertheless as it might be embarrassing to
other Delegations, we think that, as this Article does not
add anything, it would be far better to exclude it.
CHAIRMAN: The Delegate of the Netherlands.
Dr. G.A. LAMSVELT (Netherlands): Mr. Chairman,
notwithstanding all that has been said against this Article,
I am still in favour of retaining it, and therefore I would
like to support the proposal made by the Delegate of the United
States. I would like to go farhter and say that I do not see
any harm in paragraph 1. It may be superfluous, as has been
said, but, at the same time, it is quite true, as has been
pointed out by my Belgian Delegate, that you find such provisions
in nearly every treaty of commerce.
CHAIRMAN: The Delegate of Canada.
Mr. L.E. COUILLARD (Canada): Mr. Chairman, I merely want
to state that I agree with the last remarks of Mr. Royer. I
had thought, personally, at first that Article XXIX did more or
less complete the Agreement. It is a question which will be in
the minds of people reading it as to what happens to I prior
international obligations; but on reading paragraphs 1 and 2,
particularly with the amendments as added by the United Kingdom
and the United States Delegations, it seems to me that this
- 52 -
V V - 53 - E/PC/T/TAC/PV/15
Article does not state anything which is not already taken
for granted and which will not be done in any case, as
Dr. Augenthaler stated, by the Contracting Parties. Therefore
we would support Dr. Augenthaler's suggestion that Article XXIX
be deleted.
CHAIRMAN: The Delegate of the United Kingdom.
Mr . R. J. SHACKLE (United Kingdom): Mr. Chairman, after
listening to this discussion, I have come to the conclusion
that it makes no matter what words stand in this Article, or
if no words stand there at all. What will happen in any
particular case will be precisely the same. If one party
considers that another party has some relation with a third
party which injures its interests and infringes its rights,
it will make a complaint to the Committee under Article XXI
or in some other way. The Committee will have to consider
the matter and try to sort it out as best it can, and under
any formulation or no formulation, we shall have exactly
that result. So in view of the majority sense of the
Committee, I would be in favour of dropping tho Article. -54 -
J. E/PC/T/TAC/PV/15
MR. J. MELANDER (Norway): Mr. Chairman, I entirely agree with
the statements of the Delegatesof the United Kingdom, France and
Canada,
There is perhaps one point which could, be taken care of. The
Delegate of the United States said that he would really also agree
to the deletion were it not for certain remarks which had been made
during the discussion. I think perhaps that, if there is any doubt
about any statements or any arguments made, one could clear up those
at the next meeting. I suggest that the United States Delegate
goes through the Verbatim Report and that, if there are any doubts,
he raises at the next meeting any points on which he feels doubtful,
and has the thing squared up completely.
CHAIRMAN: The Delegate of the United States.
MR. J. E. EVANS (United States): Mr. Chairman, I think that
the oasisat way to clear up this is to have the last word.
expressed
In view of the strong feeling/by many Delegates who would rather
have the paragraph out, we should agree to do so on a ve definite
condition, that is, that we understand, in spite of anything that
may have been said today, that no Delegate here challenges the fact
that the definitive acceptance of the General Agreement would require
that it should not allow any prior obligations to stand in the way of
carrying out the provisions of this agreement, even though that
requirement might lead to the termination of existing agreements.
Now, if no one disagrees with that statement, we are perfectly willing
to see the Article deleted. - 55 -
E/PC/T/TAC/PV/15
J. I/ . It _
CHAIRMAN: I ain sure that no Member of the Committee wvuld
question the statement just made by the Delegate of the United States,
and as the sense of the Committee has been in favour of the deletion
of this Article I hope that it will now be possible for the
Committee to unanimously agree that Article XXIX be deleted.
H.E. Dr. Z. AUGENTFAER (Czechoslovakia): Mr. Chairman, I
would like to thank my colleagues for their understanding of this
situation.
CHAIR II: The deletion of Article XXIX is agreed,
I think that we have done a good day's work, although we have
only covered three Articles, but they were not particularly easy
Tomorrow I propose to take up Articles XXX and XXXI, after which
I think we had better consider the Reports of Sub-Comnittees which
have already been submitted and circulated. We will then take up
Provisional Application of. the Agreement and the Final Act.
The next meeting will take place tomorrow at 2.30 p.m.
The meeting is adjourned.
The meeting rose at 6.15 p.m. |
GATT Library | sf835fw9193 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Fifth Meeting held on Friday, 22 August 1947 at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, August 22, 1947 | United Nations. Economic and Social Council | 22/08/1947 | official documents | E/PC/T/PV.2/5 and E/PC/T/PV2/3/CORR.1-6 | https://exhibits.stanford.edu/gatt/catalog/sf835fw9193 | sf835fw9193_90260195.xml | GATT_155 | 12,170 | 76,979 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOC IAL
UNRESTRICTED
E/PC/T/PV.2/5
22 August 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
FIFTH MEETING
HELD ON FRIDAY, 22 AUGUST 1947 AT 2.30 P.M.
IN THE
PALAIS DES NATIONS, GENEVA.
M. Max SUETENS
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247).
Delegates are reminded that the texts of interpretations, which
do not pretend to be authentic translations, are reproduced for
general guidance only; corrigenda to the texts of interpretations
cannot, therefore, be accepted.
--
NATIONS UNIES
hClairman) elgi-jum). ER
CHAIRMAN (Interpretation): The Meeting is called to
order.
We are assembled here to-day to approve the Report of the
Second Session of the Preparatory Commission on the Conference on
Trade and Employment of the United Nations Organisation, Document
180, which is a public document.
I have great pleasure in announcing that a great number of
reservations mentioned in that document were withdrawn this morning
by the delegation which had made them. A corrigendum showing the
various withdrawals and containing the final text will be circulated
as soon as possible. I shall now submit the Draft Charter to your
approval chapter by chapter.
The Introduction. Are there any remarks? Adopted.
Chapter I. - Purpose and Objectives. Any remarks?
Adopted.
Chapter II- Employment and Economic Activities. No remarks.
Adopted.
Chapter III - Economic Development. No remarks? Adopted.
Chapter IV - Commercial Policy. No remarks? Adopted.
Chapter V. - Restrictive Business Practices. No remarks?
Adopted.
Chapter VI - Inter-governmental Commodity Agreements. No
remarks? Adopted.
Chapter VII - The International Trade Organisation. No
remarks? Adopted.
Chapter VIII - Settlement a Differences - Interpretation.
No remarks? Adopted.
Chapter IX - General Provisions. No remarks? Adopted.
The whole of the Report of the Second Session is therefore
adopted.
2 ER
Ladies and Gentlemen, I have the honour of bringing to a
close the work of the First Session of the Preparatory Commission
of the International Conference of Trade and Employment. To-day
we are on the point of bringing to a close the work of the Second
Session. This Session has lasted from 10th April to 22nd August.
During that period of just over four months 453 meetings of com-
mittees, sub-committees, and working parties have been held. If we
add to that figure the 58 meetings held at Lake Success by the
Drafting Committee and the 150 meetings hold in London in the course
of the First Session, we reach a total of 626 meetings, which shows
the considerable effort made by the delegations here assembled in
performing the task eutrusted to them by the Economic and Social
Council. The texts drawn up in London, and reviewed at Lake Success,
were further discussed and substantially revised.
I sincerely think that each page of our work shows an improve-
ment on the preceding one. The work. which we are going to present
to the forthcoming World Conference which, as you know, is to open
on 21st November next at Havana, is, I hope, superior in coherence,
logic and clarity to the text drawn up in London and New York. It
is, on the other hand, highly significant that there are less
reservations attached to the present draft than was the case with
the previous texts. It should be added that most of these reserva-
tions are provisional, and that they may well be withdrawn at the
World Conference. This fact alone shows to what extent we have
taken into account the needs of various requirements and of the
various types of economies which are represented here. It would
not be possible for me now to describe in detail the result of our
work. The texts which we have drafted are public, and everyone
will be able to consult and analyse them. I would like, however,
to make a few remarks on the purposes which we had in mind and the
means by which we have endeavoured to achieve them. 4
S E/PC/T/PV 2/ 5
Our purposes are stated in Chapter I of the draft Charter.
I shall read them to you. They show the full scope of our
endeavour and the magnitude of our task. Their general purpose
is to realise the aims set forth in the Charter of the United
Nations, particularly the attainment of the highest standards
of living, full employment and conditions of economic and social
progress and development envisaged in Article 55 A of that
Charter .
To this énd, the States parties to the Charter pledge them-
selves, individually and collectively, to promote national find
international action designed to attain the following objectives:
1. To assure a large and steadily growing volume of real
income and effective demand, to increase the production, con-
sumption and exchange of goods, and thus to contribute to a
balanced and expanding world economy.
and general
2. To foster and assist industrial economic/development,
particularly of those countries which are still in the early
stages of industrial development, and to encourage the inter-
national flow of capital for productive investment.
3. To further the enjoyment by all countries, on equal terms,
of access to the markets, products and productive facilities,
which are needed for their economic prosperity and development,
4. To reduce tariffs and other barriers to trade and to
eliminate discriminatory treatment in international commerce.
5. To enable countries, by increasing the opportunities for
their trade and economic development on a mutually advantageous
basis, to abstain from measures which would disrupt world
commerce, reduce productive employment or retard economic
progress.
6. To facilitate through the promotion of mutual understanding,
consultation and co-operation the solution of problems relating
Im I _ -: } - E/PC/T/PV2/5
to international trade in the fields of employment, economic
development, commercial policy, business practices and commodity
policy.
To achieve these aims, a set of rules and undertakings are
proposed which make up the subject matter of the Draft Charter
which has just been approved.
In this series of Chapters and Articles one may discern
four main trends which I shall analyse very briefly. First,
it is necessary to give to international trade the security it
requires by means of a body of rules which are recognised by
everybody. In the present state of affairs these rules are
embodied in various commercial treaties, but their provisions
lack uniformity; they are not sufficiently general in
character, and most of them are ill-suited to the new techniques
of commercial policy. It was therefore necessary to re-consider,
define, supplement and codify them.
May I take as an example the clauses relating to Most-
Favoured-Nation treatment, national treatment in internal taxation,
the rule governing customs formalities, and regulations
relatin to prohibitions and restrictions. It has even been
found necessary to enlarge considerably upon the scope of
ordinary commercial treaties and to provide for entirely new
rules as regards restrictive business practices, that is to say,
all agreements concluded directly between private enterprises
with the object of restraining competition, fixing quotas and
dividing markets. These agreements affected trade as much
as ordinary commercial conventions.
One cannot conceive a complete code, of rules of commercial
policy which would not cover these practices. It is, moreover,
S
.5 E/PC/T/PV2/5
the first time that there has been an agreement between Governments
in this field, which hitherto has been left to the discretion of
private interests. The usual solution would have been simply to
lay down a code of strict rules, but this course soon proved to be
impracticable. The profound differences existing in the economic
structures and in the state of development of the economies of
various countries represented in the Commission do not permit
the adoption of uniform rules. A certain flexibility is
required. Hence the necessity for excape clauses.
Furthermore, even if it had been possible to lay down a
set of precise rules, it would not have been possible to avoid
divergencies of opinion regarding the provisions and their
application. Moreover, enforcement difficulties may arise and
new situations may develop.
In the absence of an international charter, all these
matters would have been lefts to the diseretion of the various
Governments and this freedom of action would have been fraught with
danger. If, on the other hand, provision is made in individual
cases for a procedure which allows for the settlement of
possible differences or disputes, either amicably or by means
of legal procedure, it becomes possible to prevent the machinery
of international trade from being too seriously impaired.
As was stated by President Truman at Baylor University in
February 1947, instead of retaining unlimit ed freedom which would
anlelu emart como mit acts of ec' omocio gress.3i,on the future
International Trade Orgazi:ation wila cectpa en enomrlic code and
will decide to act in conformity with its rules.
In this connection, the Draft Chaetcr provides, inter alia,
for the setting up of aInLiternational Trade Organization toneurn:e
its application and to aca es inteermaiery and conciliator in
S S
all delicate matters.
In the field of customs regulations, the Draft Charter stipu-
lates that the Member States will undertake concerted action to
reduce customs tariffs, to eliminate tariff preferences progressivel
and to abolish quantitative restrictions, or at least strictly
to control their use.
Simultaneously with the workof the Commission; and under its
auspicos, a number of bilateral negotiations have been undertaken
in this connection which are to be converted into a multilateral
agreement binding the States parties to the Charter. Those
negotiations have not yet been completed, but they will for an
important adjunct to our work.
But that is not all. Neither the laying down of principles
nor the institution of an organization for safeguarding concliistioil
and arbitration can suffice to maintain and develop trade. A law
provides security, but it creates nothing of itself. One could
oven go further; the establishment of freedom in exchange itself
would not be sufficient. It would also be necessary to under-
take determined and co-operative action in the field which
condition trade, that is to say, production, consumption, employ-
ment, and genral economic development - particuIarly in the case
of under-developed countries.
In these various matters, the measures to be taken depend
primarily on national sovereignty. Each country must have its
own policy, but these various policies might clash were they
not governed by concerted action. The rules for such action
constitute an important part of the Charter.
In the same connection, one might mention the rules drawn
up as regards inter-governmental commodity agreements. The
necessity of regulating production, consumption, and the trade
in those products has been recognized in certain cases. A
procedure has been laid down for that regulation, so that it shall
E/PC/T/PV 2/3 S 8 E/PC/T/PV2/5
conform with the general purposes of the Charter.
Having thus outlined the spirit and trend of the Charter of
Trade and Employment, I will briefly state the degree of
unanimity we have reached regarding the various Chapters. We have
the
adopted without a single reservation/provisions regarding
employment and economic activity in the new Chapter II. After
thorough and conscientious discussions, we present in Chapter
III provisions regarding economic development, most of which
Members of our Commission have been able to accept, despite the
very divergent stages of economic development reached by the
countries they represent.
In a spirit of conciliation, we have spared no effort to
embody in Chapter IV a series of provisions on commercial policy
which can be considered as highly satisfactory, having regard to
the fact that this question is closely connected with the present-
day economic problems now confronting all the Governments
represented on our Preparatory Commissiorn. Questions of customs
tariffs, quotas and balance of payments have a pressing and by
no means academic interest for most Governments today. J 9 E/PC/T/PV/2/5
Nothing can better demonstrate the spirit of co-operation which
has prevailed in our Commi than the large measure of
agreement reached on the Charter on commercial policy. With
almost complete unanimity, we have adopted the more detailed
provisions regarding Restrictive Business practices and Inter-
Governmental Commodity Agreements, dealt with in Chapters V and VI.
Various countries are interested in one or other of the parts
of the Charter, according to their economic structure or to their
interests. One country attributes more value to the qualification
of rules concerning international trade; others to the lowering of
customs barriers; others to the policy advocated for the
.development of new industries; others to employment policy; but all
must assume the same obligations.
On the other hand, each country approaches, and will approach,
the Charter with its own economic structure and without bein-
required to give up the fundamental principles of its economic
organization. The Charter must respect the autonomy of all Members
alike,7 those with liberal economies, those with state monopolies,
or those whose external trade is itself a monopoly, and those whose
external trade is directed for the purpose either of re-construction
or of industrial development or of a system of stabilization of
prices.
All the rules of the Charter must be, acceptable to these
various categories of countries and expressed in the terms of
variousexisting economic systems.
The work we are doing now is a preliminary work to be
submitted to all the countries concerned in international trade.
Our work would have been in vain if, while thinking of ourselves, we
had not also thought of the countries which are not at present J. 10 E/PC/T/PV. 2/5
participating in our work, but which will also have to judge our
work.
Discussion remains free, but it can be hoped that the World
Conference will not need to make substantial alterations to the
text submitted. There is, however, one point on which we have not
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~/
wished to decide, namely, the creation and operation of the
International Trade Organization. In connection with the relevant
Chapters, the Preparatory Committee has recognized ,that on
several points, rather than submitting a single draft for approval,
it was more s,1table to submit to the World Conference several
alternatives or preliminary proposals. This solution has-been
adopted with regard to the Vo;ing provisions contkined in
Article 72, the provisions on the Composition of the Executive
Board, the Chapter on-the Interpretation and Settlement of Disputes,
and the provisions governing Relations with Non-Member States. On
these four questions, the Preparatory Committee has abstained from.
formulating any final conclusions as it was con;inced that these
proble"s could only be dealt with by the World Conferenae, which is
t6 be aEtended by a largernumber of count.ies. '
It s important for the success of that Qonference that all the
governments represented should examine these problems with
particular attention before its opening. One mirht add that, as
Was pointed out by the sub-committee entrusted, in the course of
t-e present session, with the preibninary examination of the
question.of Relations with Non-Member States, the Preparatory
Co.mittee has fully recognised - and the same principle will have
to guide'the World Conference - that the drafting of the Charter
should be inspired by an essential objective, namely, to ensure the
setting 'p of an effective Organization with the widest. possible
miobershi ; E/PC/T/PV. 2/5
It is not for me to pronounce judgement on our work. I can
only testify to the conscienciousness of our work. Z French
moralist said something like this:- consciencious men undertake
great work because it is great, and frivolous men because they
think it is easy. Not for a single moment have we thought that
our discussion was easy. We havee worked in good faith, hard, and
over a long period. We feel confident that our efforts will be
given due credit.
Several Delegated have asked to speak. The first speaker on
my list is the first Delegate of Australia.
I call upon the Australian Delegate.
J . E/PC/T/PV. 2/5
Dr.H.C. COOMBS (Australia): It had been our prime task to
prepare for the consideration of the World Conference on Trade and
Employment a draft Charter for an International Trade Organisation
a charter which will embody a code of behaviour to which member
Governments can pledge themseIves and a constitution for an Organisa-
tion which will be the nations' Instrument of corporation in commer-
cial policy. I believe our work n:ls been well done. It is true
that certain essentially political issues have been held over for
the World Conference in the form of Alternative texts. These are
matters which can be dealt with adequately only when all countries
concerned are present, On the wi'. technical eonomic issues with
which the Charter ¢.,.;i., a substantial body of agreement has been
reached., This is no mean -:ic, an -. ] t. As the project for an
lnternational Trade O rganization and Charter became mole
and more. concrate, it became necessary for as to. envisage it in the
real world of to-day and not in come ' ,- 1t,)'.',Th- t a future. Thus our
problems because more x -- :2cA- and more realistic and so more diffi-
delegtions here and of the governments they represent that such
progress has been made.
We have every reason to ta.e1kp ide½ n when:.- we veaey done, but
do not ust US : our djustmen .et- we have puodaced a draft
rhaitehicwi.h we ahoneifkstcy (ommend to thW rldorn Conference. With
all itmperw- .s. nsit is2.n ad atequate basis fcr oooperat ion agonz
nNe ionstv- ico omncnindarommercial martert.Gzs It can he no more
then a basis. Wevea-o corue.e;tad a It remLemains for the
govmrnnse.t of the world pu fjf esl.ih in .ts bones and breath in
bt nortls.. hT'Inth1nr-ional T rade Orgga._nisation can only be
thnaIitns of±r e w wld working to-cgethe r and it caneb, greater and
betterhan a~ theisam i -tmembaisrznly l>if t';hose members are willing
ttas it oul d bg ao.F 3orhe Inter aLntian-l Trade Organisat ion to
become aiv.niigrgoxin~sm,wovc ndimioniomurnst be met.
P E/PC/T/PV.2/5
Firstly, the economic climate of the world must in its
early years at least be favourable to its growth. It must be.
such as to make economic cooperation between. the nations
possible.
The Australian delegation at the first and second sessions
of this Committee has emphasized the fast that world economic
conditions are still determined primarily by the domestic
policies of individual countries. Only if the great economic
powers maintain high levels of employment and incomes for their
own people, and make fully effective their International
purchasing power, can there be a world economic climate which
permits cooperation. Unless these responsibilities are
accepted, we shall fail.
Secondly, governments must will that the International
Trade Organisation should work. This does not mean a super
government. National sovereignty requires that decisions
concerning national policy shall be retained in the hands of
national governments. With that there is no quarrel. But
an International Trade Organisation, if governments so will it,
can acquire experience and understanding which will make them
glad to seek its advice and guidance in the fields where its
experience and understanding are relevant. Unless this will
is there, the structure we have planned will remain a
skeleton.
At the opening of this Session I said that the present
time was auspicious for the work we seek to do. The world is
not beset by the wastes and bitterness of unemployment. True,
many countries face desperate problems, but the nature of the
problems is clear, and, given time, the physical means for
their solution are at hand. Furthermore, countries not so
beset by problems clearly have the resources with which to
P
13 14 E/PC/T/PV.2/5
help, Above all, there is in the minds of the peoples of
the world a willingness to solve their problems in ways which
do not create problems for others, and a conviction that the
hope for the future lies in common action. This willingness
and this conviction grow out of our experiences of the past,
but do not let us forget that in the economic field it is made
possible by the fact of full employment. The problems of
full employment are the problems of shortages: and shortages
clearly call for common action. If this situation is replaced
by one of widespread waste of resources and markets are once
again glutted with unsaleable surpluses, the mood of
cooperation will be gone.
There are times when the precariousness of this situation
appals me, We cannot tell how much longer it will be possible
to do the things we know it is necessary to do. The tide is
still running with us, but we may even now have missed the
flood. Let us be sure that we act before the tide turns,
CHAIRMAN (Interpretation): I thank Dr. Coombs for his
speech, and I call upon the second speaker on my list, the head
of the Belgo-Luxembourg Delegation.
Baron van der STRATEN-WAILLET (Belgium-Luxembourg)
(Interpretation): Mr. Chairman, Ladies and Gentlemen The
full participation of the Belgium-Luxembourg Economic Union
.in the work of the Preparatory Committee is a clear indication
of the interest we take in the preparation of the Draft Charter,
and also of our earnest intention to contribute our full share
to the major attempt that has so far been made to achieve a
return to the freedom of exchanges.
As you know, the Economic Union has already progressed
towards this freedom of exchanges, We have adopted this policy P 15 E/PC/T/PV.2/5
because we consider that the best incentive for renewed efforts
on the part of a people having suffered from fatigue and
discouragement under long enemy occupation is to offer an
immediate and material reward for work. The good effects of
this policy are manifest in the increase in production and the
speeding up of the work of reconstruction.
We are therefore in a happy position with respect to many
of the provisions of the Draft Charter, particularly those
which affirm the right of every country to economic development;
which organise united action to reduce excessive variations of the
price of primary commodities; which protect investments and thus
aid the development of young countries; which regulate
restrictive business practices and tend to eliminate the abuse
of economic power.
Sound caution and realism require that due account should
be taken of the fact that normal economic conditions which are
necessary for the full attainment of the long-term objectives of
the Charter do not at present exist, and nations have been
obliged to resort largely to restrictive practices. Wisdom
indicates that these measures are temporary exceptions which, in
the long run, would be contrary to the attainment of the
objectives of the Charter. We have therefore acted wisely in
stipulating in the Charter that these provisions should be
revised in the light of experience, and the period before revision
should, we think, be shortened considerably.
These remarks spring from our desire to look far ahead and
to create something permanent. We are confident that our
ambition will be accomplished.
The long months of work have indeed shown that each
nation represented here shows the same determination to succeed
in our task. I may add that a team spirit has developed among P 16 E/PC/T/PV.2/5
us, born from mutual knowledge and respect, and that it
constitutes the base on which we have founded the success of
our initial efforts.
I want particularly to express my appreciation of each
and every delegation, and especially of our partners, the
Netherlands Delegation, with which we are working more closely
every day, under the sign of "BENELUX".
May I also express our gratitude to the President, whose
manner in discharging his delicate functions I greatly admire.
I would like to conclude with thanks for the Vice-Presidents,
M..Colban and Mr. Wilgress in particular.
As for M. Wyndham-White and Mr. Lecarte, and in fact
the, rest of the Secretariat, praise should not be stinted.
They have carried out their work with zeal and self-sacrifice
all through this long session. E/PC/T/PV 2/5
CHAIRMAN: I thank the Head of the Belgium-Luxembourg
Delegation for his statement, and I now call upon the third
speaker - the First Delegate of Brazil. I would like to draw
the attention of the Delegates and the public to the fact that
the translation of the speech delivered by the First Delegate
of Brazil will not be simultaneous, but will follow.
H.E. Antonio de Vilhena FERREIRA-BRGA (Brazil):
We have all today a reason to feel satisfied. The Preparatory
Committee of the Conference on Trade and Employment is completing
a substantial part of the programme of its Second Session. It is
already in a position to submit to the Economic and-Social Council
of the United Nations the Draft Charter for International Trade
which will be the working document of the Plenary Session at
Havana in November next. Some problems - fortunately not many
of them - are still pending a final solution. We sincerely hope
that the Plenary Conference will be able to find a solution to then.
A simple glance at the ground already covered-since the
first study initiated by the League of Nations immediately after
the first World War, down to the preparation of the present draft,
will show us, even in the light of a very exacting analysis, that
the positive value of our efforts considerably overrides the
negative aspects. This further persuades us that we are on the
right road, and that thanks to an improvement in international
business practices and to the setting up of a discipline which
will have to govern these practices, humanity will be able to
live happier days.
On the other hand, the draft we have just prepared is not
due to improvisation. If in its origins it hails back to
studies and observations whidh were started a long time ago, it
is unquestionably the experience of Governments represented at
17
V V 18 E/PC/T/PV. 2/5
Geneva, their clear vision and their remarkable understanding of
the necessities and aspirations of present Mankind, which have
led us to achieve work for which we can duly hope the appreciable
support of the other nations which will participate in the Havana
Conference.
We see with pleasure that United Nations are directing their
efforts with the aim of completing on the economic international
level the work of peace and fraternity which they are already
achieving on the political level: work to which Brazil has always
wholeheartedly adhered.
The Brazilian Delegation considers that on the economic
level the world. is heading more and more towards the integration
of its unity. It therefore believes that all efforts aiming at
a progressive raising of the standard of life of peoples, the
achievement of full employment as well as economic and social
development, must be undertaken in very close co-operation by all
nations, without which only very terrible consequences can be
expected.
It was with this thought that we came to Geneva; that we went
to London and that we are proposing to co-operate at Havana,
having in view the attainment of the objective mentioned. 19
G E/PC/T/PV. 2/5
Without losing sight of the essential interest of our
economic development, including our necessity to industrialise
our country, we have always expressed quite sincerely our view-
points at the Preparatory Committee.
On the other hand, in the spirit of co-operation which guides us,
we have always accepted the obligations which occur in reaching
a conciliatory solution, and have considered the average of the
interests involved.
The mare fact that we have only made two reservations,
in spite of the number of provisions in the Charter, and the
magnitude of the problems which it raises, affords clear evidence
of the conciliatory spirit in which we have always acted.
Whatever criticisms have been made against our Draft, which
of course may still be improved, we sincerely believe that on
the level of international economy, after implementation of the
Charter, trade will develop in a more satisfactory way than before.
We also think it is advisable to express at this time our
conviction that the success of the Charter and of the Organization
which will have to put it into force, are now connected with
the manner in which this implementation will be accomplished.
One should not forget it is better to have imperfect laws
and good executives than good laws and bad executives.
I hope that the question of voting in the Assembly, and
of the constitution of the Executive Board of the Organization,
will be considered by the Plenary Conference by comparison with
a criterion, a, truly democratic criterion,capable of assuring
to all Member States under equal conditions a full participation
in the work of the Organization, and of representing the
community in a spirit of impartiality and fairness. 20
G E/PC/T/PV.2/5
In stressing these two problems among all others, particularly
that of economic development, and in attaching great importance
to it, I simply stress once more our trust in the results, which
will be achieved by the International Conference on Trade and
Employment.
At the same time, I wish to assure the co-operation of my
Government, when the occasion will arise for it to implement the
action provided for in the Charter; and I do feel full of trust
that we will finally achieve an improvement of international trade
and that in the very near future it will work itself free of its
present hindrances.
We still have to continue tariff negotiations. The Brazilian
Delegation wants to express its good wishes and hopes that it
will achieve final results within the provided time limit.
After five months of work we must be able to submit to other
nations at the time of the Plenary conference the General
Agreement on Customs, Tariffs and Trade as a remarkable example
of our spirit of conciliation and as a witness of the sincerity
with which we have conducted our work.
CHAIRMAN: I now call on the next speaker, the Hon. Mr.
L.D. Wilgress, First delegate of Canada.
Mr. WILGRESS (Canada): Mr. Chairman, Ladies and Gentlemen:
~~~~o- onteln od .dn
We have now rerchleadanother mil ston? on the long road Thfing
to the establishaent of en International Trade Organizetion.
This Organization is designed to bring order into what
otherwise would be cha ohtic and confused conditions affectingte
international e-change of goods. We embarked on this road as
long ago as December, 1945, when the Government of the United
States of America mad; public and transmitted to other Governments 21
E/PC/T/PV. 2/5
for their consideration a document entitled "Proposals for
Expansion of World Trade and Employmentl. The principles under-
lying these proposals were given official recognition by the
United Nations when, in February, 1946, the Economic and Social
Council, at its First Session, adopted a resolution for an
International Conference on Trade and Employment to consider the
creation of an International Trade Organization. On that
occasion the Council established the Preparatory Committee whose
function it has been to work out the text of a Draft Charter and
to make arrangements for the holding of the World Conference.
The First Session of the Preparatory Committee commenced
in London on October 15th of last, year and since that time, with
only short intervals, the seventeen countries who have been active
in the work of the Preparatory committee have been in almost
constant consultation. After the First Session concluded its
work on November 26th, the Drafting Committee met at Lake Success,
New York, from January 20th to February 25th. A few weeks there-
after, on April 10th, the Second Session of the Preparatory
Committee was convened in Geneva, and now, at this plenary
meeting, we have approvred the final draft of the Charter which is
to be submitted for the consideration of the many countries and
separate customs territories meeting together in the World Trade
Conference at Havarna, Cuba, on November 21st.
Accordingly, we have concluded this part of our task. There
still remains to be completed the multilateral tariff negotiations
which the Preparatory Committe at its First Session decided to
sponsor as part of the preparation for the establishment of an
International Trade Organization. We have every reason to
believe that the same spirit of co-operation which has enabled us
to surmount the difficulties inherent in the preparation of a Draft
Charter will also enable us to overcome the difficulties connected 22
G E/PC/T/PV. 2/5
with the multilateral tariff negotiations, and that before the
delegations here represented finally depart from Geneva there
will be approved the text of a General Agreement on Tariffs and
Trade, embodying schedules of tariff concessions which the parties
to the Agreement will grant to one another.
The very fact that it has taken so many months to prepare an
acceptable Draft Charter is a clear indication of the complexities
and difficulties of the task with which we have been confronted.
I have no hesitation, therefore, in stating that we can be
satisfied with what we have achieved. The Draft Charter which we
are forwarding for the consideration of the World Conference is
not in every respect the document which any one of the countries
here represented would have liked to have seen emerge from our
deliberations, but I believe that it is one which the
delegations feel they can recommend to their governments. It will
be left to the World Conference to discuss this Draft Charter and
endeavour to secure the agreement of the other countries to the
setting up of an International Trade Organization on the basis of
such a Charter.
The fact that the Draft Charter does not entirely meet the
wishes of any one delegating signifies that it represents a
compromise between the conflicting views and diverse interests of
the countries which have been members of the Preparatory Committee.
This is inevitable when one takes into account the various stages
of economic development of these countries, their different economic
structures, and the divergent philosophies underlying the
economic policies pursued by their government s. That it has
been possible to achieve such a large measure of agreement in the
face of such divergencies is an encouragement to those who feel
that the future peace and prosperity of the world are dependent
upon international co-operation. ER
The attitude of the Canadian delegation towards the work on
which we have been engaged was summed up in the speech which I
delivered on April 11th at our opening plenary meeting, during the
course of which I said:
"Never before have the problems of international economic
cooperation been approached in such a comprehensive manner. The
attempt to f ind solutions on a piece-meal basis has been one of the
reasonss for failure in the past. The achievement of a expanding
volume of trade and rising standards of life throughout the world
call f or effective international cooperation in respect of each of
the important phases of economic policy concerning employment, economic
development, commodity arrangements, restrictive business practices,
state trading, customs administrations, as well as the level of the
more direct barriers to trade. One of our principal tasks will be
to maintain the consistent purpose throughout this wide and complex
field of international collaboration. While we should, as far as
possible, seek to accommodate the differing situtions and the
legitimate aspirations and needs of the various nations of the world,
we must not, on the other hand, resort to expedients and indulge in
incompatibilities which would destroy our general object ive."
I then went on to say that no country in the world has a more
vital interest in the success of our deliberations than Canada.. We
have been blessed by nature with an abundance of natural resources
which the industry and skill of our people have developed to create
surpluses of which the whole world stands in need. It is Only
through the cooperation of other countries that. we can assure our
people of a better way of life by exchanging our surplus products
for those surplus to other lands. In this way we can make our
contribution to a better way of life for the peoples of these lands.
23
E/PC /T/ T/PV. 2/ 5 ER 24 E/PC/T/PV.2/5
We who have participated in this Conference have been impressed
with the spirit of accommodation which certain delegations have shown
to meet the wishes and particular interests of other countries.
This is indicated by the extent to which the Draft Charter which we
have approved to-day differs from the original Draft Charter which
the Government of the United States presented to the First Session
as a basis for Discussion. The Canadian delegation was in general
prepared to accept the compromise that emerged from the First Session
even though there were more qualifications and provisions for escape
from the basic rules of internationaI commerce than we would have
liked to have seen incorporated in an International Trade Organisa-
tion Charter. Here at Geneva efforts have been made to broaden
these escape clauses. If there efforts had been succesful there
would be little left of the basic rules under which an International
Trade Organisation can operate effectively. Fortunately, this
danger has been realised by the majoruty of the delegtions. The
result has been the submission to this Plenary Session of a Draft
Charter that should form a generally acceptable basis for the eventual
establishment of an effective organisation.
We consider unfortunate the distinction which has so often been
made between devoloped and under-devoloped countries. We do not
know to which of these two categories Canada belongs since no Canadian
will admit that the development of Canada has reached completion.
It is true that the different countries represent various slages of
development and that nothing should be done which would prevent the
further development of any country. It is necessary, however, to
realise that in this process of development each country requires
the cooperation of other countries. This cooperation can only be
attained in full measure if we can agree upon a set of rules which
will prevent any one country from acting in a manner that prejudices
unduly the interests of other countries. That is what we have been 25
ER E/PC/T/PV. 2/5
endeavouring, to attain here. Our discussions have demonstrated
that no one country, even in its own interests, should pursue a
particular policy without regard to tho interests of other countries.
Any further attempt to upset the balance which has been obtained
between the interests of all countries would jeopardise the foundation
of the structure we have been engaged in erecting. Each country
should realise that there are practices which they have been adopting
which must be modified in the general interest of cooperation among
countries .
Taking the Draft Charter as it was presented to us to-day, we
see that the document represents in many respects an advance over the
Draft Charter which resulted from the work of the First Session and
the Drafting Committee. Nearly all the chapters have been improved
both in respect of form and substance. There has been a better
adaptation of the rules to the realities of to-day. Thus it has
bea me clear that what we are endeavouring to establish is a long-
term set of criteria and rules for the conduct of international trade
which will be fully effective only when the world recovers from the
essentially short-run effects of the war. After an upheaval of
that magnitude it would be too much to expect that the world should
escape the many maladjustments which majorwars always entail. These
maladjustments in part are derived from the great dependence and
responsibility which has to be placed for some years upon the productive
capacity of those countries whose production was not impaired by the
war. Until the other countries restore their productive capacities
to normal it cannot be possible for us to have equilibrium in the
exchange of goods which will permit us to apply fully those rules
that are in the long run essential to the cooperation of countries
for the common good.
It is this greater realisation of the realities of the present
situation that has enabled us to improve the balance of payments 26
ER E/PC/T/PV. 2/5
clauses in the Draft Charter. In the view of the Canadian delega-
tion there has also been an improvement, both in form and substance,
of those parts of the Charter which relate to State trading, sub-
sidies, restrictive business practices, inter-governmental commodity
agreements, and the organisation of the International Trade Organisa-
tion. While we appreciate the reasons which have led to changes
in other parts of the Charter, we fear that too often there has
been a tendency to place on the future Organisation the settlement
of difficulties which should have been resolved in the Charter it-
self. The future International Trade Organisation is one which
offers much hope for the world. We would not like to see it have
to shoulder tasks which might bring it into discredit if these tasks
were beyond the capacity of any organisaton to perform.
The attitude of the canadian Government towards the new draft
of the Charter is, not likely to be different substantially from the
attitude adopted towards the draft that emerged from the First
Session of the Preparatory Committee and the Drafting Committee.
In introducing the Budget for the present fiscal year in the
Canadian House of Commons on April 25th, our Minister of Finance
had this to say about the Draft Charter:
"There are in the proposed trade charter a good many qualifica-
tions and escape clauses applying particularly to the vitally im-
portant parts of the agreement that relate to quantitative restric-
tions on trade. Good arguments can be made, and are made, for each
of these. But we must guard against the danger that if too many
of them are included in the Charter, the sum and substance of them
all, taken togethermay undermine many of the positive benefits which
the Charter is intended to give to each of the agreeing countries." 27
S E/PC/T/PV2/5
I cannot conclude my remarks, Mr. Chairman, without making
some reference to how much we all owe to you for the manner in which
you have presided over our work and have continued to give us the
benefit of your long experience and your unfailing tact. I cannot
omit also a reference to the high standard of efficiency attained
by all branches of the Secretariat under the able leadership of
Mr. Wyndham White.
Finally, I feel hat we have been very fortunate in having the
privilege of conducting our deliberations at Geneva. The example
which Switzerland has given us of co-operation between diverse
racial groups and the combination of a high standard of living with
liberty for the individual had been an inspiration to many of us
in the task on which we have been engaged. I am sure we are all
very grateful for the hospitality we have enjoyed from the
authorities, both of the Canton and Republic of Geneva and of the
Swiss Confederation.
CHAIRMAN (Interpretation): I thank the First Delegate of
Canada for his statement. I will now call upon the First
Delegate of China.
H.E. Mr. WUNSZ KING (China): Mr. Chairman, Ladies and
Gentlemen, I wish first of all to add my name to the list of
admirers of our Chairman, whose high qualities of leadership have
made this Conference a success. I wish also to add a word of
warm tribute to the Executive Secretary and the members of the
Secretariat, and all my colleagues, for their co-operation in the
work of this Conference.
It is indeed a source of satisfaction that after almost five
months of unceasing work the Charter of the future International
Trade Organization has gone through i ts second reading. One
more milestone is therefore registered on the long road to the
final goal of a balanced and expanding world economy. I feel 28
S E/PC/T/PV/2/5
sure that all of us gathered here today have reason to be proud
of our contribution and achievement at this second stage. With
all its drawbacks and imperfections, the Draft Charter is an
admirable document with which to start our work at the World
Conference.
The full, frank and penetrating discussions which took place
during these long months of sweat and toil by the lakeside of
Geneva have helped to put in proper perspective some of the
intricacies involved and some of the difficulties inherent in
the problems with which the Members of the Preparatory Committee
were confronted. The participating countries have brought to
Geneva, as they had brought to London, at least two different
conceptions on the basis of which they approachod the problems
in different ways. One of the conceptions is that the only
road to world prosperity is through the universal application
of the policy of free markets, according to which the Charter
should contain as many such provisions as possible as will ensure
access of traders on equal terms to markets, products and pro-
ductive facilities. The other conception seeks to emphasize
the attainment of full productive employment and the fostering
of economic and social development as the prerequisite for the
expansion of international trade. These differences in con-
ceptions have inevitably resulted in differences in the ways of
approach and emphasis. While an honest attempt has been made
to harmonise the divergencies of views which emerged from time
to time in the course of the deliberations, the fact remains that
the first conception seems to pervade and dominate the Charter
as it stands in its present form.
Again, the main idea underlying the endeavour to draft a
Charter such as the one now before us is doubtless to prepare
a blue-print for a new pattern of thoroughfare for international
traffic which should be broad enough to accommodate different 29
S E/PC/T/PV/2/5
modes of transport, free of all types of obstructions and barriers.
This is, of course, an excellent idea, but at the same time it
appears rather difficult to understand how the maintenance of
some of the existing trade barriers is to be tolerated on realistic
grounds, whereas in the same breath all future restrictive measures
of similar character are to be discouraged or prohibited altogether,
even for the legitimate purposes of economic development.
So far as my country is concerned, Mr. Chairman, I feel I
should tell you that China is at present facing great economic
and financial difficulties, which are mainly due to long years
of war and enemy occupation. The post-war years have witnessed
an ever-widening gap in her balance of payments, and the
difficulties arising therefrom have been acc-n:.uated by a large
deficit in the balance of trade. At a time when we badly need
a wide range of essential imports which would provide us with
some of the minimum requirements we had to forgo during the
war years, and which would help us in our immediate tasks of
reconstruction, let alone the development plans, we have had to
tighten our belt still further so as to reduce the gap between
imports and exports. Even at the present low level of imports, we
might have to carry through the current year with an unfavourable
trade balance to the extent of something like fifty per cent of the
last year's deficit, unless our export position materially improves
in the coming months. Moreover, the task of rehabilitation to make
good our war damage is far from complete, and the plans for urgent
relief and immediate reconstruction, not to mention those for long-
term industralization purposes, have yet to be implemented.
I wish to assure you once more, Mr. Chairman, Ladies and
, _ , , _ 30
S E/PC/T/PV/2/5
Gentlemen, that my country wholeheartedly welcomes the
initiative and efforts to create a world trade organization
whose aim is to attain not only the negative objective of
removing obstacles to the free movement of goods and the mutual
exchange of services, but also the positive objective of
promoting higher standards of living, full employment and
general economic development. And it is precisely with this
object in view that we would like to have the opportunity of
examining more carefully those stipulations in the Draft Charter
which, quite contrary to the intentions of the original authors,
might have the unfortunate effect of increasing instead of
mitigating our presents difficulties, or hindering our future
economic and social progress, or perpetuating the stage of
economic under-development in which we find ourselves today. 31
J. E/PC /T/PV.2/5
In making the foregoing remarks, I do not intend to criticise
any one of the delegations which took part in the discussions of
the Draft Charter in Geneva and in London. I am simply telling you
some of the plain truths. I believe the time has come for some
plain speaking on our impressions about the Charter now that we have
concluded the second stage of our work. I hope that the remarks
I am making and those which my colleagues have made and will make
will be helpful to those who will attend the World Conference in
Havana.:
The discussions we had in London and in Geneva were more or
less on a technical level, but when we brine our Magna Carta to
Havana, our discussions will be held and our decisions will be taken
on a higher level. There in Havana, I am confident that we shall
have the benefit of some leadership which will be actuated by
altruistic motives, with full realisation of the importance of
economic progress and stability as one of the main factors for the
maintenance of international peace and security, and guided by the
principle of fair dealing on which President Truman laid stress in
his speech at Baylor University in February, 1947, the speech to
which our Chairman referred. I therefore wish God-speed to our
Draft Charter.
Thank you.
(Interpretation):
CHAIRMAN/: I thank the First Delegate of China for his
statement, and I now call upon the First Delegate for Cuba.
MR. S.I. CLARK (Cuba): Mr. Chairman , Fellow Members of the
Preparatory Committee, Ladies and Gentlemen:
It is a great pleasure for me to express, on behalf of the
Cuban Delegation, its satisfaction with the successful conclusion of 32
J. E/PC/T/PV.2/5
the strenuous and complicated work, in which we have all shared
alike during the four months and a half dedicated to the revision
of the Draft Charter for the International Organization of Commerce.
Some members of our Delegation thought, more than once, that it
would be impossible to reconcile the naturally divergent points of
view of eighteen nations. For, it it is true that they represent
the bulk of world economy, it is also true that they brought face-
to-face the problems and interests of agricultural, industrial and
commercial countries; highly-industrialized and under-developed
states; the strongest and weakest countries from the financial
point of view; as well as the producers and consumers. In spite
of all this, we have defended with vigor our technical points of
view. We have fought gallantly for the legitimate interests of
our countries, and, to the credit of the delegations here represented,
we have been able to reach agreement on almost all fundamental
issues. Except for a very few points, on which we have reserved
decision until we are in a position to benefit by the wisdom and
co-operation of the other nations of the world, we think that we
are presenting to the international public opinion a document of
high and technical value.
The Charter has the advantage of presenting to the statesmen
and technicians, as well as to the middle man, the man of production
and the labourer, the purposes, objectives and undertakings of the
International Trade Organization. It correlates the importance
of demand, production and employment in the expansion of trade and
betterment of economic conditions of life. It has emphasised the
permanent value of the economic development of the nations and the
influence of capital investments in the achievement of the common
objectives. 33
J . E/PC/T/PV. 2/5
The commercial policy set down, is the most daring effort to
reduce the high tariff barriers, to eliminate the preferential rates,
the tax discrimination, the quantitative restrictions and other
restrictive business practices ever jointly undertaken by so many
nations. To try to co-ordinate systems elaborated through
centuries of selfishness and mistrust is, by itself, a great work.
In the attainment of these lofty objectives, much has been
accomplished, but more will have to be done.
The Cuban Delegation has had to reserve the position of its
Government in relation to certain principles of internal taxation,
elimination of preferentials and protective measures with respect
to national production. It is our hope that when we meet again
at Havana, in view of the many accomplishments here and with the
added vigor of the nations invited to the World Conference, it will
be possible to understand our viewpoint on these vital questions.
We assure those with whom we have worked here, as well as those who
will meet with, us later for the first time in this enterprise, that
we shall have an open mind to their arguments.
We realize that our work has not been perfect. It is the
result of compromise in many cases. It is the consequence, in
others, of the Violent agitation of a world whose economy is at
boiling point, shaken not only by the inheritance of the world war,
but the fears of the postwar too. Yet, it has been a noble effort.
The Geneva Draft is only a "working paper", but it is intended to
implement the manner of attaining higher standards of living, full
employment and conditions of economic and social progress and
development, facilitating, through the promotion of mutual
understanding, consultation and co-operation, the solution of the
problems of international trade. 34
J. E/PC/T/PV.2/5
On rendering our modest contribution to this gigantic effort,
we have had in mind always the needs and interests of our people,
and also those of the other smaller nations and under-developed
countries not represented here. If we have not done more, it is
simply because we could not.
We have finished the Charter discussions. We will continue
now the work of the tariff negotiations, directed to the signature
of a General Agreement on Tariffs and Trade, in order to show that
the International Trade Organization is an instrument capable of
producing realistic results. We hope, we earnestly desire, that at
the end of the tariff negotiations, we will be able to express
ourselves as we do now. With the good-will and mutual understanding
of all, pessimism must disappear.
Gentlemen, we have worked, and are continuing to work hard, but
at this time I should like to take the opportunity to remind you that
if there has been any success in relation to the vast preparations
of the Charter of the International Trade Organization, it has not
only been by virtue of the efforts of the Delegates, but due to the
magnificent and untiring support of the Chairmen, the Secretariat
and all the other men and women in this beehive of the Palais des
Nations. To them, our deep and heartfelt gratitude.
I thank you. 3 5
P
E/PC/T/PV. 2/5
CHAIRMAN (Interpretation); I thank the First Delegate of
Cuba and I now call upon M. André Philip, First Delegate of France,
M. Philip's speech will be translated after it has been delivered.
M. Andre PHILLIP (France) (Interpretation): Mr Chairman,
Yellow Delegates: After four months of very arduous work we
have reached today a first result in our task. I think we car
be proud and congratulate each other for having reached this
stage since it was reached only after many difficulties and
obstacles in our way had been overcome.
The text we have now prepared for the Havana Conference is
extremely important and it also constitutes a compromise between
various interests, various conceptions and various doctrines.
But it is a very constructive compromise. We can bring to Havana
something which is really new and something which is workable in
practice. And it was not so easy to achieve agreement between us,
because in our Conference Sessions each of the nations represented
here feels on the one hand the necessity for constructive
cooperation, but each nation at the same time finds itself
confronted with so painful and so difficult a problem that it
has a tendency, under the pressure of public opinion, to envisage
the solution to this problem in a national rather than an
international f ramework at the autset.
But there is also the realisation, more and more widespread
among the nations, that we are all in the same boat, and that the
problem with which we are confronted must be solved by international
solution. We must solve this problem all together, or else we
shall all reach chaos and disaster
In this four months we have revised this task through goodwill
and determination of us all and through the very good work put in
by our Secretariat. I wish also to pay tribute to the qualities of
our Chairman, those <_.::'. '-. ry action. 4. 1t.'ted in time of need
and in difficult situations.
Now we have succeeded in presenting to the Havana Conference
a text which is precise in its aims and at the same time realistic
and constructive in that it shows the means to achieve these aims. 36
V E/PC/T/PV. 2/5
I said that this Charter was precise in its aim, and the
first aim, of course, was the development of international trade
and the exchange of goods. This first aim was the starting point
of our work: our work arose from the necessity of removing
barriers and the excessive protection which was one of the
causes of our miseries after the last War and which even
endangered the world peace. But we can say that the development
of international trade and exchange is not an aim in itself: it
is not sufficient to have the aim - we must also provide the
means of achieving the aim, and that is even more important.
The supreme aim we pursue is the raising of the standard of our
people, the achieving, of full employment of all productive
resources, the development of production, and the increase of
the income of all the peoples.
Thus we established at the start the indispensable connection
between the economic and social fields. As we all know, the
economic measures which might be taken are only important when
they create the framework for the development of all human beings
everywhere, and to achieve its aim our Charter is indeed a
realistic document, as it has taken into account difficulties
which exist at present and which may arise in future, and it
has provided the means of overcoming the difficulties.
Some of our colleagues may even think that perhaps we have
taken the difficulties too much into account, but I for one
believe that the draft Charter, in this respect, constitutes a
marked improvement on the efforts which were made between the
two Wars. Efforts were made to develop trade, and high ideals
were propounded; but whilst these ideals were very high, the
obstacles were not, perhaps, sufficiently foreseen, and the
result was, as we all know, that when the crisis of 1929 - 1931 37
arose all the drafts - all the nice papers which had been
prepared-collapsed, because the world was suddenly faced with a
serious unforeseen situation which led each nation to .try
desperately individual solutions hastily applied, which finally
aggravated the lot of us all.
Our text is therefore an improvement, insofar as it
realizes the difficulties, present and future. It is thus a
structure which is realistic and which takes all possible
obstacles into consideration. We foresaw the day when the
present crisis of insufficiency and lack might develop, and when
a new crisis might come, as we have known in the past, and we have
posed as a principle the principle of collective responsibilities
of all nations, whether they might be in a deflationary situation
or the reverse, and also posed the principle that any decision
that might be taken in time of crisis must be taken in
conference. We took into account the difficulties and the
needs - the special needs - of newly developed countries. We
took into account the special case of countries which were ruined
by the War and which are faced by the problem of reconstruction
and rehabilitation. This is done by Articles 21 to 23 of the
Charter. We have allowed such countries to apply quantitative
restrictions and temporary measures in order to face their
special difficulties, and in that respect I would be very glad
if I could share the opinion expressed by dy Belgian colleague
when he wished that it would be possible to reduce the delays
which the Charter has given in that respect.
I would be very glad to share his opinion, because that
would mean that the reconstruction and rehabilitation of those
Countries is going on more speedily than we think at present.
But thinking of the past I would not like to be too optimistic,
and recent experience has shown also that a too hasty return
to freedom and a removal of control may make nations run the
risk of going against the general interest.
E/PC/T/PV.2/5 G 38 E/PC/T/PV.2/5
The text we have prepared provided rightly for steps to
be taken for reconstruction which would be gradual, in order
to realise the aims which we have defined as explicitly as
possible, but taking into account the possible difficulties, and that
of finding the means to overcome them.
There is one essential means to overcome difficulties, and
that is to create a really international and efficient and
responsible Organization; and in this connection we have provided
for the consultation of the Organization, for its authorization
in some cases, and for its intervention whenever there are new
developments in industrial organization, agreements on basic
commodities and so on. We have thus provided a possibility for
recognizing to some extent a part, at least, of the national
sovereignties in favour of the international organization we are
proposing to create.
I believe that the development can be pursued and that the
obstacles can be removed only if we create a real international
institution enabling us all to transfer some of the powers we
have respectively economically to such an international
organization; and I agree with what my Australian colleague said
when he said we had created a skeleton. We have really created
only, for the time being, a framework; now we have to instil life
into that skeleton. We have to ask our various governments to
show the will to realise this task, by giving the necessary
authority to the Organization which will arise from the Havana
Conference, and by going speedily towards the ideal we have
propounded by the realistic means we want. We also went to have,
as soon as possible, this General Tariff Agreement for lowering
barriers and developing exchanges in goods and investments.
I think that by our common efforts and goodwill we shall make
from that Charter a living reality. G 39 E/PC/T/PV. 2/5
CHAIRMAN: I thank M. Andre Philip for his statement, and
now call upon the First Delegate for New Zealand.
Mr. J.P.D. JOHNSEN (New Zealand): At the conclusion of the
second session of the Preparatory Committee the New Zealand
Delegation desires to put on record its appreciation of the
friendly and tolerant tone of the discussions and of the effort
which has been made to write the Charter in a form acceptable to
all types of economies. We believe that, as a result of this
effort, the Charter in its present form is a better and more
realistic document than it was before.
It is, however, a more complicated document than it was
before, and in the last week or two revised texts of particular
Articles have come forward so rapidly that it has been difficult
for the smaller delegations, and more difficult still for their
Governments, to give these Chapters the full considerations and
analysis they deserve. Moreover, since all parts of the Charter
are inter-related, many of the recent revisions require a re-
examination of other Articles. In our own case, these
difficulties have been increased by the fact that Wellington is a
long way from Geneva. That is why it has not been possible for us
to indicate definitely our attitude to some provisions of the
Charter, The Preparatory Committee can, however, be assured that
in the period between now and the World Conference the present
text of the Charter will be thoroughly studied in New Zealand
with due regard to the urgent need that our work here should be
brought speedily to a successful conclusion.
In the latter stages of this Session of the Preparatory
Committee our work has been made more important by critical
economic developments in the world as a whole. It has been
made more important because manifestly the Governments who have
taken the lead in the attempt to reconstruct the world trading 40
G E/PC/T/PV. 2/5
system are running a race against chaos. Everything that has
happened in these last three months has emphasised the need for an
Organization such as the ITO, through which problems of trade and
employment can be dealt with and solutions found which will
promote the welfare of all countries.
But recent economic events, besides making our work more
important, have made it more difficult. We have at this
Conference written a set of rules for world trade. Whether these
rules are entirely appropriate to the confused and difficult
economic situation in which so many nations now find themselves is
not certain. To say this is not to accuse the Preparatory Committee
of lack of realism. Particularly in the last few weeks there
have been drastic revisions designed to make the Charter a
more workable document in the light of current economic realities.
Whether these revisions have been adequate we do not know, since
none of us can know what will happen in the next few years - or
indeed months. It is, therefore, necessary to recognise that,
while the objectives and. the broad principles of the Charter
must be adhered to, some of the detailed rules will need to be
administered with caution and understanding in the early years
of the Organization in dealing with particular situations.
The New Zealand delegation desires in conclusion to
express the hope that the protracted and difficult work of the
Preparatory Committee will. bear fruit at the World Conference,
and that the Charter in its final form will be acceptable to all
countries as a basis for co-operation in the task of raising
standards of living through the development of economic
resources, the maintenance of full employment, and the expansion
of world trade. 41
E/PC/T/PV. 2/5
CHAIRMAN : ( Interpretation): I thank the delegate of New
Zealand for his speech and will now call on the head of the South
African delegation.
Dr. J.E. HOLLOWAY: The great battle of Geneva is over.
The New York draft of the Charter has emerged from the rough handling
to which it has been subjected, greatly increased in volume, some-
what materially reduced in substance. Some articles have achieved
an obesity, alarming in so young an infant.
It was inevitable that after lengthy commercial and military
warfare much room had to be found for compromise. It was more
important to establish modest rules for international commercial
good conduct than to reject what was within reach because one could
not get more. Throughout the conference the South African delega-
tion advanced the view that no irreparable damage ti the main
objective would result from making concessions to the difficulties
in which particular countries find themselves, as long as there
was no derogation from essential fundamental principles. Time is
a great healer and the patient has been seriously weakened by the
strain to which it has been subjected. Protective foods are for
the time being mere important than the robust regimen of an athlete,
sound in ..ind and limb.
But it is an essential condition that the whittling down of
fundamental principles should not proceed to langths that threaten
a reversion to the inter-war jungle phase of international economic
relations. The draft Charter is uncomfortably close to that
danger point. Any material weakening by the World Conference of
the present precarious balance, any further exceptions and escape
clauses, may make all the difference between modest success and
complete failure .
These remarks refer to the balance of forces inside the proposed
organisation. There is, however, another aspect of balance which is 42
of cardinal importance for i ts success. That is the balance or
unbalance inside the economic world which this Charter is intended
to serve.
In my remarks at the opening of this Conference I referred
to three stagee in the drafting of economic peace treaties - the
Brotton Woods Agreement, the American loan to Britain and the World
Charter on Trade and Employment. It is cl ear now that I was too
optimistic in assuming that the task could be completed in three
stages. There is a fourth, more fundamental than any of these
because it governs them all. It is the creation of a sufficient
measure of basic equilibrium in the mass as a whole to enable it to
serve as a platform on which those instruments can be Operated. It
is now painfully clear that that basic equilibrium does not exist
in the economic world of to-day.
There is a wide gap to be bridged between the economies which
were stimulated and strengthened by the war and those which were
run down in the cause of victory. Before that gap is bridged the
Charter can work but imperfectly and healtingly. That gap was caused
by the far-roaching, changes in the economies of various countries
made for good and sound military reasons in order to win the war.
These changes required the stimulation of the production of some
countries, the capital disinvestment of the industries of others.
The destruction of capital equipment by aerial bombing and military
operations created a need for industrial development beyond the
range of the destructive engines of war. In the countries
near the actual area
of the clash of great armies, the construction of airfields, military
hutments and other military works became more important than the
construction of factories. In the countries where armies clashed
the destruction of factories was frequently more important than their
preservation. I need not elaborate. Everyone is only too painfully
aware of the facts.
E /PC / T /P V . 2 /5 43
ER E/PC/T/PV2/5
The broad result is that there exists a vast disequilibrium
which must be corrected before normal competition in commerce between
nations becomes possible, - the competition which is postulated by
the draft Charter.
Bretton Woods, the Loan Agreement and the Draft Charter have a
set of principles in common. Many names are given to their different
phases: multi-lateralism, non-discrimination, free convertibility,
stable currencies, most-favoured-nation treatment, non-restrictionism.
In substance they form part of one whole, the freing of those economic
factors which operate for the welfare of mankind. In the long run
negation of these principles means economic war. They are an
essential element in the attempted reconstruction of world economic
relations in the long run.
But how soon, and in what measure, can these principles be
introduced? The three instruments referred to all rest on a basic
assumption - the assumption that there exists in the world a
sufficient measure of basic, equilibrium to enable them to work.
They are all calculated to correct derivations from the mean, They
are not calculated to bridge the wide gap to which I have referred.
This basic unbalance cannot be, cured by the ibstruments we have
been trying to fashion. It must be cured before these instruments
can work properly. It would be wisdom to recognise the fact that
unless in the early stages of the proposed organisation the "Articles
of the Cha rter dealing with exceptions - particularly the exceptions
relating to restrictions to safeguard the balance of payments, -
unless these Articles are to become the most important Article s of
the Charter the basic unbalance between the economies stimulated by
the war andthose damaged or shattered by war must be removed by
special measures. 44
S E/PC/T/PV2/5
I would say, in conclusion, Mr. Chairman, that the Draft
Charter, and the conduct of the tariff negotiations envisaged
therein, contain a large element of faith - faith that Members
will not only take advantage of the large scope given to their
exports by other Members but will likewise make room for the
exports of other Members in their own economies. If this
faith is not amply justified, we shall indeed have laboured in
vain.
An to you, Mr. Chairman, I would like to pay the tribute
which is due to you.
CHAIRMAN (Interpretation): As I have no speakers remaining
on my list, I will adjourn the Meeting.
The next Meeting will take place tomorrow morning at 9.30.
I would like to remind Heads of Delegations that the
Meeting fixed for six o'clock today will take place at 5.30,
for the examination of outstanding tariff questions.
The Meeting is adjourned.
The Meeting rose at 5.5 p.m. |
GATT Library | wk861kb6331 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Fifth Meeting of Commission A. Held on Friday 30 May, 1947, at 11.25 a.m. in the Palais Des Nations, Geneva | United Nations Economic and Social Council, May 30, 1947 | United Nations. Economic and Social Council | 30/05/1947 | official documents | E/PC/T/A/PV/5 and E/PC/T/A/PV.3-6 | https://exhibits.stanford.edu/gatt/catalog/wk861kb6331 | wk861kb6331_90240065.xml | GATT_155 | 4,631 | 28,183 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
RESTRICTED
ECO NOMIQUE E/PC/T/A/PV/5
ET SOCIAL 30 May 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
FIFTH MEETING OF COMMISSION A.
HELD ON FRIDAY 30 MAY, 1947, AT 11.25 A.M. IN THE
PALAIS DES NATIONS, GENEVA.
M. MAX SUETENS
(Chairman)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247).
(Belgium)
NATIONS UNIES G.
2 E/PC /T/A/PV/5
CHAIRMAN: (Interpretation): The Meeting of Commission "A"
stands to order.
We now pass on to the discussion which we postponed the
other day of Article 12 on the South African Amendment which is
in E/PC/T/W102 of 21st May.
Before I open a general discussion on this Amendment I
would ask the Delegate for South Africa to present any
observation he might deem necessary.
Mr. HOLLOWAY (South Africa): I make no apology for having
been difficult on Wednesday night, when the Amendment might have
seemed to be quite unimportant and one that could be finished
at the fag end of the Meeting.
As to the note to the Amendment which was handed in by the
South African Delegation, the intention was to raise a very
substantial question of principle, and for procedural reasons to
make Article 12 a test case. I want to nation that question
of principle straightaway. That is, whether the Draft as we
get it from New York does not in effect constitute a supra-
national authority of the ITO. In spite of the views which have
been given to me by Members of this Conference who took part in
both the London and New York Meetings, I shall try to indicate
to you in the course of my remarks that that is in fact what the
present Draft does.
I brought it up as a tatter of procedure under Article 12,
because that is the first Article under which I could raise it.
It could have been brought up under Article 35 - it might even be
said it belongs more appropriately to article 35 - but if I had.
waited until the question of principle, which influences a large
number of Articles, came in its regular order of sequence, a good
deal of time would have been wasted in the meantime, whatever E/PC/T/A/PV/5
happened, whatever way the Commission decided.
Because the decision on this question affects, firstly,
the wording of certain Articles; secondly, it affects the
substance of a number of articles, for if it is indeed the
intention of the Preparatory Committee to create an International
trade Organisation with supra-national powers, then obviously
those who under those conditions want to join the Organisation
must examine the substance of Articles very much more closely,
because it is practically the last opportunity that they will
have. As they say in the Wedding Service, "If you wish to speak
speak now, or forever hold your peace"; so that it does affect
the order very materially, and for that reason it has been raised
at the first stage - whether (or not) it could have been raised
in the order which is prescribed.
Now I want to quote to you one sentence from an Address
delivered by Mr. Wilcox - I do not see him here, but he is
probably behind me somewhere - I hope he will not mind my
quoting from an Address - it was a public Address given in
the United States of America:
3 - V E/PC/T/A/PV/5
In this Address, he said; "The I.T.O. is not a supra-national
Government. It has no powers, legislative, executive or judicial,
that would impinge upon the sovereignty of the Member States".
That exactly represents the view of the South African Delegation
as to what the I.T.O. should be.
The text, I think, is the very opposite. It gives it those
supra-national powers. When one is dividing powers of carrying
out administration, there is, I think, a clear test of whether
powers are being surrendered or powers are simply being entrusted
to a subordinate agency. If powers are being entrusted purely
to a subordinate agency, they are transferred by devolution: they
remain with the contracting parties, but they appoint an agent to
do certain things for them. However, as soon as you transfer
sovereignty you give powers of initiation of which you divest
yourself, and that is the difference between a subordinate agency
and a sovereign body.
By devolution you always exactly circumscribe the powers
of a subordinate body, and that subordinate body cannot go
beyond its exactly circumscribed powers. I wish to indicate
that we have gone a great deal beyond that in the Charter as
it is now drafted. I think the confusion in the minds of
those who think that the powers conveyed by the Charter are not
powers of sovereignty derives from the fact that at a certain
stage you pass over almost unnoticeably,.by using certain words
which you, have not tested out, into a new sphere from devolution
to sovereignty.
I think there is general agreement that the International
Trade Organization should have certain sanctional powers. It
should have the sanctional power for certain cases which is laid
down in Article 35, that is, the power to relieve other Members
of their obligations to a defaulting Member. Now I come back
- 4 - - 5 -
V E/PC/T/A/PV/5
to the point that I made, that when you transfer power by devolution
you must exactly circumscribe that power. There can be no
objection to an agency being entrusted with the task of exercising
these sanctional powers when the States who become Members of the
I.T.O. have very definitely indicated that they are prepared to
do certain things. They have, for example, contracted with
their fellows in the Organisation to bind certain rates of duty
or certain rates of preference, to give each other Most-Favoured-
Nation treatment, not to discriminate. I am mentioning these
as examples.
The question as to whether bound rates have not been observed;
whether preferences have been extended; whether discrimination
has taken place; whether Most-Favoured-Nation treatment has been
given,--these are all simply questions of objective fact; and the
International Trade Organisation is a body that can very well be
entrusted with examining those questions of objective fact and
deciding on them, and using the powers which are vested in it for
that purpose.
Here we have fixed and contractual obligations. Broadly
speaking, it covers the substance of Chapter V. Broadly
speaking I do not wish to say that it even covers everything
in Chapter V. Broadly speaking, it may also cover certain
things in Chapters VI and VII. However, as soon as you go
beyond the fixed contractual obligations which have been
given to one another by negotiations, you get into a very
much. more uncertain field. When you are dealing with Chaptere
VI and VII you are undertaking to create a certain atmosphere
for certain kinds of transactions influencing international
trade. You are going -- perhaps in some cases imperceptibly --
but you are going further than the very definite limits that you
have over the greater part of Chapter V, and the question will
have to be faced: if you want to give sovereignty to this body,
_ , ,_ , _ V E/PC/T/A/PV/5
to what extent this body should have the power to apply sanctions
in respect of Chapters VI and VII.
But I will not stand still at Chapters VI and VII, because
the principle of sovereignty comes out very much more clearly when
we come to Chapters III and IV. In Chapters III and IV we go a
great deal further in the matter of general lines of development
than we do even in Chapters VI and VII. In Chapters III and IV
we make a confession of faith. We proclaim that we hold to certain
ideals and we will do our best to carry them out. I do not want
to go into detailed wording, but the main substance of that is
that Members will take action to obtain and maintain full employment;
that they will maintain suitable labour standards; that they will
make appropriate contributions - "appropriate contributions", a very
vague phrase - to correct maladjustments in balance of payments,
that they will take action designed to raise standards of productivity.
Obviously you cannot be more than perfectly general about those
matters. - 7 -
E/PC/T/A/PV/5
Now, if sanctions are to be applied in regard to these matters,
as sanctions are being applied in the present draft, as powers kept
in this present draft apply sanctions, then you must create an
authority which is outside of the principals and which can bind
principals in the way in which, in the opinion of the outside
authority, the principal should have acted. That is sovereignty -
that is nothing less than sovereignty. There is no longer
devolution here. The power is taken away from the principals and
is handed over to an outside body. The outside body can say
"In our opinion, if certain things had been done you would have
contributed towards the objective of the Charter. You
have not done those things and, therefore, we now decide to relieve
other members of the obligation towards you." Now, it may be said
that the Organization is not likely to apply any sanctions to
4 and 5, but if it is not, then why give the power? The matter is
more important than just the question of whether it is the basic
problem and whether we wish to give sovereignty to this body or
whether we wish it to be a subordinate agency having powers by
devolution. Now, I have heard suggestions that some delegations
want to give a degree of international sovereignty to ITO. I do
not know whether that is just a general view expressed casually in
conversation, or whether that is the attitude which members wish
to adopt in drafting the Charter. It is essential, because this
is a thing which governs the whole of the Charter, which creates an
atmosphere round the drafting of the whole of the Charter, and so
that at an early stage we should be perfectly clear as to which of
the two relations we are following. When you came to the problems
the
arising out of these ideals - problems arising out of/credo to which ER
- 8 - E/PC/T/A/PV/5
you have subscribed in Chapters III and IV - you could, of course,.
deal with it in two ways. You could give sovereignty to somebody,
you could tell them "We vest in you the power to take the decisions
and we are subordinate to you in that respect." But that is not
the only manner in which we can deal with it. We are dealing with
the problems arising out of that. We can also make provisions
purely for international consultation. Now, the view might be
held that an agreement that you will discuss binds you to very
little. I want to suggest to members that, if we did that for the
general matters described in Chapters III and IV, we are making a
very big advance - we are taking a very big step forward from that
Jungle stage of international relations which we had immediately
before the war. A stage when countries lay in wait and pounced
on the commerce of other countries without even giving the roar of
warning which the lion gives before be springs on his prey. We
were then definitely in the jungle stage, but if we agree to meet,
gentlemen, around this table over these things, I think we have
made a very big advance. It is essential whether we choose between
the two methods of approach, but I do not think that even in dealing
with Chapters III and IV and the application of section 35, subject
to quite a lot of rigmarole and investigation, we have got to the
extreme view where the proponents of sovereignty for the ITO have
got their ideas written into the Charter. In Chapters III and IV
the principals of the contracting powers have at least said: "well,
we believe in this and have circumscribed as much as we could".
They have said: "The boundaries are somewhere in this or that
direction. We do not know where they are, but we know that there
are boundaries." But in the first sentence of paragraph 2 of ER
-9- E/PC/T/A/PV/5
Article 35, all pretence of having ITO powers by devolution, dis-
appears entirely. That sentence gives the ITO power in its final
analysis, to apply sanctions if any member is applying any measure
whether or not it conflicts with the terms of the Charter or if any
situation exists which has the effect of nullifying or impairing
any object of the Charter - the widest wording that you can get.
It does not matter whether it conflicts with the terms of the
Charter, it does not matter whether it does or does not conflict.
Even if it does not conflict with the wording which we have tried
our best in this Conference to limit to such an extent that we
could at least accept, then the ITO shall still walk in and say:
"This impairs (remember please the vaguest word you. can get there
with the widest meaning) this impairs in some way the objects
of the Charter and you are for it." E/PC/T/A/PV/5
Well, I cannot see how words like that can be put
into a Charter unless we accept as the basis of the Charter
the principle of sovereignty. There it would be complete
sovereignty, stripped of any sort of argument which could
make it anything else.
Mr. Chairman, the South African Delegation considers
that the Charter should be drafted on the principle of
devolution and not on the principle of surrender of sovereignty
by the contracting State. This means, in effect, that instead
of using in various parts of the Charter the vague phrase
"any obligation undertaken under this Charter", we should,
whenever sanctions are provided for, limit their application
to specific and contractual obligations and limit it very
severely, and, where there is any doubt whether it is
specific, contractual or not, or goes beyond it, then, in
order to steer clear of vesting in the ITO international
sovereignty, we should rather arrange for those doubtful
matters to be subject to consultation and not subject to
sanctions.
Mr. Chairman, there is a saying in English: "The road
to Hell is paved with good intentions." We have a very
large number of good intentions in this Charter: I hope
we are not laying paving stones to Hell.
- 10 -
S P. E/PC/T/A/PV/5
Dr. H.C. COOMBS (Australia): Mr. Chairman, I agree with
the delegate of South Africa that the issues he raises here are
fundamental, and that they are worthy therefore of the most care-
ful consideration by this Commission.
The delegate for South Africa differentiates between the
obligations embodied in the Draft Chapter. He refers to part of
them as specific contractual obligations, and describes the others
as part of the oredo to which we are adhering.
I would like to say very definitely that in the minds of the
Australian Delegation there is no such distinction between the
obligations embodied in this Charter. They are all, so far as
we are concerned, specific and contractual. It is true that
they differ a little in the subject matter with which they deal.
It is true that whether they have been implemented, observed, or
not, is to some extent a question of degree, but is none the less
a question of fact.
The delegate for South Africa referred particularly to the
obligations embodied in Chapters III and IV of the Draft Charter
and also to those embodied in VI and VII. In our opinion the
inclusion of these obligations in the Draft Charter represents a
substantial advance towards realism which has been made in the work
of this Committee.
This is not the first international conference which has con-
cerned itself with measures designed to bring about deductions in
trade barriers.The history of the inter-war years is littered with.
the records of such conference., There is little viidence, how-
ever, of their having contributed anythings sign ifcant. to thesolu-
tion of the economic problems which devastated the world in those
years. That is because the reduction of trade barriers and the
limitation of national freedom in commercial policy becomes practicable E/PC/T/A/PV/5
only in certain circumstances. Furthermore, we can be certain
that it would be good only if certain prescribed conditions are
existing. Ths whole theory on which the belief that a reduction
of trade barriers would be good for world trade, the whole theory
on which that belief is based, depends upon certain assumptions.
Those who have studied the economic theory of the last and this
century in relation to international trade, will agree that the
belief that a reduction of trade barriers will lead to a more
efficient use of the world's resources depends upon two assumptions,
firstly, that the resources of the world, human and physical, will
in any case be fully employed. It is based also on the assumption
that the balances of payments between the various countries of the
world are, in faot, in balance; that any departure from such
balance will automatically correct itself. It is also based -
although this assumption has been lass consistently stated - upon
the fact that the world economy has been continuously subjected to
the stimulus of economic development both extensive and intensive.
In the absence of the conditions implied by these assumptions it
cannot be said with certainty that a reduction of trade barriers will
lead to a better use of the world's resources or even to an expansion
of world trade.
What we have sought to do, what this Commission has sought to
do therefore in Chapters III,IV, VI and VII, is to create the
conditions in which the assumptions will be realised on which the
belief that a reduction of trade will improve the use of
the worlds resources are in fact based.
P. J. -~ E/PC/T/A/PV/5
DR. H.C. COOMS (Australia) (Contd.) Now, this is
important to those countries which are being asked to undertake
obligations in relation to their commercial policy. It affects,
in my opinion, the honesty with which they can undertake such
obligations.
Let me say quite definitely for the Australian delegation
that unless there is some reasonable assurance that the undertakings
we give in Chapter V of the Chatter are going to be implemented
in conditions in which there is reasonably full employment, in
which the balances-of-payments of the major countries of the world
are not seriousl y in disequilibrium, and if the conditions are not
such that the progressive development of the economic resources
of the world can in fact proceed, then we know that we cannot
carry out the undertakings we give in Chapter V, and it is no good.
pretending that we can.
If we face again the wide-spread collapse of international
demand that the world experienced in the 1930's; if we face a
collapse of the prices of our primary products and inability to
sell the products upon which our economy depends, we will not be
able to carry out the undertakings in Chapter V, because to
implement those undertakings in such circumstances would intensify
the already existing depression in our own economy and place
increased burdens upon the people of our country. We would,
therefore, I believe, be dishonest if we were to tell this
conference that we were prepared to accept the undertakings in
Chapter V in any circumstances.
I believe that that is true, not only for Australia, but I
believe it is true for most of the countries in the conference,
that if we face again the conditions of 1930, that they will not
be able, whatever they have put their signature to before-hand
- 13 - - 14 -
to observe the commitments which are included in Chapter V. To
us, therefore, the commitments embodied in Chapters III, IV, VI and
VII on the one hand, and those in Chapter V on the other, are
inter-dependent.
We are prepared to accept the commitments in Chapter V
provided that the world conditions are such that we can, in fact,
carry them out. That leads us, therefore, to consideration of
the point specifically raised by the South African delegate as to
whether the commitments involved in Chapters III, IV, VI and VII
should be subject to the same procedure of complaint and release
from obligations in the event of a failure to carry them out as
applied to the undertakings in Chapter V,
So far from thinking that that procedure is less important
in relation to these undertakings, we believe. it is more important,
because only in that way is it possible for a country to establish
its
that conditions completely beyond/power to control are making it
impossible for it to carry out its undertakings.
So, Mr. Chairman, we would resist bitterly any proposal to
modify the right of a country to seek a modification of the
undertakings it has given if, by the action of others, conditions
are created in which it can no longer carry out those undertakings.
In other words, if there is a world-wide collapse of demands; if
a shortage of a particular currency places us all in balance-of-
payment difficulties; if we become subject again to wide-spread
fluctuations in the prices of primary products with devastating
effects upon individual economies; if it is not possible in those
circumstances to seek,with international approval, a modification
of particular undertakings we have given, then we must think twice -
indeed, many times - about whether we can honestly undertake those
obligations. - 15 -
E/PC/ T/A/PV/5
Now, the delegate for South Africa has raised the very
important issue of national sovereignty. He has suggested that the
establishment of this procedure by which we can have our obligation
modified involves a restriction of the sovereignty of Member
governments. So far as we can see, the question of sovereignty
does not enter into this. There are no sanctions provided for in
the Charter. In the event of a country failing to carry out its
obligation to maintain employment and effective demand, to take
that case as an example, and that failure seriously impairs the
economy of another Member, it is provided that the country whose
economy is impaired on seek the assistance of the Organization
first of all in arranging consultation with the country or countries
in which these conditions have arisen. If that consultation
fails, the Organization may authorise the Member to suspend some of
its obligation to some or all of the other Members. It would, also
offer recommendations to the countries concerned. Those
recommendations could be accepted or rejected. If they are
rejected the Organization has no powers of coercion. All it can
do is release the other countries adversely affected from certain
of their obligations. Now that country could itself release
itself from those obligations by withdrawing from the Organization.
Therefore, there is no interference with national sovereignty.
What is the difference? G. -16-
E/PC/T/A/PV/5
The difference is, that instead of a country being forced-
in order to have its obligations reviewed in the light of
realistic circumstances - instead of it being forced to withdraw
from the international community, it has the opportunity to state
its case to the international community, and have its obligations
reviewed with full international approval. But the freedom of a
country which may have been the cause of these conditions is
unimpaired. If it does not wish to take necessary action to
correct the circumstances, the most that can be done is that they
must receive Recommendations. They are under no specific and
contractual obligations to accept those Recommendations.
The suggestion has been made that it would be sufficient for
us to provide for consultation. Consultation is provided for
Withdrawal from the Organisation, and the right which that would.
give to vary undertakings, persists. All that the Charter does
is to give a country affected an alternative to withdraw. It
gives it the right to appeal to the international community and.
to demonstrate that circumstances outside its own control have
made necessary a review of its obligations.
Do not let us have any delusions. That circumstances against
which Chapters 3, 4,6 and 7 are directed develop - and the
obligations in Chapter 5 will be broken; and it is, in our
opinion, infinitel y preferable that they should be varied by
consultation, by agreement that illumines with international
understanding any consideration of the effects of such alteration
on other countries. In other words, intelligently; rather than
that they should be altered unilaterally in an atmosphere of
antagonism and prejudice.
Mr. Chairman, to the Australian Delegation, the undertakings
3, 4, 6 amnd 7 are fundamental. They alone create the conditions - 17 -
E/PC/T/A/PV/5.
in which a substantial advance along the road of the reduction of
trade barriers and the development of international Co-operation in
the field of trade become possible. Upon their implementation
depends the capacity of other countries to implement their specific
contractual obligations.
We therefore feel that it is fundamental for the success of
the International Trade Organisation, and to the acceptability of
the Charter to the Governments concerned, that the interdependence of
the obligations in all sections of this Charter should be clear;
and secondly, that there should be no distinction drawn in
principle between any of those obligations.
It is obviously necessary to accept as a fact that some of
those undertakings can never be implemented to the degree of
100 per cent., and that, therefore, whether a failure to implement
them, in fact, exists, is a question of degree; and that, therefore,
we have to provide some means of determininrg whether, in fact, a
failure has occurred to a degree which represents a significant
failure affecting the conditions of other countries. But that
does not alter the nature of the undertaking, nor does it separate
it from the undertakings in other parts of the Charter which are
capable of being expressed in a way in which failure to achieve them
is precise, definite, and not a matter of degree.
But the fact that we have to be intelligent in our interpretation
of these undertakings, and in our judgment as to whether they have
been adequately implemented, does not, in fact, change the nature
of the undertakings. We stand, Mr. Chairman, therefore, firmly on
the principles that all the undertakings in the Charter are of equal
significance, essentially identical in character, and that they
cannot be differentiated from the point of view of the obligations
of the countries which have to carry them out, nor of the rights
which failure to carry them out gives to other countries adversely
affected by them.
G. -18-
S -18 - E/PC/T/A/PV/5
CHAIRMAN (Interpretation): I Wish to thank the two
speakers who have raised questions of very great importance,
It is too late to pursue these further now. We will
adjourn until Monday afternoon.
Dr. HOLLOWAY (South Africa): The Chairman of the
Steering Committee has just drawn my attention to the fact
that the business between this and Article 35, when this
matter comes up again, does not affect the issue; it just
happens that the arrangement is that way. Its Monday
conflicts with another meeting, the matter could very well
stand over until the discussion on Article 35 without
prejudicing anybody.
CHAIRMAN (Interpretation): I prefer to have a meeting
on Monday, since Monday is free in any case.
Gentlemen, the Meeting is adjourned until Monday
afternoon.
The Meeting rose at 12.55 p.m. |
GATT Library | zg665yc5268 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Fifth Meeting of Commission B held on Friday, 6 June 1947 at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, June 6, 1947 | United Nations. Economic and Social Council | 06/06/1947 | official documents | E/PC/T/B/PV/5 and E/PC/T/B/PV/3-5 | https://exhibits.stanford.edu/gatt/catalog/zg665yc5268 | zg665yc5268_90250070.xml | GATT_155 | 13,047 | 77,178 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/B/PV/5
6 June 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
FIFTH MEETING OF COMMISSION B
HELD ON FRIDAY, 6 JUNE 1947 AT 2.30 P.M. IN THE
PALAIS DES NATIONS, GENEVA
THE HON. L. D. WILGRESS
(Chairman)
(Canada)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office
Room 220 (Tel. 2247)
NATIONS UNIES J. 2 E/PC/T/B/PV/5
CHAIRMAN: The meeting is called to order.
We are assembled today in Commission B to consider Chapter VII
of the Draft Charter dealing with Inter-Governmental Commodity
Arrangements.
We shall follow the same procedure as we did in Chapter VI,
that is, we will take the New York draft as our basis and consider
any amendments that have been submitted to the New York draft by
delegations, together with any reservations or other relevant
comments given in the New York draft.
Three meetings have been allotted to us for the consideration
of Chapter VII, and while we will do our best to adhere to the
time allotted to us by the Steering Committee, we shall, if we
find it necessary, hold additional meetings in order that there may
be a very full and complete discussion on this Chapter.
We shall endeavour to reconcile any differences of use that
may be possible to reconcile within the Commission, but if after
fairly general discussion it is not found possible, we shall refer
the questions to a sub-committee with instructions that they
shall do their best to resolve the differences of view. We shall
also refer to the sub-committee any questions that are of a purely
drafting nature.
Our working paper will be that contained in E/PC/T/W/157.Rev.1.
This paper gives an annotated agenda and we will endeavour to
follow, so far as practicable, the order of the items given in this
paper.
The first question on our agenda is Item 1 under General
Comments - Re-arrangement of Chapter. The United Kingdom and
Australian delegations have suggested re-arrangement of the
Articles of the Chapter. Members of the Commission will recall
that the London text provided for four sections - Section A. General Considerations; Section B, Inter-Governmental Commodity
Arrangements in General; Section C, lnter-Governmental Commodity
Agreements involving the Regulation of Production, Trade and Prices;
Section D, Miscellaneous Provisions.
The Drafting Committee in New York reduced Chapter VII to
three stations by combining Sections A and B of the London text
under the heading of Inter-Governmental Commodity Arrangements in
General. The United Kingdom delegation have now submitted a
proposal which reverts to somewhat the same sectional arrangements
as in the London text. It contains, however, a new Article 47(a)
which sets out the order in which action is to be taken to meet
commodity differences.
The United Kingdom delegation also raised the question of the
transfer of Article 50 to Section D on Miscellaneous Provisions.
The Australian delegation propose an arrangement similar to
that adopted in New York, but including an additional Section C
covering "non-regulatory" agreements.
I would propose that we first of all have a general discussion
on the question of the re-arrangement of the Chapter with a view
to elucidating whether the sense of the Commission is that it is
desirable that there should be re-arrangement of the Chapter or not.
Also, we shall endeavour to find some indication as to the feelings
of the members of the Commission as to what re-arrangements could
best be suitable; but I propose that we leave any final decision
as to the working out of the re-arrangement, if such is considered
desirable, to a sub-committee.
Also, if we find that the majority of the Commission is in
favour of re-arrangement of the Articles of the Chapter, we should,
in our discussion of the Articles of the Chapter, still stick to
the order in which they are given in the New York draft, and take
up any new Articles that may be proposed in the order in which
they have been suggested by the delegations proposing the new
Articles.
J. 3 E/PC/T/B/PV/5 E/PC/T/B/PV/5
Is that procedure approved? If so, I would now wish to open
the discussion on the rearrangement of the Chapter. Are there
any members of the Commission who wish to introduce this subject?
Mr. E. McCARTHY (Australia): Mr. Chairman, the subject
matter of this Chapter has gone through several phases, I think,
since it was first discussed amongst the countries interested in
bringing about international commodity arrangements and in bring-
ing under some form of general review those agreements which were
already in existence; but I think up till the London meetings
there was some difficulty in reconciling the views of delegations
as to the conditions which should be precedent to entering into
certain agreements, and there emerged at the London Conference the
idea that there should be two categories.
Where the criteria which should be followed before an agree-
ment was actually made, and the conditions which should be laid down
as a preliminary to negotiations were of a rather close and clearly
defined character, it was not desired that agreements be made un-
less there appeared a necessity for them. It further was thought
that these criteria or this list of conditions might be hampering
if it were attempted to apply them to all agreements that might
come under the Chapter, so the draft was altered to provide for
what were called regulatory agreements, and what were called
arrangements.
It was clear enough, I thin k, -at least to those who were
handling the drafting of the chapter in London - that these two
categories had been provided for, but, the draft having been
arrived at doubts began to arise as to what really was meant by
arrangements and regulatory agreements. It will be noted that
Chapter VII was called "Commodity Arrangements." It then provided
for regulatory agreements, and by inference, I suggest, it was
conveyed that those which were not regulatory were arrangements.
The inference perhaps was fairly clear, but still it was an inference,
P.
4 P. 5 E/PC/T/B/PV/5
and the view that we have come to is that we should make a definite
statement in the Chapter that there are two distinct classes:
those which we now call regulatory agreements, and those which do
not come within that category. Therefore our proposition is
designed in the first place to make clear what is in the minds of
the Preparatory Committee in drawing up the framework of the Chapter
It seems to us therefore that the four sections should be restored,
not in the same form they were originally in, but in a form some-
what different from that in both the London report and the New York
report. And our objective it will be a matter for discussion
whether we have achieved it - is in the first place to say that the
Chapter deals with inter-governmental commodity arrangements: that
phrase stands - and then to devote s me Articles to the objectives of
these arrangements, the preliminaries of calling conferences where
preliminaries are necessary, and the steps that should be taken to
negotiate an agreement after conferences have been called.
Now that is set out in one section, and that section concludes
by saying that those arrangements which we visualised shall be
divided into two categories. We would call those categories - I
am not so sure that even "regulatory agreement" is a good word,
but, using that for the time being, we would call them (a) regulatory
agreements, and (b) non-regulatory agreements. It may be that it
would convey our meaning better if we said regulatory agreements (a):
(b) all other agreements which come within the arrangement. So
there you have what to us is clear: the whole Chapter is called
"Arrangements", but there are no actual arrangements, no concrete
arrangements, They are divided into two classes of agreements,
those which we call regulatory and those which are not regulatory
The second point which arises, and which is relevant to this
question of arrangements is the distinction between the regulatory
and the non-regulatory agreements. We find that the regulatory E/PC/T/B/PV/5
6
agreements are clear: we know what we are aiming at, and, subject
to what to us will be minor alterations, they stand without very
much question; but when we look to what will be in the non-
regulatory agreements we find some doubt. In fact, in looking
for concrete cases we discover that it is very difficult to visualise
an agreement which has not some form of regulation of prices, produc-
tion or trade. It is not difficult, of course, to picture agree-
ments without the regulation of prices: it is not difficult to
picture those without the regulation of production, but I have found
difficulty in thinking out an agreement on any product in which we
are concerned where you would not have some degree of regulation of
trade. But that degree might be very minor, so minor that it
would be perhaps wrong or difficult or hampering to apply the
criteria which are allowed for regulatory agreements.
Then a little further, one can also see agreements which are
perhaps an initial step in the making of a complete agreement. You
might have an agreement with a limited number of countries subscrib--
ing to it with the clear understanding that it is a first step and
that later, as more people educate themselves and those they have got
to educate to get agreement, or to get subscription to the agreement,
that agreement will develop and then will be undoubtedly a regulatory
agreement. I have thought of two or three examples to make the
point clear. One form of agreement might bring in perhaps the
United States, Canada, Australia, New Zealand, the Argentine, and
perhaps Belgium or France, and would relate to fresh fruit. Let us
make it fresh apples and pears. There might be certain conditions
laid down in that agreement which are non-regulatory, but there might
be Just one which says "Canada and the United States shall not ship
apples to Europe after 30 April and Australia and New Zealand and
the Argentine may not ship apples to Europe after 31 July." Now,
that would be a very sensible agreement. (Anyhow we might assume it
P. P. 7 E/PC/T/B/PV/5
would: we do not want to have a discussion on that; it is purely
an example). But the only regulation would be that probably the
last two or three weeks of July in the Southern hemisphere and the
last two or three weeks of April in the northern hemisphere the
apples should not be shipped, and the only regulation that you might
ask of the importing countries is "Do not take those apples after a
certain date" (They are not so good at that date anyhow, but do not
take them). But it is a regulation of trade and therefore it goes
into the category of regulatory agreements. E/PC/T/B/PV/5
The same thing might be said of certain regional arrangements
where it is laid down for a period of time that certain countries
shall take the whole of the produce of some other country. We
could have an agreement on what at the present time, which has
none of the provisions which we are actually contemplating, but
which would lay down, perhaps, that India should get its wheat
from Australia, and anything north should get their wheat
from Canada. It is a small agreement, perhaps, but it involves
the regulation of trade, so we propose that the Committee or
Commission, possibly a Sub-Committee, give some attention to that
question whether they ought not to go into the other agreements
rather than those of a regulatory character.
It further seemed to us, in looking through the Amendments
submitted by the other countries, that this second category of
agreements is non-regulatory, and one which might be expanded to include
other forms of agreement, such as America seems to have in mind
with the conservation problem they have mentioned.
I can quite see there that if you do have a Section C dealing
with all other forms of agreement other than regulatory, that that
would provide for anything in the shape of an international
agreement on commodities which it was desired to bring under the
ITO. Therefore, we think there is some importance in our
suggestion that we endeavour to define more clearly what are the
agreements other than those provided for in the articles dealing
with regulatory agreements.
There is very little more I wish to say on it. I note in
going through the Amendements again that the United Kingdom had
ideas of re-arranging in mind, also another proposed new
Article, 47 (a). They do state there that there should be two
forms of agreement. Well, the principle is really the same as
that put forward by us. We think we have gone a bit further and
G.
- 8 - - 9 - E/PC/T/B/PV/5
that ours is a little better, but we are quite prepared to
take the good parts of ours and the good parts of the United
Kingdom and put them together with the idea of getting something
better than either of us, perhaps, individually.
That, I think, covers our ideas that prompted us in putting
forward this suggestion for re-arrangements, but we would be
very interested to hear what other Delegations have got to say
about it. We are not wedded to any of the wording; we are not
sure that we completely covered what we wanted to cover, but we
did feel there was a lack and we felt we should like to make
some suggestion; but we realise that those suggestions might be
modified to quite a degree when we hear what other Delegations
have got to say.
We did, as I say, feel that there was something of a lack
there, and we are only anxious to fill it in some way or other. V
-10 -
CHAIRMAN: Are there any other speakers? The Delegate
of the United Kingdom.
Mr. J.R.C. HELMORE (United Kingdom): Mr. Chairman, if I
might comment briefly on the remarks made by Mr. McCarthy and
explain the principle underlying our suggested re-arrangement
of this Chapter, I would say that practically all our amendments
which appear on the paper are not of substance but of detail or
of drafting.
The point that we had in mind is one Mr. McCarthy also
referred to, that this Chapter does appear to those who were not
present at the birth to be somewhat ugly. Of course , the
midwives themselves remain convince in their determination that
it is the most beautiful infant ever born. However, we have to
recognize that the infant must go out into the world, and
possibly the general public will not share our view as to the
beauty. Therefore, we thought it wise to propose a measure of
plastic surgery which would perhaps make the beauty of the infant
more recognizable by those who were not present when it was born.
The main piece of plastic surgery is in our proposed new
Article 47A, which attempts to explain at an early stage in the
Chapter the difference between the conditions and procedures
surrounding a non-regulatory arrangement and a regulatory
agreement. Delegates will see that we have endeavoured to work
into the second paragraph of that amendment some words which I
will not say define arrangements and agreements, but attempt to
perform the functions of definitions of those two words. In that
way, we think that the distinction between the two parts of the
Chapter can be made readily intelligible and much more easy to
follow.
Now, I gather that Mr. McCarthy does not think that there is
E/PC/T/B/PV/5 E/PC/T/B/PV/5
really much point in having in this Chapter anything about
non-regulatory arrangements at all. That, I think, is a logical
position which one can easily defend: the point of having a rather
strict set of conditions which must be fulfilled before Members
enter into a regulatory agreement is that when they enter into a
regulatory agreement they do, in effect, receive a discharge so
far as is necessary from the obligations of Chapter V in respect
of that commodity; so one might easily say that if no discharge
from the obligations of Chapter V is needed in respect of a
non-regulatory arrangement, then why bother to mention them in
the Charter at all?
If one were to pursue that line of thought, it would mean,
first of all, a somewhat radical re-arrangement of the Chapter,
removing a great many Articles from it and making it shorter.
Well, there might be an advantage in that. On the other hand,
it would be necessary to look a great deal more closely at the
Article --that is, Article 52-- which describes the conditions
under which it is permissible to set up a regulatory agreement.
- 11 -
V - 12 - E/PC/T/B/PV/5
I think we might be engaging there on a rather dangerous
project. Article 52 was a hard fought Article in London and it is;
at the moment, fairly nicely balanced, but if we were to look at it
again in the light of an commission of arrangements altogether in
this Chapter, then the new situation might be much more difficult
to deal with. But there are many more fundamental reasons, it
seems to us, why we should preserve arrangements in this Chapter.
It seems to us that arrangements of a non-regulatory character may
be extremely useful, and I will produce an example in a moment.
What we have in this Chapter in respect of arrangements is really a
laid down procedure for arriving at the well-known procedure of
study groups at conferences, and we also have certain basic rules
the
about who is entitled to represent then and what/measures of their
representation should be. That is a valuable thing to have in the
Chapter if we think the arrangement may be valuable. If
governments agree to the document in which this procedure is set
forth, it is more likely to produce arrangements than if we
have no such procedure,and indeed if we were to cut it out after it
has been produced to the world everybody would assume that we
thought there was nothing in the business of arrangements.
Now, Mr. McCarthy said that be was unable to think of a non-
regulatory arrangement. He then proceded to think of one and from
his description of it I detected in it, not in an extremely sinister
form, but at any rate in a recognisable form, most of the worst
features of a producer's regulatory agreement which is not allowed
in the Chapter at all. The valuable non-regulatory arrangement
is one which is directed to expansionist measures - one which does
not involve regulation in the way of limitation of trade at all.
It may be necessary to have agreements on these things because
governments may say: "We do not wish to push these expansionist ER
-13 - E/PC/T/B/PV/5
ideas. We want expansions within previously agreed limits."
There is no regulation of trade involved in that, but there is an
agreed limitation of the degree of action which governments will
take. It seems to us that there might be a great deal in those
arrangements though I have never heard of one yet. It may be that
it is always because the producers think of these things in the
other way. At any rate, we would be disposed to say that, to give
up the basic distinction between arrangements and regulatory
agreements, the right attack on difficulties in connection with this
Chapter is by making quite clear what we mean, and that is the
object of the rearrangement of the Chapter as suggested. S -14 - E/PC/T/B/PV/5
CHAIRMAN: The Delegate of Cuba.
Mr. J.A. GUERRA (Cuba): Mr. Chairman, although I was
present at the New York Meeting and to that extent I am
responsible for having accepted the change in the arrangement
of the Chapter, I think now, looking at the United Kingdom
and Australian suggestions for the change, I do not feel very
guilty for having taken part in the change made at New York,
because, to my mind, the question is a little too much
exaggerated regarding the importance of the change made.
The amendment or the re-arrangement proposed by the
United Kingdom Delegation amounts to dividing the first few
Articles of the Chapter, from 46 to 51, into two parts,
instead of having only one part, as in the New York Draft.
In fact, the addition to Section A, in the sense of separating
the general considerations of inter-governmental commodity
arrangements ingeneral, is only a question of form and I
would be inclined to agree with Mr. H1 ..L :r's rework about
the beauty of the thing. I work net agree with the comment
of the Unied Kingdom paper, that this change involves a
change in substance, because if we agree with the United
Kingdom proposal to separate these Artilcles into two sections.
even in that case the first section and the second section
will, in fact, amount to the sane thing; general considerations
of principle will apply to all kinds of arrangements contemplated
in the Chapter.
As I understand the Australian proposal, it gives me more
ground for thinking that the changes are very important, because,
after all, in the proposed new Article 56A the thing is left
in blank; in fact, we say that 'Members agree that in relation
to non-regulatory agreements action shall be taken in accordance
with the provisions of the Chapter, except the provisions S - 15 - E/PC/T/B/PV/5
contained in Section B above." That amounts in practice to
what we already have in the New York text, in the sense that
we have only two divisions - the general provisions and
considerations of inter-governmental commodity arrangements,
applicable to all kinds of agreements, and then the provisions
applicable to regulatory agreements.
From that point of view, I say this involves, again only a
question of form - of beauty, if I may say so - and I think in
the second case I would prefer to have the two kinds of
principles on provisions stated in the Chapter as it is now
rather than to add a new division that in fact does not amount
to anything but to recognise that the provisions of a general
character will apply in cases in which you are not dealing with
regulatory agreements.
When the Delegate of the United Kingdom was speaking,
I was under the impression that he was experiencing very
special difficulties in finding the kind of agreement or
non-/
arrangement that will not be/regulatory, that will in any
sense involve regulation of trade, prices or production.
I think I agree entirely with Mr. McCarthy's suggestion,
and 'I think that the point which the Australian Delegation
triad to meet by inserting a new Section C may perhaps be an
improvement in form; in fact, it is, because any kind of
agreement, whether we can visualise it or not, will be
covered under the provisions of the Charter regarding the
development of commodity arrangements in general.
Therefore, if the Commission feal that it is an improvement
in form, we would be inclined to retain the text or the arrange-
ment of the London Draft set our in Section A as general
considerations and Section B as commodity arrangements in
general. But before accepting that I want to make a last
point in this connection; that is, that the United Kingdom S E/PC/T/B/PV/5
-16 -
amendment seems to be based mainly on the fact that we are
mentioning commodity arrangements in a rather premature way,
before we speak of inter-governmental action in general, but
when we read the proposed Article 47A we find that we skip the
question of the arrangements in the title of the Article.
But immediately the United Kingdom Delegation goes into what
kind of action or what form that action will take, we come
right up against the two kinds of action - general arrangements
and regulatory. Therefore I think the question involved is
not a question of substance at all, it is only a question of
form, and if we judge the two arrangements we would feel inclined
- if the Commission feels it is necessary to go back to the
form of the previous arrangement - to favour the segregation
of these Articles in the form proposed by the United Kingdom
Delegation, but even from that point of view I think the
insertion of Section C proposed by the Australian Delegation
will not be an improvement, in the sense that it will not add
anything to the Chapter; in practice, it would amount to a
declaration of an empty space there that we want to fill in a very
general way, and I think that general way is already covered in
the present arrangement of the Chapter. 17
CHAlRMAN: The delefate of Canada
Mr. J.J. DEUTSCH (Canada): Mr. Chairman, I am inclined to
agree with the speakers who maintained that some sort of surgery
is desiraole, for two reasons:
Firstly, I think the present text is lacking in clarity,
particularly with respect to the procedures which are to be followed
in the development of the commodity agreement. It is extremely
complex at the moment. It is not very clear eor the ordinary
reader. And in that respect I think that the United Kingdom
amendment would be an improvement.
Secondly, and this is perhaps a more fundamental point, I have
a great deal of sympathy with Mr. McCarthy's main point. I am
very doubtful whether the attempt at distinction which is made
between non-rogulatory agreements and regulatory agreements is
realistic. Ever since the produotion of this Chapter in London
I have tried to think of how the non-regulatory agreements would be
applied and to what kind of situations they would be applied, and
frankly I cannot think of any conditions or situations that would
not fall within the present definition of a regulatory agreement.
Regulatory agreements are defined now as agreements pertaining to
the regulation of production, trade and prices. Now the word
"trade" of course is an extremely wide word and so is the word
"production", and I do not see any situation which does not fall
within that definition. Mr. Helmore gave an example of an agree-
ment to promote the expansion of production. I assume he has in
mind something of the nature to regulate expaosion of production.
That is all it could do. And I cannot see as a practical matter,
even in chat case, where producers would agree to expand in a certain
way, unless it does involve some such regulation, say, that they
agree to go no further than a certain point and, having reached such
E/PC/T/B/PV/5
P. 18
a point, certain things shall happen.
Again, within the field of regulation, I do not see at present in
this wide definition of a non-regulatory agreement where there is any
place whatever for the spealled arrangement. I think it is just so
much verbiage at the moment in the Chapter.
I think we should consider that question of principle. If it
is decided on this question of principle that there is no useful
distinction except an optical one - I agree that there is some kind
of psychological value; perhaps in suggesting there is something
mild first and afterwards you reach something more drastic, there
is a certain psychological value, but beyond that I do not see it
has any val if that principle is decided one way or another,
and if it is decided that it is not useful to retain this distinction,
then there would be a considerable rearrangement required of the
Chapter, I would say a considerable simplification, and it should
be possible to add much more clarity to the whole thing.
In this way we try to maintain an unreal distinction, and, as
long as we do that, we are going to be in trouble from the point
of clarity. We are not trying to distinguish between two real
situations. My own feeling is that the distinction as at present
drawn is not a real one and not a useful one/and if that opinion pre-
vails then I think there is considerable value in the rearrangement
and, as I say, from my own standpoint I do not see that the present
distinction is useful.
E/PC/T/B/PV/5
P. - 19 - E/PC/T/B/PV/5
CHAIRMAN: The delegate of the Netherlands.
DR. E. de VRIES (Netherlands): Mr. Chairman, when we are now
discussing this Chapter, I may say that it is the third reading
after London and New York, we have the benefit of half a year's
experience in this field, and many any oe the governments represented
here had that experience at different places. I may recall,
first of all, the long conference in Washington of the Preparatory
Commission of FAO, and I recall at least six commodities that have
been discussed in the last half year on the basis of this Chapter -
tin, rubber, wheat, rice, sugar and timber. So, we must use all
that experience of the half year here in Geneva in order to achieve
a better Chapter than we had before.
I quite agree with the delegates who have spoken before, that
something can be done to make the Chapter more readable for the
general reader and for governments just coming intto this matter,
because some of the delegates here have been working on this
Chapter for a long time, and I think the first thing they have to
do is to feel how other people read this. I must confess that
many of the amendments brought before us here really have a better
meaning on the whole thing thin we achieved in London and at
Lake Success.
I think that this question of re-arrangement, which we are
now discussing, gives us an opportunity to have a general review of
the whole thing as has been suggested by Mr. McCarthy first and
other speakers after him, and here, in the words "regulatory and
non-regulatory agreements" that were born in London, we see the
power of words. As regulatory agreement, it first, at least in
my mind, implied something like quota or price range or something
like that. By taking the wv ]? affecting production and export
J. J. - 20 - E/PC/T/B/PV/5
and import, the implication of the words then made the field very
much broader than the original thing, where quota and price range
were in force there. Still, I could see a whole field of inter-
governmental action and co-operation still within the rather narrow
bounds left for a non-regulatory agreement. That is what is
now popularly called a permanent Study Group. They involve study
and regular consultation, and they prepare for some future action
on regulation, but do not evolve regulation itself.
This permanent Study Group is a very valuable thing, as has
been proved in the last year for more than one commodity, so I
think this, at least, is involved in non-regulatory agreements.
Now, there are some other types which do not explicitly give
a quota or a price range, but which, in the wording when
you come to it, probably, without prejudice, are regulatory. Some
of them we have been reminded of here already by other speakers.
One of them is an arrangement providing for expansion - either
expansion that in future may be regulated itself, but which, in
the first place, is just expansion of production. G. - 21 - E/PC/T/B/PV/5
This type I think we all agree, as Mr. Helmore said, is one
which we ought to deal with among general arrangements. We cannot
say that they are in a period of burdensome surplus or anything
like that. On the contrary, they are more at a time of burdensome
shortage. But then you get the type that I should like to call the
"sleeping regulation" - that means making an arrangment which
involves regulation on specific terms. That may be one, again,
where a surplus is forthcoming. The type of that which has been
working very well was the wheat agreement during the war. They
said that regulation would be followed by the operation of that wheat
arrangement, under specific conditions of surplus when that would
come vain after the war. At that time it was not yet. But there
was a condition that under certain conditions we will give a
regulation.
I think it would be a good thing to make it clear that in
that stage it is not yet regulatory, and that you can do that
easily, because it is a good thing to have in mind difficulties
which are not yet at the moment . We do not expect them, but they
may come about, and if they do not come about we have no regulation.
Then we have the conservation agreements which have been
mentioned. by the U.S. Delegation. That is a thing I am wondering
a little about. Mr. McCarthy said such conservation arrangements
do not regulate. The U.S. Delegation said such conservation
agreements must regulate. May be they do not regulate in this sense
of limitation of production, but they may regulate in the sense of
limitation of consumption.
Well, I leave that to the United States Delegation and the
Australian Delegation as to under what type of arrangement or
agreement they fall; but I think it is a very good thing, Mr.
Chairman, that we have a general review of these and try to make
it clear in this Commission which types of arrangements there
are and which we can conceive, and where we will place them. V - 22 -
CHAIRMAN: Any other speaker? The Delegate of New Zealand.
Mr. G.D.L. WHITE (New Zealand ): Mr. Chairman, we have not
any very strong views on the arrangement of this Chapter. We
have examined both the United Kingdom and the Australian re-drafts
and we find that each of them has considerable merits, and I
therefore think would be very appropriately sent along to a
sub-Committee to produce a new and better draft. But one question
which is not quite clear is whether the Australian new draft of
Article 51A, which makes a definition of regulatory and
non-regulatory agreements, is merely a change in the arrangement
of the Chapter, or whether it is a change of substance. I refer,
of course, to those words "to a substantial degree". I think
that that is a change of substance, and it is one with which we
find ourselves in complete agreement; but I do not think that is
the sort of thing which can be referred to a sub-Committee without
an exchange of views in this Comission on that particular point.
For our part, we found considerable difficulty--as other Delegates
seem to have done also--in finding out exactly what is a
non-regulatory agreement, and we are prepared to support the new
type of definition which is suggested in that Australian text of
Article 51A.
CHAIRMAN: The Delegate of the United States.
Mr . R.B. SCHWENGER (United States): Mr. Chairman, I would
just like to make two points which express the view of my
Delegation on the matter before us. In the first place,
we have found, as others have, some difficulty with the present
text in making clear at a first reading the exact plan of
regulatory and non-regulatory agreements and arrangements
respectively, and we think it would be quite useful to attempt
E/PC/T/B/PV/5 V. - 23 - E/PC/T/B/PV/5
an improvement in the Chapter which would at least partly
remove that difficulty, and we feel that the two suggestions
for such redrafting contain a promising method of doing that.
The second point, however, is that we do not share the
same degree of doubt that has been expressed by other Delegations
as to the soundness or the essential substance that was incorp-
orated in the London and the New York Drafts. We feel that
in spite of all the difficulties of explanation, the child
is essentially a sound and healthy infant, and it is merely
a matter of getting the rest of the world to see that this is
so, as it develops in use. But we would not wish to put that
forward as a dogmatic position. Doubtless there are cases
that must be considered which are marginal, and we would like
to see an effort made to clarify the distinction in that respect
also, if it is necessary. We doubt very much that the words
suggested for that purpose in the amendments before us succeed
in doing so. We fear that they go a little too far towards
breaking down the distinction, which, as I say, we feel is a
basically useful one, and a sound one in the light of the rest
of the Chapter. We would like to see that discussed in con-
nection with the problem of re-arrangement, and I think probably
we ought to say that we will do that without,of course, prejudice
in any way to the right of the Members of the Conference to enjoy
the excellent American apples that are on the Geneva markets at
this season of the year.
CHAIRMAN: Do any other Members of the Commission wish to
speak on this subject? The Delegate of South Africa.
Mr. S.J. de SWARDT (South Africa): Mr. Chairman, I have
been listening very closely to find a good argument why there
should be this differentiation between an agreement and an arrange-
ment and a non-regulatory agreement and a regulatory one. Now, - 24 - E/PC/T/B/PV/5
there seems to be quite a bit of support for the idea that there
should be a difference, but I have not heard a good argument
as to why there should be a differentiation, and when this matter
goes to the Committee on the present basis, it seems to me that
the Commitee will have to tackle it from that point of view --
that there should be a differentiation.
For my part, I can only see a difference in degree between
the various kinds of arrangements or agreements and not really
one of substance. This difficulty has been expressed by other
Delegates, but in spite of that we have not had much argument
to really show that it is of such importance as to be necessary
to deal with it under quite separate headings, and the way I
see it, it would not be justified to deal with the matter under
separate headings. The difference is only one of degree.
You have a study group to study a real problem , and some-
thing will be done only if there is a real problem about some-
thing which is to be done. I cannot see any arrangement or
agreement being entered into unless there are going to be
obligations undertaken by more than one side, I by producers
on the one hand and consumers or distributors on the other hand;
and where we already have a burdensome surplus everybody is
agreed we should have a regulatory agreement, so it is really
only where there is a shortage that one could visualise something
which is now termed an "arrangement". But I cannot conceive a
condition where producers or producing countries would enter into
an arrangement where there is not some stipulation that if
something is going to happen at some time--if you pass beyond a
certain point--that some obligation is going to evolve on the other
side. That is why the more I hear about it, the clearer it seem
to me that it would just be something on paper. I feel we should
be clear as to whether there is really good reason for making all
this differentiation.
V. CHAIRMAN: We have now had eight speakers on this subject and
there appears to be a general agreement that the Sub-Committee
should study the question of the rearrangement of the Chapter, with
a view to improving the appearance of the Chapter and making it more
intelligible to the reader who is not taking part it these discussions.
There is, however, still a difference of opinion as to the degree of
distinction which should be drawn between non-regulatory and
regulatory agreements. I think it would be useful for the guidance
of the Sub-Committee if there should be some further discussion on
this particular subject, and therefore. I would like to suggest that
speakers now confine themselves to this main point.
Mr. McCARTHY (Australia): Mr. Chairman, I definitely agree
with your definition of the issue, and as far as the rearrangement is
concerned we are quite content to leave it in the hands of the Sub-
Committee. On this matter of distinction, it does seem to me that
the discussion has confirmed the view that there is a problem in it.
I think that the first difficulty is to picture what are non-
regulatory agreements, those which are not put in the category of
regulatory. I have thought of the example that Mr. Helmore gave us,
but the point is that any agreement that comes under this Chapter
involves some decision by a government, and the government will only
enforce its decision by some form of law. And I believe that once
you talk about anything in the way of expansion of production it
necessarily follows that a government must take power to do something
which would bring it with in the category of regulation of production.
I do not think there is any doubt about prices. The regulation of
prices is an advanced form of intergovernmental regulation. I do
not think there is much doubt about quantities, because when you
start to decide how much you are going to ship on the one hand and
E/PC/T/B/PV/5
- 25 - when you are going to ship it, and on the other hand what you are
going to receive and when you are going to receive it, you are
involved in the same form of regulation of trade. But so much can
be done in the way of minor regulation. I will give you an example
which this time, I hope, will not indicate any secret thoughts as
to what might happen, but to take probably one of the most sensitive
markets - having in mind commodity - the United Kingdom market for
butter. Now an advanced degree of regulation of that market would
be an agreement which would include some of the north-western
European countries and the countries which ship butter to the United
Kingdom market. Now, if it were decided that the quantities that
are to be sent to England were 400,000 tons a year, plus what the
United Kingdom produced itself, and that was to be divided up
amongst the shippers, that would be a regulatory agreement in an
acute form.- I use the word "acute". If, in addition, it was
arranged among the countries participating in this agreement that
there should be a maximum or a minimum price, that again would be an
advanced form of regulation. But if the United Kingdom, after
conferring with others, said: "You people are pushing all your
butter in here in February and March; you are upsetting the traders;
you are depressing prices somewhat, that is the time when we find" -
I am not thinking of the particular months - "we cannot get enough
butter from your we cannot get enough in May and June; could you
spread it out a little? Have a talk to the shipping, companies and
see whether you cannot reduce the quantities in January, February
and March and increase them a little in May and June, " if the
United Kingdom said to the Northern Hemisphere countries - Denmark
and Holland and the Baltic States - "Give us your butter spread out
a little more. You will get better prices if you do; we will take
all you can give us, but just spread it out; that is all we want
you to do."
- 26 - E/PC/T/B/PV/5 S - 27 - E/PC/T/B/PV/5
Each of the countries who agreed to do that would have to
introduce regulations, but it would be a very trifling form of
regulation because all it would say is: "You have to issue some
sort of a licence, but we will delay your January butter until
February, your February butter until March, and so on", and it
would be to the benefit of both shippers and the importing
country, countries such as Belgium - and later on Germany -
would no doubt come into it, because it would suit them to do it.
We could give other examples, but it seems to me there are
three categories: one is where the degree of regulation places
the issue beyond doubt, others are minor forms of regulation.
Then there is the third category, which we do not seem able to
got our hands on and which could range from what might be called
the mildest form of inter-governmental regulation, such as an
exchange of information or an undertaking to engage in scienti-
fic research on certain lines on a certain product, and perhaps
to interchange exports, or something of that character. We do
not see how you can link that up with the objectives of the
Chapter we are talking about; difficulties are likely to arise.
The problem is that where you try to reconcile the objectives and
the conditions under which any sort of agreement might be intro-
duced you find yourself wondering what sort of agreement there
could be which would meet the objectives which would not be
regulatory in some form. That, I suggest, is the problem and that
is the issue.
We are not in doubt at all about the really cIear regulatory
agreements, such agreements as we know - the wheat ard sugar
agreements and those where there is undoubted regulation of
trade, production, and so o.- But if we try to apply all the
criteria to some of the milder forms of regulation, will we
not mean nothing will be done, because we are not ready to engage S - 28 - E/PC/T/B/PV/5
in the closer forms of regulation pictured in the Charter. That
butter example might be the forerunner to much closer agreement
later on, say, in seven or eight years' time. It might be a
good thing if there were an agreement involving price, where you
have a ceiling or a floor and where you would not have the dis-
equilibrium that we talk of in our opening chapters.
Even those who are firm believers in this form of
regulation know that in order to get the form of regulation you
ultimately want you must do it in steps. Even though you do
not see it now, your judgment might tell you that you will not
get it until people are educated; perhaps nine or ten years'
time might be a reasonable objective for some of the agreements.
My own view before the war was that it would take three steps
to get a wheat agreement which would remove the difficulties
that were so obvious to everybody who had anything to do with
wheat. The war altered things quite a lot. The agreement which
was drafted recently was something I has never contemplated
happening for a very long time. So you might find yourself in
the position that, because opinion is net ready for a full regu-
latory agreement, you cannot do anything at all, because it must
be either regulatory or nothing and the fact that it is nothing
is because there is a small form of regulation in it which
precludes you from going on.
I suggest that the discussion resolves itself into this:
Can the non-regulatory agreements be divided into two categories,
those which have a very minor form of regulation and those which
can definitely be described within the Charter, as it stands at
present, as non-regulatory?
If you can get those two distinctions, can we get some idea
of what a non-regulatory agreement would be? I think that, in
searching round for a non-regulatory agreement, you would get one S E/PC/T/B/PV/5
- 29 -
which could be reconciled with your view of the agreements as
set out in the first few Articles.
One final point; the question of the difficulty that
enters into the number of participants in an agreement. It will
be found, I think, in practice, that frequently an agreement is
a small one because there are very few engaged in it and it would
appeal to those who are interested in getting a full agreement.
The view that would appeal to them would be to let a few start
off and others will join in as time goes on and the fruits of
the agreement are seen. That happened, I think, in the case of
sugar. The first agreement was limited to a few; there were
quite important sugar consumers and producers left out of it,
but the fact that such an agreement could be established and
maintained became apparent to the others and they came in.
You might have two, or three, or four steps, but can you
lay down that there should be a full regulatory agreement if
there are a limited number of people in it?
Finally, I would like to say that I can see all these little
narrow agreements going into the regulatory agreements if it is
decided that is the best course to follow, and the only reason why
I can see they should not all go in is that I think the criteria
we have laid down will prevent, in some cases, the birth of the
agreements and perhaps prevent the early growing stages which
could be undertaken if the conditions were not too onerous.
The conditions surrounding a full agreement such as we con-
template on wheat, sugar, etc., are onerous, because the degree
of regulation is great and when countries come into it they have
got a record to look at as to the work of such a Council, but
that is not so where we are starting from the beginning, and I
suggest that is an important point.
If it is decided: "Why not put all these agreements - even
if they have got only a small degree of regulation - into the
regulatory category ?", will that not stop something being done
that would otherwise be done? - 30 -V/5
CHAIRMAN: The Delegate of the United Kingdom.
Mr. HELMORE (United Kingdom): Mr. Chairman, I think the
point in front of us has become very much clearer as a result of
the further discussion, and particularly as the result of the
second speech by the Delegate of Australia.
There are, however, two ways of looking at this problem.
One, which I think is favoured by the Delegate of Canada, is
by removing the unnecessary Chapter and finishing it like that.
Well, that is rather like the old story of the man who had a
fish stwre and was apout to paint a sign in front of it which
was to read "Fresh Fish Sold Here". A friend came along and
said, "You are really wasting your time painting that. Nobody
supposes you are going to give it away, so you can leave out
the word 'sell'; " then he had a further bright idea and said,
"Nobody supposes this is going to happen anywhere else - so you
may as well leave out the word 'here'". Then he had yet a
further bright idea. "Nobody supposes you are going to sell
old fish, so you may as well leave out the word "fresh"; and
as for the remaining word, "fish' -anybody within a hundred yards
of your shop will know what you sell, so you may just as well
leave that off too."
It seems to me, before we embark on that line of talk, we
want to think very carefully. Even though we cannot think here of
an example that convinces everybody of a non-regulatory arrangement
that ought to be mentioned, that does not mean that such a one
will n t arise in the future. As has been said, the Draft Wheat
agreement was really a completely new technique, and there may
well be other new techniques discovered, all based on an ingenuity
or wisdom which are beyond us at the moment.
The other line of argument, it seems to me, is to look at the
E/PC/T/B/PV/5
G. G. E/PC/T/B/PV/5
-31 -
way in which this Chapter fits in with the whole scheme of the
Draft Charter. And the key Article, many people find - certainly
those who went through the discussions in London - is Article 52,
the famous introductory words of which are, "Regulatory agreements
may be employed only when" and so on. Now, as it has been said,
this Chapter is designed to describe the circumstances in which
a departure from the provisions of Chapter V is justified. The
provisions of Chapter V from which it is necessary to depart are
those involving regulation. That argument would seem to us to
mean that there is no need to have anything which does not
involve a departure from the provisions of Chapter V - which is
the distinction between arrangement and regulatory agreement.
None the less, we have all sa id the departures from
Chapter V are justified both in respect of arrangements and in
respect of agreements. And the problem that is really worrying us
is, what departure from Chapter V can you possibly want if it
does not involve regulation?
Therefore, leave out of the Chapter all those things that
do not involve regulation; in other words, those that only involve
non-regulatory arrangements. I think that is the real basis of
the argument.
Now, at his second attempt the Delegate of Australia produced
an example which frightened me a good deal less. Though even then
I felt a bit worried that we in the United Kingdom would mind
"pushing in" - we would like it very much for a little while;
and it seems to me that if we are going to face this problem we
have got either to re-consider Article 52, which lays down the
circumstances within which a regulatory agreement may be used,
or what is to be considered as a definition of regulatory.
Those are the two things which we must do, if we are going
to preserve the "Arrangements" part of the Chapter. G. - 32 - E/PC/T/B/PV/5
I would be very much against any attempt to make any
substantial alteration in Article 52 as it now stands. That does
involve opening the field to regulatory agreements; in other
words, to a departure from Chapter V in circumstances that seem
to us not serious enough to justify that. On the other hand, if
you say regulatory agreements are those affecting the regulation
of trade production and prices, whatsoever the exact words are,
you have thrown a net when the limited conditions of Article 52 apply
which may be very weighted indeed. Therefore, I would say
that the clue to solving this problem is to re-consider the
definition of a regulatory agreement - not to disturb what we have
already mostly agreed upon as to the conditions in which a
regulatory agreement may be used, but to consider whether we have
not gone a little too far in saying what is a regulatory agreement.
Undoubtedly, in Mr. McCarthy's example, the countries who
were involved there would have to use some form of regulation to
do it. It would almost certainly involve a form of limitation
of exports at the times of the year that were appropriate; but
as I understand it, it would not involve a reduction in the amount
exported. So it may be that there is a clue there which we can
follow, and by looking at the definition of the word "regulatory",
discover the right answer to the intellectual problem that is
bothering us about why there should be the two parts of this
Chapter.
I think it ought to be added that just to say "two parts" may
conceal a misunderstanding. What is said is that for arrangements,
"certain conditions apply", and for regulatory agreements certain
other conditions apply as well. That is rather different from
some of the implications of saying that the Chapter is in two parts;
and if it were the view of the Commission that the right solution
was the definition of "regulatory", I gladly agree that should be
done. I think the attempt at doing that in the actual amendment
suggested by Australia goes rather far. V. - 33 - E/PC/T/B/PV/5
It seems to me to be open to a good deal of argument in
interpretation, in the use of the word "substantial" without
any provision for some independent determination of what is
substantial in relation to the circumstances.
Mr. E. McCARTHY (Australia): The Organization ought
to be given some criteria .
Mr.J.R.C. HELMORE (Unied Kingdom): If one could
arrange it so that -- as has just been suggested -- the Organ-
ization had some small, limited discretion in this matter,
we should be very happy to view that sympathetically. - 34 - E/PC/T/B/PV/5
Mr. J.J. DEUTSCH (Canada): Mr. Chairman, after Mr. Helmore's
fish story I feel I would like to say a word. I do think that it is
misleading to put out a sign of fish for sale when you haven't got
any fish to sell, and that seems to me to be the situation in this
Chapter. However, Mr. Helmore went on to analyse the problem in
a way with which I agreed. He has pointed out earlier that the
difficulty was in the present definition of the regulatory agreement,
and that was the only one. There was nothing left for any other
type of agreement, therefore, why make the Chapter more difficult by
adding a lot of material to cover the situation as it arises? I
agree that, if it is possible to narrow somewhat the definition of
regulatory agreement and thereby make it possible to have agreements
which fall outside that definition and have agreements that do not
that would be useful. I think
have to meet all the conditions of the regulatory agreement,/ it
would be desirable to try and see whether we can get a somewhat
less wide definition of the regulatory agreement,
to cover the situations that Mr. McCarthy has referred to. If
that is done I think the possibility of maintaining a duality here
is useful and desirable. I do recall that there was a very
difficult time in London to get an agreement on the definition of
the regulatory agreement, but I think it is worth trying once more
to see whether we can get a definition that is more satisfactory
and which allows for a wider range of activities in the commodity
field. In that case there would be room for the development of
less rigorous conditions for the other types of agreements. But
you can't have them both. You can have both the complete definition
of regulatory agreement covering all the possible situations and still
maintain a section of the Charter which is designed to take care of
conditions which may never arise.
M. PETER (France) (Interpretation): Like the United Kingdom
delegate, I am of the opinion that in order to see the position in
a clearer way, it is necessary to refer to the purposes of
Chapter VII within the general framework of the Charter. 35
The purpose of Chapter VII is to determine those conditions that
are to be fulfilled by countries which desire to conclude regu-
latory agreements regarding trade . This, therefore, excludes
inter-governmental arrangements, as was mentioned by the Delegate
of Australia, for instance, on research work; this kind of
arrangement does not come within the framework of the Charter
and the conditions set forth in Chapter VII are not applicable
to them.
The great difficulty is that this Chapter hampers the freedom
of initiative and therefore it appears necessary, in our opinion,
to limit the conditions under which regulatory agreements can be
concluded. The difficulty, as pointed out both by the United
Kingdom and the Canadian Delegates, is the difficulty of defining
the matter; it is indeed necessary to determine the general
regulatory agreements which should be subjected to severe conditions
and the more limited particular agreements for which more
flexible rules should be contemplated.
I do not think it is possible to subject to severe rules
all inter-governmental arrangements and I therefore adhere to the
spirit of the United Kingdom and Australian amendments, which
draw a distinction between general regulatory agreements and other
agreements or arrangements which are of lesser scope and largely
more flexible. The latter should therefore form part of an
altogether different category, where the regulations to be
applied would be less severe than in the former category.
For these reasons I think it should be the task of the
sub-committee to draw a careful distinction in order to allow
a certain amount of freedom in the drawing up of inter-governmental
arrangements which should not be subjected to strict rules.
E/PC/T/B/PV/5
S S 36 E/PC/T/B/PV/5
The Canadian Delegate made a reference to minor agreements.
The French Delegation agrees with that distinction and is of the
opinion that all inter-governmental arrangements should not be
subjected to the same restrictions. In other words, in certain
cases the regulations should be more severe, whilst in other
cases they should be more flexible.
CHAIRMAN: The Delegate of Cuba.
Mr J.A.GUERRA. (Cuba): Mr. Chairman, we think the issue
before the Commission is clearer now than when we started in
London to try to solve this difficult problem of differentiating
between the two forms of agreement. Thanks to the Canadian
Delegate, who raised the problem, and to the Australian Delegate,
who, in my opinion, gave the answer, we have achieved that
purpose.
I myself had not been able to see any fish behind the sign,
either, up to now. The problem was that the Delegations who,
in London and here, referred to these other types of agreement
always tried to describe them in terms of objectives -
especially expansion of production - but not in terms of
mechanism. Thanks to the second speech of the Australian
Delegate,I remove my doubts about it and I now see clearly
that there are no fish at all.
The question is simply this: that we have two kinds of
regulatory agreement - one which involves a greater degree of
regulation and another kind which involves a lesser degree,
and the problem before the Commission is therefore to decide
whether it is desirable to take that into account and try to fit
Chapter VII into the framework of the Charter, making the
minor regulatory agreements more flexible and making the
restrictive ones regulatory. 37
I think when the Commission decides that, it will entail
not only the re-arrangement of the Chapter but also a full amount
of changes in the type of difficulties referred to in Article 47
and also in the conditions and the requirements on which those
types of arrangements can be established.
I only sent to add that it seems to me I cannot commit my
Delegation to any view as to whether those changes and that new
approach are desirable or not, because we always approached this
Chapter VII as an exception to the obligations in the general
framework of the Charter, as the United Kingdom Delegate pointed
out, and we shall have to look at the question from a new view-
point and explain our decision at a later stage.
CHAIRMAN: Are there any other speakers?
The Delegate of Czechoslovakia.
H.E. Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman,
I would just like to observe that from the discussion on the
re-arrangement of the chapter we became involved in a dis-
cussion on fish, I would like to go over to another animal.
When a friend of mine was once asked to define an elephant, he
said: "Well, I cannot define an elephant but if I meet one I
shall recognise him."
E/PC/T/B/PV/5
S J. E/PC/T/B/PV/5
38
H.E. Z. AUGENTHALER (Czechoslovakia): Now, I think that
may be it would be advisable just to take the different amendments
to the Articles and to see what are the foundations and what is the
matter of the Articles, so that afterwards we may decide about the
re-arrangement, or see if there are some important differences
and some now definitions necessary. I thank you, Mr. Chairman.
CHAIRMAN: I think the remarks of the Czechoslovakian
delegate are very pertinent to this discussion. I suggest that
we should, first of all, have a general discussion on the proposal
to re-arrange the Chapter, particularly in relation to distinctions
between non-regulatory and regulatory agreements.
I think we have had a very useful discussion, and though we have
not completely shown the sub-committee how to solve the problem.
we have at least indicated to them what the problem is.
Now, we will be returning to various aspects of this problem
as we consider the various Articles of the Charter and the
amendments which have been submitted to these Articles. I think
the delegate of Czechoslovakia is quite right, and that after we
have proceeded with the various amendments, there will be some more
guidance given to the sub-committee as to how to deal with this
problem.
I would therefore like to propose that we leave this subject
now and transfer it to the sub-committee for further study. Is
that proposal approved?
Agreed.
The next item on our Agenda is an observation by the French
delegation regarding the Functions of Specialized Agencies in
relation to Commodity Arrangements.
I would like to suggest, if the French delegate agrees, that J. E/PC/T/B/PV/ 5
39
we defer consideration of this particular subject until we come
to the consideration of Article 50, which deals with relations
with inter-governmental organizations. Is that agreed?
M. PETER (France) (Interpretation): Mr. Chairman, this was
not an amendment, but only a wish that we were making and I agree
that we defer this until we come to the discussion on Article 50.
CHAIRMAN: Thank you.
The next item is reservations to the whole Chapter by the
delegation of Brazil. It will be found in the Report of the
Drafting Committee on page 38 that the Brazilian delegation has
reserved its position on the whole Chapter insofar as its
operation might interfere with the production of primary
commodities for home consumption.
The delegate of Brazil. E/PC/T/B/PV/5
G.
40
Mr. MARTINS (Brazil) (Interpretation): Mr. Chairman, the
Brazilian Delegation reserves its position on the whole Chapter
for reasons that are stated in their Report. It should be borne
in mind that these provisions were that the Chapter concerned
should be in conformity with Article 1 (1) (b). The whole of
Chapter VII is likely to create a system of arrangements or agree-
ments of an international character which it is desirable to
make the best possible, on the assumption of equal development of
all countries, in order to offset the effects of a lack of balance
as between consumption and production of commodities; but finally
if this were applied, the world situation would be stabilised
to the point of reaching a sort of division of work.
However, there are a number of insufficiently developed
countries which are nevertheless in a position to contribute to
the general situation, both in favour of their own people and in
favour of the people of other countries; and this effort on their
part should not be rendered difficult by means of agreements or
arrangements the effect of which would be to prevent such countries
from increasing their production.
This explains the Brazilian reservation. What we want is to
introduce in this Chapter the dynamic viewpoint of nations now
in the course of development, and we intend to submit an
Amendment to Article 59 which we hope would be likely to improve
the general provisions of the Chapter.
CHAIRMAN: Any Member of the Commission wish to speak on
the reservation of the Brazilian Delegation?
The Delegate of Cuba.
Mr. GUERRA (Cuba): I would like to have some clarification
from the Brazilian Delegate about the difficulty they had with
the Chapter. We had a certain discussion on this point in New York G. 41 E/PC/T/B/PV/5
and up to now I cannot understand what the reason for the
reservation is, because these agreements are voluntary, so that the
country is free to join the agreement or not; and to that
extent of the regulation of production or trade or prices, in
the case of regulatory agreements, they are free not to enter.
If a country has a programme for increasing production for
domestic consumption, just by joining the agreement does not put
it under any obligation under the Chapter. It would have no
interference from other countries, so I would like to have some
clarification of this point, because, up to now, I have failed.
to see or understand the reason for the reservation on the
Chapter.
Mr. MARTINS (Brazil) (Interpretation): Mr. Chairman, I have
already stated that we intend to submit an Amendment to Article 59
explaining our point of view and explaining the reasons for the
reservation which we made in New York; but in order to reply to
the question asked by the Cuban Delegate, I shall only state now
that in practice there is no choice. There are two categories
of countries; on the one hand those which are parties to
agreements, and on the other hand those who are left outside
the agreements and therefore have not the same opportunities of
development and expansion as those which are parties to the
agreements.
Therefore we are faced in this world with a situation in which
the existence of such agreements would oblige countries that are
not willing to have such agreements to enter them if they want to
take part in the general development. But I repeat that this matter
can be better discussed when we come to Article 59, and I shall
ask the Cuban Delegate to wait until we get there for further
explanations. 42
G E/PC/T/B/PV/5
Mr. GUERRA (Cuba): Allright, I am willing to wait for that
opportunity.
CHAIRMAN: The Delegate of the United States.
Mr. SCHWENGER (United States): Article 59 deals with
exceptions to the Chapter, and I too would be willing to wait,
but I would like to urge our Brazilian colleague to submit his
Amendment at as early a date as possible, so that as we go through
the other portions of the Chapter we can have in mind the kind of
exception he intends to add to the Exception Article, and it
should help us to consider it fully throughout our sessions. V E/PC/T/B/PV/5
43
M. L.D. MARTINS (Brazil): (lnterpretatoon): Mr. Chairman,
I ask that I may wait until tonight at seven o'clock, because I
have promised the Secretariat to submit an amendment to them by
ed the Secretariat to submit an amendment to them by
that time.
Mr. R.B. SCHWENGER (United States): Yet that is what I
had in mind really.
CHAIRMAN: I was going to point out to the Brazilian Delegate
that we fixed the time limit of May for submission of
amendment , but if his amendment could be in the hands of the
Secretariat as soon as possible and circulated, that would enable
us to take up his amendment when we come to Article 59; otherwise,
it would have to be referred directly to the sub-Committee, and
we would not have the benefit of discussion of the amendment in
the full Commission. I am very hopeful that when the amendment
is discussed in relation to Article 59, the Brazilian Delegation
will then be able to withdraw his reservation, because we <. wish
to have the Chapter go forward without any reservations of any kind.
M.L.D. MARTINS (Brazil) (Interpretation): This is precisely
our position, Mr. Chairman: we are prepared to withdraw our
reservation the moment our amendment is adopted by the Committee.
CHAIRMAN: We shall return to the Brazil reservation after we
have discussed Article 59.
Point 4 on our Agenda relates to matters is Chapter V arising
out of consideration of chapter VII. "The Drafting Committee- Go~r-i te
pointe'd out that when Article 59 is ,dealt with the provisions of
VIChapwhich would allowYto -a .i. r, p rtcipate incommodity
arrangements will need to be taken into Consideration" The
attention of Commission A is being drawn to this matter by the 44.
Secretariat and there is no need for us to take ary further
action at this time.
The United Kingdom Delegation, has subrmitted an amendment
to Article 37 ("General Exceptions"). This Article, too,
is to be considered in Commission A, but it would seio desirable
that this Commission should give some guidance to Commission A
when they come to consider the United Kingdom amendment. I
therefore suggest that we ciscuss the United Kingdom amendment
at this stage.
The Indian Delegation also proposes the same insertion as
the United Kingdom, but with the adoition of cortain words
The Indian Delegation, however, has now withdrawn this amondment,
so it will not be necessary for us to consider the Indian amendment
at this time. Ww will simply consider the Indian amendment along
with the United Kingdom amendment .
The Delegate of the United Kingdom.
Mr. J.R.C. HELMORE (United Kingdom). Mr. Chairman, if I
might very briefly explain. to the Commission the thought that we
had in.mind, it is this: There is at present an exception in
0hutptcv V which relates to action taken under Chapter VII, but
that sub-paragraph finds itself in Article 25 which doals with
quantitative regulations, that is to say, the implication is
that the only exceptions to Chapter V which woulu be necessitated
by the provisions of any possible commodity arrangement. would
be the use of quotas. We venture to toubt that and think that
it would be wrong for the Charter to express the thought that
tne only way of dealing with the commodity problem in by a
quota scheme. It might arise in many other ways.
There is also the point that one can easily think of
exceptions which might be needed under other Articles. I
might mention one, and that is Article 31 which is headed
"Non-discriminatory administration of state-trading enterprises".
E/PC/T/B/PV/5
V. 45
Clearly, if the State were a party to a commodity arrangement
and it were also a trader in that commodity, it would be bound
to give precedence in its state-trading operations to the
provisions of the commodity arrangement into which had
entered, and not so much to the considerations to which its
attention is directed by Paragraph 1 of Article 31.
We think, therefore, that it is a good deal tidier and much
more in accordance with the thoughts that have been expressed --
indeed, here this afternoon -- in the debate of the question
with which we started -- to put the exception into the generall
Exceptions Article, Article 37. There would, of course, be
the consequential amendment of leaving out a sub-paragraph in
Article 25 to which I referred.
E/PC/T/B/PV/5
V. ER
E/PC/T/B/PV/5
46
Mr. J.A. GUERRA (Cuba): Mr. Chairman , I suggest that the
proper time to discuss the amendment of the United Kingdom delegation
would be after we havy found out the result of the discussion today,
and after what would finally come out after this differentiation
and to what extent the conditions and requirements for different.
types of agreements are stated, because I think that after w e do
that we will be able to see more clearly the need fom the change in the
first place, and also the effects of the change. --
CHAIRMAN: Will the delegate for the United Kingdom answer the
proposition made by the delegate for Cuba?
Mr. J.R.C. HELMORE (United Kingdom): I do not think it really
matters very much whether we deal with it now or later. I am
pretty confident that it is more convenient to express the
exception to Chapter V as a general exception to Chapter V rather
than direct our brains thinking which of the provisions in this
Chapter might need to have an exception added to them. But if the
delegation of Cuba would sooner discuss the Chapter first and make
up their minds finally as to what exception is needed, I do not
think it really matters.
Mr.. J.A. GUERRA (Cuba): Mr. Chairman; I want to make it
clear that I have no particular objection to the principle of the
change proposed by the United Kingdom delegate. The only thing is
that I think we will be in a better position to Judge to what extent
the change is justifiable and as to whether the acception of the
whole Chapter will be justified after we know what the Chapter will
be like. I think that, in the question of procedure and method,
the Commission will be in a clearer position to judge the necessity E/PC/T/B/PV/5
47
for that and the effect of the change, after we know how the
Chapter will finally be drawn.
CHAIRMAN: I do not think it is really a matter of great
importance when we take up this amendment. The only point is,
should we consider it before Commission A will begin to consider
Article 37, and therefore I think we can agree to the proposal of
the Cuban delegate, and defer the consideration of it till after
we have gone through the other Articles of the Chapter. But if
we find it is coming up before Commission A before we expect, we
may have to bring it up earlier.
We have now come to the consideration of the general comments
on the procedure to Chapter VII. I propose we adjourn now and
at our next meeting we shall consider the amendments to the Articles
of the Charter, commencing with the amendment to Article 46. If
that is agreed, the next meeting will be held on Monday, at 2.30 p.m.
The meeting rose at 6.10 p.m. |
GATT Library | sz663fc3448 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Fifth Meeting of the Tariff Agreement Committee held on Wednesday, 27 August 1947, at 2. 30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, August 27, 1947 | United Nations. Economic and Social Council | 27/08/1947 | official documents | E/PC/T/TAC/PV/5 and E/PC/T/TAC/PV/4-6 | https://exhibits.stanford.edu/gatt/catalog/sz663fc3448 | sz663fc3448_90260012.xml | GATT_155 | 15,245 | 91,670 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/TAC/PV/5
27 August 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
FIFTH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON WEDNESDAY, 27 AUGUST 1947, AT 2. 30 P.M.
IN THE PALAIS DES NATIONS, GENEVA.
Hon. L. D. WlLGRESS (Chairman) (Canada).
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247).
Delegates are reminded that the texts of interpretations, which
do not pretend to be authentic translations, are reproduced for
general guidance only; corrigenda to the texts of interpretations
cannot, therefore, be accepted. E/PC/T/TAC/PV/5 ER
CHAIRMAN: The meeting is called to order.
We are all together to-day to do more discussion on the Report.:
of the Tariff Negotiations Working Party, and the General Agreement
on Tariffs and Trade. The majority of Members have come back
fresh and rested from Czechoslovakia, and we must proceed with the
expedition of the work that is before us because members of the
Committee will recall that the Secretariat has sent other notes to
delegations informing them that "due to the requirements of the
General Assembly of the United Nations all the interpreters in
Geneva will be withdrawn by September 14th." That we may regard
as our deadline for completing the work of this Tariff Agreement
Committee. Therefore I would like this Committee to try to com-
plete their work for the 14th September.
We will resume our discussion based on the Working Paper W.301
prepared by the Secretariat. At our last meeting we finished point
'a) of No.2: Significance of signature of the Agreement at Geneva.
We have not yet dealt with point (b) "The Syro-LW'nese delegation
has pointed out its understanding that signature of the Agreement
will not constitute an obstacle to the freedom of discussion of the
Charter at the World Conference on these part of the two countries
which it represents." The Secretariat then pointed out that it will
be useful for the Committee to reach an understanding, in this con-
nection. I therefore suggest that the first part of our meeting
be devoted to this particular subject, after which we shall
pass on to No.3 - Tentative Timetable of developments.
Would the Lebanese delegate like to open the discussion on this
subject?
M.MOUSSA M0B R K (Lebanon) (Interpretation): Mr. Chairman,
I have nothing to add to the reservation which I have already stated
in the document that I handed to the Secretariat. As you know,
2 -3-
both our Governments said that they could not sign the Agreement
unless certain formal reservations were made, and Syria joined
Lebanon only on the question of Tariff negotiation. On the other
hand, both our countries are linked with the Arab League on the
question of economic development, and it will be very difficult for
us to take any undertaking here towards a text which could be
modified later on in Havana. Therefore, if we intend to have this
Agreement signed here in Geneva we should like the interpretation
which we gave in this document to be kept. That is to say, that
we want to be free to reconsider these different Articles as well
as the Articles on which we made formal reservation, and the other
Articles in Havana.
CHAIRMAN: Does any other delegate wish to speak on this
subject?
Mr. R. J. SHACKLE (United Kingdom) : Mr. Chairman, my impression
is that there is no obligation at all on a delegation as to the
line it will take in Havana, as Mr. Harold Wilson said in a speech
at the Plenaries that we should most definitely hope that the
delegations which have taken part in the preparation of this Draft
Charter will defend the basis of the text which has been reached.
We certainly hope that that would happen, but I do not think that
there is any notion of obligation on delegations to take a particular
line. That is my point of view, but it is only a personal one.
CHAIRMAN: Are there any other delegates who wish to speak?
Dr. H.O. COOMBS (Australia): Mr. Chairman, I believe the pro-
blem does not arise if the General Agreement takes a certain form.
Mr. I. MELANDER (Norway): I agree with that, Mr. Chairman.
CHAIRMAN: I think we can interpret what little has been said
on this subject, that the (Committee are in general agreement with the
interpretation just given by the United Kingdom delegate which con-
forms with the understanding of the Syrian-Le panese delegate that
the signature of the agreement does not prejudice the stand which
the other delegates wish to take at the Havana Conference.
E/PC/T/TAC/PV/5 CHAIRMAN: The Delegate of the Lebanon.
M. Moussa MOBARAK (Lebanon) (Interpretation): Mr. Chairman,
this, of course, is quite evident, and nothing should prevent
the Delegations, after they have signed at Geneva, from adopting
a different attitude and discussing the questions at Havana.
However, the question here is whether, if alterations are
introduced in the Charter at Havana in essential Articles, whether
the Agreement on Tariffs will be changed accordingly. Therefore,
there are two aspects of the question: first, the discussions
at Havana, and second, the changes which will be made later on.
CHAIRMAN: The second aspect of this question will, of
course, be dealt with when we come to item 6 on our Agenda.
We now pass on to item 3 - Tentative Timetable of developments.
We dealt fairly fully with this when we were discussing the question
of the significance of signature of the Agreement at Geneva; but
it might be useful to have a discussion as to the dates set forth
in the tentative timetable. It also gives an opportunity to
consider the point which was raised by the Belgian Delegate at
our last meeting, which was, would it be possible or not for
Parliaments to discuss the General Agreement before the date of
simultaneous public announcement? I should think that the
answer to that would be that it would not be possible for
Parliaments to discuss the General Agreement until the date of
simultaneous public announcement, as otherwise there would be
danger of other countries getting to know about the Agreement,
and in order to safeguard the security of the document, no
discussion could take place until after the date of simultaneous
public announcement.
The Delegate of the United Kingdom.
E/PC/T/TAC/PV/5
V -4- V - 5 - E/PC/T/TAC/PV/5
Mr. R.J. SHACKLE (United Kingdom): I do not know whether
it would help at all with this problem, but so far as the United
Kingdom Government is concerned, we are doubtful whether we could
live up to the date of 15th December for provisional application.
We could be reasonably sure of 1st January, if the earlier
part of the time-table is adhered to; but we cannot very well
pledge ourselves to an earlier date than 1st January 1948. It may
possibly give a little more time for Parliaments to consider the
text if 1st January should be adopted as a general data. That is
the only comment that occurs to me.
CHAIRMAN: The Delegate of the United States.
Mr. J.M. LEDDY (United States): January let, for the
provisional entry into force, would, I think, be acceptable to us,
Mr. Chairman. We do think, however, that it is important to
adhere to the publication date of November 15th, that is, before
the World Conference opens, if it is at all possible to do so.
CHAIRMAN: The Delegate of Australia.
Dr. H.O. COOMBS (Australia): Mr. Chairman, when we
discussed the first part of this paper at our last meeting, I think
it was agreed that there should be after the authentication of a
text here in Geneva on approximately 30th September, a period of
about six weeks during which the Agreement would be open for
signature at least by certain countries - key countries, I think
they were referred to - giving a date by which those countries
could be expected to have signed the Agreement of November 15th,
which approximates to the date set out here for simultaneous
public announcement.
I see no difficulty in simultaneous public announcement on or
-, -6-
V E/PC/T/TAC/PV/6
about the last date for signature by the key countries; but it
has occurred to me that that might possibly be inconvenient for
some countries, and I think it would be as well, therefore, if
we were to test the position of the various Delegations here as
t whether they would require a period between the final date for
signature and public announcement.
For instance, countries may be unwilling for the text of the
Agreement and its content to be announced unless there are a
certain specified number of countries participating, or unless
particular countries of interest to them have in fact signed.
There may, therefore, be a necessity for a short period after
the final date for signature before the text of the Agreement is
published, to enable countries to confirm their signature in the
sense that the assumptions on which they made it have, in fact,
been fulfilled. Clearly, if there is one key Agreement for no
key participating country or for one of the countries which has
signed, they may well want to know that the other part to that
particular negotiation has, in fact, signed also before they agree.
As I say, so far as we are concerned, I think the simultaneous
public announcement immediately following the final date of
signature would be acceptable to us, but do think it is a question
which should be examined.
Mr. D. Y. DAO (China): Mr. Chairman, we have nothing to add
to what we said last time concerning the provisional application
of the Agreement; but there are two points which we would like to
have clerified in connection with the publication of the text of
the General Agreement and provisional application.
It is presumed that when the text of the General Agreement
is published, the Tariff Schedules will also be published, which
form part of the Tariff Agreement. It is quite in order for V - 7 - E/PC/T/TAC/PV/6
those countries to publish the Tariff Schedules which they will
apply provisionally say, on November 15th, but supposing a
country finds that it is impossible to apply the Tariff Schedules
on that date, is it correct to assume that the particular Tariff
Schedule of that country will be withhold from publication,
because if it is published alongside with other Tariff Schedules
it would cause dislocation of the trade of that particular country
by premature publication of the tariff concenssions which they
contemplate. Furthermore, I think it would be contrary to the
usual constitutional procedure for Tariff Schedules to be
published before being considered by their Iegislature. That
is one of the points which we would like clarified.
The second point is that those Tariff Schedules which are
applied provisionally will, it is understood, also be applied
to countries which have commercial relations with countries
pro ; 5 : ' I ;7i)?T1L.g these Tariff Schedules through the
operation of the Most-Favoured-Nation clause. - 8 -
J. E/PC/T/TAC/PV/5
CHAIRMAN: I think I can reply to one of the questions raised
by the Delegate of China by saying that it has been envisaged that
simultaneous publication of the full text of the General Agreement
(you will notice that the word "full" is underlined on page 6) means
the General Agreement with all the Tariff Schedules.
However, my understanding is that it is customary, in the case
of trade agreements, for them to be published before they are
submitted to parliaments' approval. Often, it is the practice to
publish them very soon after signature, and that of course does give
rise to the personal effect this might have on trade, but as these
are mostly tariff reductions, the effect it would have on trade
would probably be to slow up imports, which largely depend on the
state of the various markets. But if there were sufficient goods it
is probably that the importers would wait for the date of the entry
into force of the General Agreement to proceed with their importing.
On the other hand, if the market were short of goods importing
until
would presumably continue/a few weeks prior to the coiming into
force of lower rates.
MR. D.Y. DAO (China): Thank you very much for your
explanation, but we find that difficulties still remain for those
countries who cannot apply the Tariff schedules provisionally which
they agreed to at Geneva, so we would like to give further thought
to the particular problem of the publication of the Tariff Schedules.
CRAIRMAN: The Delegate of Czechoslovakia.
H.E. Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, if I
understand correctly, the procedure should be the following: On the
30th September there would be the signature by the Delegates, not
yet involving the Governments, because the Governments would have to -9-
E/PC /T/TAC/PV/5
approve or disapprove it; the simultaneous public announcement
would be on the 15th November, but I am rather wondering what
Public announcement" means. Is it in the newspapers as a kind of
advertisement, or does it mean in connection with official papers
in the collection of laws? In our constitutional practice, I do
not see what kind of public announcement we can make of an Agreement
without saying at the same time when this Agreement will enter into
force. Now, suppose that we make this announcement and say it
will enter into force one day, but I do not know when, then of
course the importers will be looking at the reductions of tariffs
and they will stop importing, and then later we will see that only
certain countries will adhere to this Agreement and we will have to
revise the list of our concessions and withdraw certain concessions,
and meanwhile the whole of our trade would be stopped. Therefore,
that is why we do not see the necessity for a public announcement
before we are sure which countries are willing and able to put into
force the concessions.
CHAIRMAN: The Delegate of Australiáa.
DR. H.C. COOMBS (Australia): Mr. Chairman, I think that the
Czechoslovakia Delegate has emphasized a point which I made earlier,
that is, that countries may not wish to have published the full
text of the Agreement until they know what countries have, in fact,
accepted it and what Governments have, in fact, undertaken to give
provisional effect to the Agreement. That may mean the necessity
for a period between the final date for signature and the date for
the simultaneous announcement.
On the question of the nature of the simultaneous announcement,
it would be necessary, so far as we are concerned, for that - 10 -
J . E/PC/T/TAC/PV/5
announcement to be made to our Parliament, and we would suppose that,
in agreeing to the simultaneous announcement, we would be agreeing
to other Governments making the results of this Agreement public
at the same time as we make them public in Australia by presenting
the Agreement to Parliament. Whether any arrangements will be
made also for publication by the United Nations is a separate point
and does not seem to effect the issue, but certainly, so far as
we are concerned, we would think it necessary that we should
publish the results of the Agreement by presenting them to our
Parliament on the same day as they were going to be published
anywhere else, wherever it may be.
The other point that I think is of some relevance is the
question of whether all the Schedules will be published, or only
those Schedules affecting the countries which have already signed
the Agreement, that is, the concessions which have been exchanged
between them. P - 11 - E/PC/T/TAC/PV/5
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J.SHAKLE (United Kingdom): Mr. Chairman, as far
as the United Kingdom practice is concerned, I do not think that
the points made by Dr. Augenthaler would cause us any difficulty.
It is our regular normal practice to publish Trade Agreements
and Treaties before they are ratified. That is, in fact,
inevitable, because they have to be presented to Parliament
and naturally presentation to Parliament means publication. A
Trade Agreement is published as a White Paper and has printed
on the front of it "This Agreement has not yet been ratified
by His Majesty". That I resume is the technique we could
follow in this case.
As to the risk that the publication of these Agreements
before they are put into force might cause some slowing up of
trade, I think that you, Sir, have already dealt very effectively
with that point. I do not think there is any more to say
about it, and I should not think that the result would be serious.
As to Governments getting to know which other Governments
have signed, I presume that the Secretariat would at once
telegraph to al1 the Governments of countries here represented
each signature as it was made, so that all of the countries
here represented would know from day to day what the position
was as regards signature. If that procedure were followed
I should think there would be no need for any long interval
between signature and publication. I quite appreciate that
there might be some interval, but I should not think it need
be a long one. Thank you.
CHAIRMAN: The Delegate of Norway. P. E/PC/T/TAC/PV/5
Mr. J. MELANDER (Norway): Mr. Chairman, we have had some
of the same doubts as the Delegates for Czechoslovakia and China
have expressed and I may mention that in our case the normal
procedure is that although the draft texts of Trade Agreements
and Payment Agreements are published before they are laid before
Parliament, with regard to Tariffs the position is the opposite.
Those are not published until they have been accepted by
Parliament in Secret Session.
In this case here, however, we have come to the conclusion
that to make any objection to the proposal made in the Draft
General Agreement would lead to a series of difficulties.
First of all, it would mean that one would have to revise
the Schedules of those countries which not only signed the
Final Act but which also signed and put into force provisionally
the Agreement. That would really mean that we should take up
again for revision all the Tariff Negotiations we have had here
in Geneva. That is one main objection we have against the idea.
Secondly, the objection that there might be some inconvenience
to trade we do not consider to be very serious, in fact that
would really be met if the countries concerned, by so to say
unilateral action, reduced the tariffs accordingly without
any obligation; But in any case we have come to the conclusion
that although this would certainly be contrary to our normal
procedure, we think the proposal here is the only reasonable
one and if one wants to have a General Tariff Agreement one
must accept it.
CHAIRMAN: The Delegate of the Lebanon
- 12 -
I P -13- E/PC/T/TAC/PV/5
Mr. MOUSSA MOBARAK (Lebanon) (Interpretation): Mr.
Chairman, I think the question has a double aspect: first the
General Agreement with the Tariffs, and second, the Tarrifs
themselves.
I do not know the possibilities of other countries represented
hero, but so far as my country is concerned, I have already
notified the Secretariat that we will do our best to enforce the
Tariffs provisionally as soon as possible, but the General
Agreement must be submitted to the vote in Parliament and there-
fore we cannot possibly contemplate its publication before
March or April next.
I therefore would like to know whether we are discussing
at present the General Agreement with the Tariffs, or the
Tariffs alone. If the latter is the case, the 15th November
would suit us; but if the General Agreement is meant here, then,
as I said before, we cannot do anything before March or April
next.
CHAIRMAN: In reply to the Delegate of the Lebanon,
I would state that we are considering here this tentative time-
table and what has recently boon the subject of most
discussion is Item 2: "Simultaneous public announcement of
the full Text of the Generel Agreement." That of course means
the General Provisions of the Agreement and the Tariff
Schedules.
The Delegate of Belgium.
M. PIERRE FORTHOMME (Belgium): Mr. Chairman, it
seems to me that up till the speech by the Delegate of
Lebanon all objections to publication were on the basis of the
Tariff Schedules and not of the General Agreement and I think E/PC/TAC/PV/5
it would clarify the discussion here if we first of all dis-
covered if any Delegations would have any objection to the
publication of the text of the General Agreement apart from the
Tariff Schedules before it would be laid before the Parliaments.
I personally do not think there would be any objection to
these terms being known.
CHAIRMAN: The Delegate of the United Kingdom,
Mr. R.J.SHACKLE (United Kingdom): Mr. Chairman, naturally,
of course, the practice in the United Kingdom is no guide to
what happens elsewhere, but, so far as the United Kingdom is
concerned, there is no difficulty about laying an Agreement
before Parliament even if Parliament is not sitting, because the
Agreement is laid on the table of the House and is published,
and that counts as laying it before Parliament. No doubt it
is in a sense a legal fiction, but it is legal, and is what we
do. I daresay other countries may have a similar procedure.
CHAIRMAN: The Delegate of the United States.
Mr. J.M.LEDDY (United States): We have negotiated
Trade Amendments with, I think, some thirty countries, all of
which contain both Tariff Schedules and General Provisions.
I believe there is no single case in which the Agreements
were not published anywhere from two weeks to six months
before their entry into force, and in almost all cases it was
not known at the time of publication as to the time they would
enter into force. I cannot help but believe that it has been
a very common practice in Commercial and Tariff Agreements
to publish them before they enter into force and before it is
known when they will enter into force.
P
- 14 - E/PC/T/TAC/PV/5
Dr. J.E. HOLLOWAY (South Africa): It seems to me that there
are three questions there and we need not preoccupy ourselves with
the first. It is the publication of the General Agreement which
has already been published, and therefore we need think no more
about it.
Secondly, it does not seem to me to be possible to publish
the Agreement in fragments because it seems to me that the process
of fragmentation would be so difficult that it is really not worth
doing.
Thirdly, it does not seem possible to me to lay it before all
the Parliaments at the same time because they just do not meet at
the same time.
As far as publication in advance is concerned, our position
is exactly the same as that of the United States of America. We
have frequently published changes in tariffs which mean increases
in tariffs quite a long time before these increases have come in.
There is an advantage in that because it
does give your traders some time to off-load without being caught
with heavy stocks which they cannot pass on.
M. HASSAN JABBARA (Syria) (Interpretation): Mr. Chairman,
the usual trade agreements do not provide for provisions as essential
as the ones we are dealing with here. Usually they deal only with
commercial and customs treatments, and usually, too, they are made
known a short time before their final ratification because their
ratification can always be taken for granted. Now, the General
Agreement we are dealing with here includes both tariffs and legal
provisions which have to be submitted to Parliament. If this
General Agreement were a simple trade agreement it would not be
necessary as far as our country is concerned to submit it to the
approval of our Parliament. It could be published and implementèd
at once. If it were possible, as my Lebanese colleaguehas suggested,
ER - 15 - - 16 -
to provide for two different procedures, and provide one special
procedure for tariffs, namely, their publication and effective
enforcement at once, and as far as the text of the General _agree-
ment is concerned, to deposit it before Parliament. I think all
countries concerned would be in a position to adjust themselves
and accept this procedure.
M. ANGEL FAIVOVICH (Chile) (Interpretation): The Cnilean
Parliament will have to approve the General Agreement. Therefore
the Chilean delegation is unable to make any undertaking at this
stage. The only part of the agreement that could be put into
force without Parliamentary approval is the Tariffs.
M.PIERRE FORTHOMME (Belgium): Mr. Chairman, I shall think
it would be an advantage if we could split this discussion into two
and find out first whether there is any objection t text of
the General agreement, apart from the Tariff Schedules, should be
known at any given date - whether shortly before the Parliament in
question has examined the text, or a long time before. I think,
personally, that there would be no objection to that, - Reasonsls
which
of secrecy/were advanced --, wera! all paplicab tleo the rtaiff
concessionsnazd not to the general tmris of thiA -greemenw vchhi,
ae Dr. Holloway pointed out, would be very similar to the published
text, of thD iraft Charter. If we find that nonoe fhein delegations
hereahe v any objections to the text being known, one, two,hrelne
or six monthse bfore Parliament examined it, then we could drop
consideration of that part and consider the problems on tariff con-
essaions which I think present more difficuIly.
M. MUTSSA'. MOALRAKS (eubanon): (Intep,retation): Mbr.Chlairman,
personally we would have absolutely no objection to accepting hen
proposal of the Beli.an delegate. But I think this would raise
one difficulty,na mely, some Parliaments may refuse to voet on he
E/PO/T/TAC/PV/5 ER. - 17- E/PC/T/TAC/PV/5
General Agreement before knowing what happened to the Draft Charter
at Havana. Therefore, while many governments would find it possible
to enforce the new tariffs at once, there might be some delay in
the vote on the General Agreement.
M. PIERRE FORTHOMME (Belgium): Mr. Chairman, it seems to me
then that if we have an Agreement that in itself has no difficulty
in the publication of the terms of the Agreement,there remains the
question of the tariff concessions, and there I see the problem
divide itself as follows: Certain countries could apply the tariff
concession by an executive act prior to any kind of approval by the
Parliaments subject to subsequent approval. Some countries would
have to get Parliamentary approval because Parliamentary approval
could be, for the purpose of provisional application of the tariff
concessions, divorced from approval of the text of the General Agree-
ment, the approval being a definitive act on the part of the Parlia-
ment, and there may be some countries which cannot obtain Permission
to apply the tariff concessions even provisionally without a defini-
tive vote of their Parliaments on the whole of the agreement. In
the case of the Lebanese delegation, they would be able to apply the
tariffs provisionally and reserve the definite approval of the
Agreement until such time as the result of the Havana Conference
would be known from the Charter point of view, Our own Government
would be in the same position. I think it might be interesting to
see if there are any delegations here confronted with
the difficulty, that not even provisional application with Parlia-
mentary sanction would be possible without approval of the General
Agreement in a definite form. - 18 -
~ - L- E/PC/ T/TAC/PV/5
Mr. J.M. Y LEDD (UniStateittes): I think we should recall
that the provisional applicatio of. the genepal Irovision requires
merely thatffecsffot be given to those provisions to the extent not
inconsistent with the existing legislation. I in other words,
changes in existing legislation would not be required, and I wonder
therefore whether the difficulties indicated by the delegate of
Lebanon would not be met by that provision.
M. MAUSSIARAB AXK.(Lebanon)n (Ipter.retation): Cr. Ohairman,
X. am afraid I h avesto Gay no because this GeneAgl .zreement is a
toxt an which we have to take a legal decision as it is a novelty.
If it were a simple commercial agreement, ascoy ealleague from
Syria pointed out, we could ratify it without any delay, but the
laws in force at present do not enable u to.do so.h s Tii would have
.o be voted, and as I said previously, this procedure cannok taie
l1ace in our country unMalc!irohApr d-yil.
HA. ENTHALERL1ER ecoso osovakia): Mr. Chairman, I think it
may be useful to the delegations present here if I explain our
position. It would be the following. We dA are able and willing to
put the provisions in force in tariff reductions, and we may do that
onorha t notice, so there would be no reason for not putting those
reductions into force before the 15th November. Now, iu ovr country,
there is a practice that reductions of tarsffE are not published
before they enter into force. It means that if some date is fixed
we would be obliged to know at the moment of publication which
countries are willing to put those reductions into force on themsane
date, and, as you know, there is a general custom that onennoaoot
publish reductions in a certain country if this respective country
does not agree because it is impossible to publish something in one
country and keep it restricted in another country. ER -19- E/PC /T/TAC/PV/5
Now, as to the Tariff -Agreement in general, it would be
necessary in Czechoslovakia to present it to the Parliament. I
am afraid that we are in the same position as the delegations of
Lebanon and Belgium, that is, that I doubt if our Parliament would
be willing to take any decision on these general provisions before
we know what the contents of the Charter are in general. We do not
know the publication date, as Mr. Shackle has mentioned, though we
may have some publication of the Tariff Agreement, but it would be
rather a kind of private publication, not an official one, I suppose,
for the information of the public. It may be published as something
existing but which has no legal value at all.
Now, Mr. L Leddy mentioned that only those provisions of the
TarifA agreement which are not conflicting with the legislation of
the respective countries would eetar into force. I would ask Mr.
Leddy to explain to me what actually the UniteS -tates understands
by those internal legislations. D 1oes it mean laws or does it mean
administrative measures taken as a. consequence of these lawsa end
in execution of these laws? It can also mean administrative
practices. - 20 -
V
E/PC/T/TAC/PV/5
Mr. J.M. LEDDY (United States): I think the intent is
that it should be what the executive authority can do - in other
words, the Administration would be required to five effect to the
general provisions to the extent that it could so without
either (1) changing existing legislation or (2) violating
existing legislation. If a particular administrative regulation
is necessary to carry out the law, I should think that that
regulation would, of course, have to stand; but to the extent
that the Administration had authority within the framework of
existing laws to carry out these provisions, it would be required
to do so.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I observe
that the date set down in this provisional time-table for the
date of entry into force of the General Agreement is April/June.
Surely that will leave time for all the countries concerned to see
what has come out of the Havana Conference? The Charter will not
be actually in force at that time, but at any rate everyone will
see what is in the Charter. Will that not help as regards a
good many of the doubts and difficulties that have been voiced
here?
As regards our own practice, again it seems to me that we
should have no difficulty regarding the definitive enforcement:
we should have passed our legislation enabling us to make the
necessary duty changes. As far as the acceptance of the General
Agreement is concerned, that for us is an act of the Executive -
it binds only His Majosty and His Majesty's Government. It is
only where duty changes are concerned that there might be any
need to go to Parliament. We can actually enforce those
provisions, as I have said before, from 1st January. - 21 -
V E/PC/T/TAC/PV/5
It seems to me that, assuming that the necessary legislation
has been passed to enable duty changes to be enforced, when the
moment of ratification arrives and all the necessary acceptance
are in, surely it will be possible for every country, by some kind
of administrative order, to bring into effect the tariff charges
for which it already has got the consent of its Parliament I
should have thought that by some variation on that procedure
everybody could manage to enforce the Agreement and the Schedules
definitively by the stated date of April or June next.
CHAIRMAN: The Delegate of Australia.
Dr. H.C. COOMBS (Australia): Mr. Chairman, it seems to me
that some of the difficulties which Delegates have outlined are
overcome by the device which the Tariff Steering Committee itself
suggested, that is, that the Agreement should come into force
provisionally on 15th December or 1st January, as the case may be,
provided that what they called "key" countries had agreed to
implement it provisionally. I am not quite share what countries
they had in mind as key countries, or how many there would have to
be to make it worth while for other countries to come in; but if
it were clear as a result of our discussions here in Geneva that
there were sufficient countries who would be in a position by
15th November to indicate whether or not they would put the
Agreement into force provisionally on l5th December, for it to be
worth while bringing it into force provisionally on that date, then
the remaining countries who, for constitutional or other reasons,
are unable to bring it into force provisionally by that data, would
be
not called upon to do so : they could wait and come in in accordance
with their constitutional practce at any time - presumably before
the General Agreement comes into force finally or authoritatively in
June of next year. E/PC/T/TAC/PV/5
If my understanding is correct, the Schedule - that is, the
programme set out in the first part of it, at any rate - would
appear as follows. Item 1 would be the final act of Geneva,
authenticating the text on 30th September. Item 2 would be the
final date for signature by key countries of the Geeral Agreement,
which would be November 15th, and then I feel that it would be
necessary, in order to permit those countries which had signed
to assure themselves that the necessary number of other countries
had also signed, to leave a short period between November 15th
and the date of simultaneous public announcement - perhaps a week
would be sufficient. We might put November 22nd for the
simultaneous public announcement, or if a date before the World
Conference is wanted, perhaps both dates could be moved back a
little, making one November 10th and the next November 17th.
Then the fifth item would be entry into force of the General
Agreement through the provisional application by key countries
on January 1st (if the United Kingdom Delegate's suggestion is
agreed to).
If that were done, the problems of the countries who would
have difficulty (provided they do not happen to be one of the key
countries) can be met merely by their waiting until they are in a
position to apply the Agreement provisionally, and their doing it
at any time between November 15th and the date of its coming into
force definitively.
If I may refer to a point raised by the Belgian Delegate, in
which he asked whether any Delegates would feel difficulty about
the prior publication of the text of the Gcneral Agreement as
distinct from the Schedule which it would contain; so far as we are
concerned, we see no difficulty in principle to such prior
publication of what would, in effect, merely be a text, except that
- 22 -
V V - 23 - E/PC/T/TAC/PV/5
it would obviously be undesirable that that text should include
the names of countries, because the inclusion of such names
would imply, an anticipation of a decision by their Governments
which had perhaps not yet been taken. Also, since some of the
proposed Articles do concern individual countries and groups of
countries, if those Articles are to remain in the General
Agreement there might be difficulty about their publication,
since they would refer specifically to individual countries and
might, therefore, be taken to imply a decision by those countries
to participate in advance of a specific decision by their
Governments.
My feeling, therefore, is that while there is no objection
in principle to the publication of such a text, it would be
necessary to exclude any reference to individual countries or
Governments, and that consequently, unless there is something
definitely to be gained by prior publication, it would appear to
be easier and simpler to publish the whole of the General
Agreement any general Articles it may contain, and the actual
Schedules, on the same date.
CHAIRMAN: Dr. Coombs has just set out a revision of our
tentative time-table which seems to the Chair to embody most of
the points on which there was general agreement during our
discussion at the last meeting and at this meeting. I would,
therefore, like to know if any of the other Delegates have any
Objections to any of the points which have just been set forth
in the revised time-table which Dr. Coombs has so clearly
set out.
M. Pierre BARADUC (France) (Interpretation): May I ask
for a repetition of what was exactly proposed by Dr. Coombs? J. E/PC/T/TAC/PV/5
CHAIRMAN: As I have understood Dr. Coombs his outline of the
programme was substantially as follows: On or about the
30th September, there would be the Final Act establishing the
authenticity of the text of the Agreement; the second item on the
tentative time-table would be the last date for signature of the
Agreement by so-called key countries - that would probably be
November 10th - 14th; there would then be a simultaneous public
announcement six or seven days later; there would then be the
provisional application of the Agreement by key countries on
January 1st. In other respects, the time-table would be the same
as is set out in our paper.
The Delegate for India.
MR. B.N. ADAKAR (India): Mr. Chairman, many of the difficulties
which we had seem to have been removed by the understanding which
was reached at the last meeting of the Committee that a Member
could postpone its signature to the Agreement until the 10th November.
Since that gives us sufficient time to study the Agreement as a
whole, we shall not need, I hope, any more time for dealing with
provisional application to the Agreement. We would therefore be
quíte prepared, if we signed the Agreement on or before the
10th November, to give provisional application to the Agreement very
soon after the simultaneous publication of the Agreement. We shall
have no objection to the Agreement being published, both in regard
to its general provisions and the Schedules attached to the Agreement.
It is, of course, understood that although the 1st January is
proposed as the date by which key countries should give provisional
application to their Schedules and the General Provisions, there
would be nothing to Prevent any country, wishing to give provisional E/PC/T/TAC/PV/5
application earlier, from doing so. We expect that we would be
able to give provisional application to the General Agreement very
shortly after its text is published, because, under the circumstances
of our country, it would not be desirable to let a lone period
elapse after the text is announced.
CHAIRMAN: The Delegate of the Netherlands.
DR. A.B. SPEEKENBRINK (Netherlands): Mr. Chairman, the time-
table as proposed by Dr. Coombs presents to the Netherlànds no
special difficulties, so that we could accept it provided that the
key date here is the 30th September, beong the Final Act of the
General Agreement and also of the Tariff Schedules, but if that date
were to be moved to a later date, then we must study this question
further.
CHAIRMAN: I might say, that all this discussion is based on
the assumption that the Tariff negotiations will be completed on or
about that date.
The Delegate of the Lebanon,
MR. M. MOBARAK (Lebanon) (Interpretation): Mr. Chairman, we
are not in disagreement about the date, but have a substantive
question. I do not understand the words "provisional application
of the General Agreement". I do not see how a General Agreement
can be applied provisionally. As I said before, this would require
a law in our country and after the law is passed the application is
final and cannot in any way be provisional. I wonder how this can
be possible in any other country - apparently the position is not
the same everywhere although the Delegate for Czechoslovakia and the
Delegate for Belgium have said that their position was the same as ours. - 26 -
J. E/PC/T/TAC/PV/5
I would like to know what happens in those countries which, as we
do, need a law to implement the General Agreement, and as I said
before, we will not be able to do this until March or April and I
would like to know what our position would be before that date?
CHAIRMAN: The Delegate for the United States.
MR. J.M. LEDDY (United States): Mr. Chairman, I was just
going to say that the general time-table proposed by the Delegate
of Australia is, I believe, acceptable to us.
I did want to go back to a point which the Delegate for the
Lebanon has now touched upon. I think the position would be that
it would be open to any country to sign the General Agreement here
in Geneva before departure, and unless it were provided specifically
in the Agreement that by its signature a country would be
committed to giving provisional application, it would not be
committed to do so. In other words, the signature would not bind
it to anything and it would only be after the country had
obtained parliamentary or other necessary approval at home and
accepted the Agreement that it would have to give effect to it. I
think that really takes care of the question of the Delegate of the
Lebanon, because unless Lebanon is listed among the key countries it
should have no difficulties wiith this proposal for provisional
application by particular countries.
CHAIRMAN: The Delegate for South Africa.
DR. J.E. HOLLOWAY ( South Africa): Mr. Chairman, may I
suggest that, in Dr. Coombs time-table, provision be made for the
countries which are not key countries to have a period - I would say
right up to a week after the beginning of the Havana Conference - - 27 -
J. E/PC/T/TAC/PV/5
to sign. As the United States Delegate has just pointed out, as
far as they are concerned, the only action which really has any
binding force is that in relation to parliaments, so the actual
date of signature is a matter of convenience - certainly as far
as we are concerned, it would be far move convenient not to have to
hang around, and to sign on the dotted line.
DR. H.C. COOMBS (Australia): Mr. Chairman, it seems to me
that provision is made for countries other than key countries. If
they are of the kind that are able to give provisional application
to the Agreement, and wish to do so, they can do it at any time, it
seems to me, up till April or June, or up to the time of Item 6 of
the present Schedule. Similarly, as I understand the position is
in the Lebanon, if they have not the power to bring an Agreement
into force provisionally, then it seems to me that, they just
by-pass the provisional application of the Agreement; they sign
when it is convenient for them to sign, and they bring the Agreement
into force definitively when other countries bring it into force
definitively - in June, or whatever it is, of the next year. In
the meantime, they will have put the relevant law before their
parliament and obtained parliamentary approval, if that is the
procedure which they follow, but unless they happen to be a key
country, it seems to me that their position is quite clear - they
are not required to put the Agreement into force provisionally at
all; they decide whether they are going to put it into force
definitively and take the necessary action, and it becomes operative
the next year, when other countries have reached the same stage.
CHAIRMAN: The Delegate for the United States. E/PC/T/TAC/PV/5
MR. J.M. LEDDY (United States): Mr. Chairman, I would like
to make a very tentative proposal which I think may help our
thinking on this problem and enable us to separate clearly, in our
minds, the definitive coming into force of the ágreement and the
provisional.
I suggest that we might remove from the provisions of the
Trade Agreement the existing text relating to provisional application,
and have instead a protocol. This
protocol would be open to signature by any Member country which
wished to sign up to, say, November 15th, and will enter into force
on January 1st, in all key countries.
The Agreement itself would be open to signature
at any tine beginning September 30th here in Geneva for, say, a
period of two or three months, and would enter into force when
certain countries accounting for a certain proportion of trade had
actually accepted it, in other words, had taken all the necessary
steps to obtain the necessary parliamentary ratification. I think
in that way we may be able to avoid some of the difficulties which,
I believe, have resulted largely from a mis-understanding of the
proposal now before the Committee.
I might add an explanatory word there that the signature of
the protocol would commit the signing countries to give provisional
effect on an agreed date if the key countries would sign. The
signature of the agreement would not commit any country to any thing.
- 28 - 29 E/PC/T/TAC/PV/5
CHAIRMAN: The Delegate of Belgium.
M. PIERRE FORTHOMME (Belgium): Mr. Chairman, I would like
to clarify a bit the position of Belgium with regard to the
provisional application of this agreement because it might
simplify thinking too. It is exact and true that by executive
action we can only put into force provisionally the Tariff
Schedules until such time as they have been approved by Parliament;
but that does not mean that it is impossible for us to put the
Agreement into force provisionally, either according to Article
XXXII or according to a Protocol as has just been proposed,
because it is well within the faculties of the Government to
ask Parliament for authority to apply Parts I and III and Part
II to the extent of executive power from Parliament, reserving
for later on the question of having Parliament examine the
definite approval of the Agreement.
CHAIRMAN: The Delegate of Australia.
Dr. H.C.COOMBS (Australia): Mr. Chairman, without wishing
to comment on the suggestion of the United States Delegate that
the provisional operation of the Agreement could best be provided
for by a Protocol separate from the main Agreement, I want to
make it clear that, so far as the Australian Delegation is
concerned, we would not wish to sign the Agreement at Geneva,
whatever may be the opinion of the United States Delegate as to
what such a signature does or does not mean. I understood that
we had agreed at our last meeting that what we would sign here
would be a Final Act which would authenticate a text and that
is as far as we would wish to go. E/PC/T/TAC/PV/5
Once you sign an Agreement, there may be different
interpretations and opinions about what such an Agreement means or
what it commits you to. But if you sign a Final Act which is
properly worded, then what you are signing is clear and precise.
It can be specified in words that the purport of that signature
is to authenticate an attached text. So I see no advantage
to be gained by deviating from that procedure which I understand
we had agreed upon.
As to the other suggestion which I understand is that we
might separate out from the Agreement itself, the provisions
for Provisional Application and incorporated them in a
separate document, whether it is called a protocol or not,
I think that might be done quite easily and might have certain
merits.
CHAIRMAN: The Delegate of the United States.
Mr. J.M.LEDDY (United States): Mr. Chairman, I would
just like to reply to the statement made by the Delegate of
Australia. If the Delegate of Australia got the impression
that I was in any way suggesting that Australia might sign an
Agreement or a Protocol here in Geneva, I was not suggesting
that at all. I was simply trying to outline the reasons for the
separation of the Protocol and the Agreement in the light of
the views expressed by countries other than Australia in this
discussion. 0n the other hand it had always been my clear
understanding that the Agreement would be drawn in such a way
that countries other then Australia if they so wished could
sign the Agreement here in Geneva.
Mr. R.J.SHACKLE (United Kingdom): I think the procedure
suggested by Dr. Coombs would entirely meet the views of my
30
P E/PC/T/TAC/PV/5
Delegation, that is to say, the signature of a Final Act here,
with a separate Protocol for Provisional Enforcement to follow
after. That seems to us would be a clearer, neater method
of provisional enforcement.
As to the suggestion Mr. Leddy has just made, I cannot see
that there will be anything to stop a Delegation which wishes
to sign the agreement itself from doing so up to the date of
1Oth or 15th November, whatever it is which we have set down.
I imagine they could sign the Final Act and at the same time,
if they like, sign the General Agreement. But there would
be no obligation on anybody, as Mr. Leddy has suggested, to
do more than sign the Final Act. I think we could all be
satisfied in that way.
CHAIRMAN: The Delegate of the Lebanon.
Mr. MOUSSA MOBARAK (Lebanon) (Interpretation): Mr. Chairman,
I would like to know what exactly is meant by the signing of the
Final Act. Is there any difference between this and a
signature ad referendum? I Australia and the Unted Kingdom
are prepared to sign only the Final Act, I would like to know
what is the position of other Delegations in that respect.
CHAIRMAN: I think, as Dr. Coombs explained when making
his proposal at the last meeting for a Final Act, it would be
an Act simply to establish the authenticity of the text and
nothing more.
Mr. MOUSSA MOBARAK (Lebanon) (Interpretation): Mr. Chairman,
therefore, if I understand rightly, this would be a draft that
each of us would take home to our Governments, and after our
Governments had notified the interested parties that they were
P P 32 E/PC/T/TAC/PV/5
in a position to accept it, then the signature would take place.
And now I would like to know where it would take placc and how.
CHAIRMAN: I think the understanding of the Lebanese
Delegate is correct, As to the place of signature, that is a
better for subsequent discussion and decision. No doubt it
will be the seat of the United Nations - or some other place to
be agreed upon.
The Delegate of the United States.
Mr. J.M.LEDDY (United States): I think what the Delegate
of Lebanon said was that a country would sign the Agreement after
it had notified the Secretary-General that it was in a position
to accept it. I think the procedure would be exactly the
reverse; signature precedes acceptance.
CHAIRMAN: I think we are coming to a substantial measure
of agreement on the Tentative Time-table, that is that there
should be a Final Act signed in Geneva on or about September 30
which all Delegates would sign and which would establish the
authenticity of the text. The agreement would be open for signature
from that date up to another date which I think the United States
Delegate.has suggested now should be two months from September 30.
Then there would be a Protocol providing for Provisional Application
and it is only in respect of the Protocol that the key countries
and non-key countries divarge. The Protocol would be open for
signature after some date, from, say, 14th November. Is that
correct?
The Delegate of Australia.
Dr. H.C. COOMBS (Australia): Mr. Chairman, I do not see the
necessity for the fixing of a date for the signature of the E/PC/T/TAC/PV/ 5
.Agreement apart from the Protocol or whatever embodies the
Provisional Acceptance or promise to accept this Agreement
provisiònally two months after the 30th September. As I
understand these things, signature carries some implications.
We sign the Fina.l Act as an indication that we accept the
text attached. We sign before the l5th November as an
undertaking that we will, subject to a sufficient number of
other countries doing the same, provisionally apply the
General Agreement on the 1st January. When we come to sign
the General agreement itself, apart from anything which embodies
it's provisional application, I would understand that signature
to be an undertaking, subject to confirmation by our Parliaments,
to apply the General. Agreement, definitively, and, so far as we
are concerned, we would not be in a position to give that under-
taking to apply the General Agreement definitively until after
the World Conference, and therefore we would not wish to sign
until after the World Conference.
When the World Conference is over, our Government will be
in a position to say "We will or we will not apply this, subject
to the confirmation of our Parliament", and until we get to
that stage I think, as far as I can see, nothing is gained by
making any provision for the signature of the General Agreement,
apart from whatever signature is necessary to indicate the
willingness of the key countries, whatever they may be, to
apply the Agreement provisionally.
So that if it is desired to put into this Schedule a date
for signature of the Agreement as apart from the Protocol for
Provisional Application, we would wish that date to be after
the termination of the World Trade Conference, preferably a
month later.
P
33 E/PC/T/TAC/PV/5
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J.SHACKLE (United Kingdom): Mr. Chairman, it is a
very small remark: I do not differ from anything Dr. Coombs
has said but it does seem to me that, as for as definitive
application is concerned, signature is a stage which hardly matter.
One could almost dispense with signature in the way of
definitive application and simply accept.
Dr. COOMBS (Australia): I quite agree: that is why I was
perfectly happy when no provision was made for that in the
original schedule.
CHAIRMAN: Any other comments.
Mr. R.J.SHACKLE (United Kingdom): Mr. Chairman, there is
one tiny thing: I don't know if it is really worth going into
- only a point of mechanism arising out of what Dr. Coombs said
about the difficulty of specifying the names of countries for
provisional acceptance. That might give rise to a small
problem but it could easily be solved in some way such as this:
that there could easily be an understanding as to which were the
key countries: the representatives of key countries at New
York could all meet at a certain rendezvous at a certain time,
they could count up to make sure they were all there, they could
produce notés to give their different authorizations, all take our
their fountain pens, and sign.
P
34 35
ER
E/PC/T/TAC/PV/5
Dr. H.C. COOMBS (Australia) Mr. Chairman, I do not see
that there is any difficulty about the point that I have raised,
namely, the inclusion of the Governments concerned if the text of
the Agreement were published at the same time as the Tariff Schedules,
is a
but it does arise if there/desire to publish the General Articles to
the Agreement some month before the Tariff Schedules themselves
come into force, but if they are to be published together, I ate no
difficulty at all about the inclusion of the names of the countries
concerned.
Dr. H.E. Z. AUGENTHALER (Czechoslovakia): I see that we are
turning around the same difficulty the whole time so I would like to
make a suggestion, and I shall make this proposal to all delegations
present. I think it would be a pity after four months of negotia -
tions here to lose our time and the money of our Governments and in
the end be still uncertain as to what will happen, so we propose to
all the delegations with whom we have negotiated the tariff reduc-
tions to put them into force in a way in which those countries find
best in their constitutional practice, - if they prefer bi-lateral
agreements, or as an annex to the existing commercial treaties,or
any way they find possible, because I think the aim of our negotia-
tions was tariff reductions. If we do so we shall act exactly in
the terms of our recommendations and the resolutions that we have
taken. Those tariff reductions could be incorporated later or
immediately according to the wishes of the particular countries
in this Tariff Agreement, and any country would be free to accede
or not to accede to the Tarifff Agreement independely of those tariff
reductions.
M. P. FORTHOMME (Belgium): Mr. Chairman, I would like some
explanation of the statement that the putting into force of this ER 36 E/PC/T/TAC/PV/5
agreement does not mean acceptance of the Agreement, at least by the
Governments which are putting the Agreement into force provisionally.
an Agreement
It seems to me that putting/into force provisionally is accepting
it subject to two conditions: one , that parliamentary approval is
obtained later on; two, that the conditions of agreement should not
be changed by the Charter which comes later on. Except for that it
seems to me that once you decide to apply provisionally, you accept
the provisions as far as the Government is concerned.
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman, I think my
understanding of the position as regards provisional enforcement is
entirely the same as Mr. Forthomme's. There is, of course, a
difference: we have written into the draft of the General Agreement
that countries that have merely enforced provisionally could withdraw
on 60 days notice. If, of course, we had a separate protocol, I
presume that provision would be transferred to the Protocol, Apart
from that my understanding is exactly the same as his.
Mr. P. FORTHOMME (Belgium): Mr. Chairman, I understood that
this provision of withdrawal within 60 days was principally put in
in order to be able to cope with Parliamentary refusal of the Agree-
ment,or a change of circumstances, such as the previous acceptance of
the Government which would have to be withdrawn, because, as I said,
the basic conditions in which the concessions were given, had been
changed; but I agree with the delegate for the United Kingdom that
provisional putting into force is acceptance by the Government. I
think that there should be signature of the Agreement because, I my
understanding of the signature of the Agreement it/is an engagement by
the governments to present this to a legislative authority and to get
the final approval and ratification. Therefore I think that there
should be a signature of the Agreement. Otherwise we would be putting E/PC/T/TAC/PV/5
into force provisionally something for which we would not even have
the engagement of our Governments to present it to their Parliaments.
Mr. A.J. SHACKLE (United Kingdom): Would there be any
difficulty about writing in the Finral -eot that the delegates will
recommend the document to the attention of their Parliaments?
CHAIRMAN: I am afraid that if we reopen that question we
might Just as well sign. I think the purpose in fact is just to
establish the text.
Mr. J.M. LEEDY (United states) I wonder whether it would not
meet the point of the Belgian delegate, as well as Dr. Coombs's, sim-
ply to approve the date of the signature of the Agreement after the
World. Conference?
Mr. H.L. FRESRUET (Cuba): Mr. Chairman, there are so many
interesting points in the speeches that the delegates are making
here, and we are enjoying them so much that we do not want to miss
a word from them; so I wonder if the delegates would be kind enough
to speak a little bit louder.
CHAIRMAN: I think that applies to Mr. Leddy's last point.
Mr. J.M. LEDDY (United States) I suggested that Mr. Fort-
homme's proposition might be met and also Dr. Coombs's by putting
the closing date for signature of the General --greement after the
World conference. I do not think it would even make a difference
if it were six months after.
Mr. B.N. ADAKAR (India): Mr. Chairman, may we know, as a
matter of clarification, whethe if the signature of the Agreement is E/PC/T/TAC/PV/5
allowed to be deferred until after the end of the World Confer-
ence, it would be practicable to publish the text of the Agreement
along with the schedules? Is it intended that the Agreement
should be published along the schedules only after the Buy countries
have signed it without waiting for a large number of other countries
to indicate their decision as to whether they are going to sign or
not?
Dr. J.E. HOLLOWLY (South Africa): M. Chairman, When we
discussed this matter last week, I suggested that either the Tariff
Negotiations Working Party or a special ad hoc Committee should draft
the necessary instrument putting in dates and putting in percentages
which can be changed by the meeting if necessary. Well, we have
on
spent some hours/;ht and I think that if an outsider examined the
verbatim reports of the two meeting s he would be doubtful if we had
thrown any light on the subject. Is are merely arguing around
getting nowhere because we have not got anything definite. If we
had a definite text of the final Act and a definite text of the
protocol with definite dates in it, then we could say whether those
dates suit us and whether those percentages suit us, and could there-
fore make progress. it seems to me we are, going round a mulberry
bush now.
CHAIRMAN: There in a lot of substance in what the South
African delegate has said, but I should like to point out that
the Tariff Negotiations xIing Party has spent several months
and.eavouring to draft the General Agreement, and it is now before
us subjec to discussion, Before we can take upon ourselves
the
the task of drafting, we must get clear/expression of views from
all the members of this Committee that this subject of the General
ER E/PC/T/TAC/PV/5
Agreement is of interest to all members of the committee, and that
is the reason for which we have been having this general discussion
on the 7 points covered by this Paper. I think the discussion of
to-day has served a useful purpose. It has brought about some
ideas which have not been present in our minds before. I think
we have at least a general agreement that there should be a Final
Act, and thatthoue signing the Act agree that this General agreement
which has been drawn up in Geneva is accepted. We have also agreed
provisional application of
that/the General Agreement here/should be separated from the General
agreement and put into a Protocol. That Protocol should name
countries that are necessary in order to give provisional applica -
tion . The Protocol should be open to signature up to some date,
say, November 14th. The question upon which we have a difference
of opinion is whether or not there should be provision for a final
date of signature of the agreement. The United States delegate has
made a proposal that this could be any time from the date of signing
the Final Act up to one month after the World Conference. I have
not heard any objection to that proposal, so I take it that that is
agreed. The only point on which we have some sort of difference of
opinion is the simultaneous public announcement, A suggestion has
been made that there might be a public announcement of the terms of
the General Agreement apart from the tariff Sonedules, but I do not
find any strong measure of support for the separation of the publica-
tion of the General provisions from the Tariff schedules. F
~ ~ ~ ~~~~~~~~~~~~~~:x
. 2
39 E/PC/T/TAC/PV/5
The whole purpose of the General Agreement is to give
effect to Tariff Schedules, and therefore the document would not
be complete without the Tariff Schedules. I think there is
agreement here that there has to be publication before there
can be provisional application, and that that publication should
take place shortly after - Dr. Coombs has suggested a week -
the date of the Signature of the Protocol.
I think we can leave this question now, which is item 3
on our Agenda, and wve can consider that we have dealt with
item 4, Provisional -Application of the Agreement. There is
a pretty complete statement on the position of twelve
Delegations given on pages 7 and 8 of our Working Paper. Other
Delegations, notably India, lebanon, Chile and China, have
indicated their position today, and I think the Brazilian
Delegation has referred to its position at the last meeting.
I would, therefore suggest that we pass on to the next
item of our Agenda, and that we leave over, for the time being.
Dr. Holloway's suggestion that we set up a Drafting Committee.
The drafting of the Final Act should not take very long: it
could be drafted, I think, by a sub-Committee or by the Tariff
Negotiations Working Party in the course of one or two meetings,
and as for the Protocol bringing in the provisional application,
that would no doubt follow very much along the lines of the
Article XXXII; so I would suggest that we conclude this general
discussion under these heads before we consider what steps
we should take as to submitting further drafts for the
consideration of the Committee, If that is agreed, I would
like to suggest we take Item 5 on our Agenda.
M. Pierre FORTHOMME (Belgium): Mr. Chairman , I would like
to ask whether it would be possiblr for me to come back later
40
V E/PC/T/TAC/PV/5
on to this question, as to whether the General Agreement should
be signed before putting it into force provisionally or not?
CHAIRMAN: Certainly.
Mr. J.P.D. JOH1SEN (New Zealand): Mr. Chairman, as will be
noted from paragraph 4(b)(ii), New Zealand is one of those
countries that is unable to apply the Agreement even provisionally
until ratified by parliament. It appears probable that if
publication is not going to take place until 17th - 20th November,
parliament may not be sitting at that time, and we would be
unable to give effect to the Agreement till possibly three or
four months later.
I would just like to be clear whether the provision it is
proposed to make for signature of the Protoccl for provisional
application would require iature by a country like New Zealand.
It would seem that when we are in a position to apply the
Agreement we could sign it finally.
CHAIRMAN: I think the question raised by the Delegate of
New Zealand is related to the question as to what countries would or
not
would/be considered "key" countries for the purpose of provisional
application. I think that that is a question we can refer and
pick up later. It is difficult for me to give a reply to the
Delegate of New Zealand.
Mr. J. MELANDER (Norway): Mr. Chairman, we are in almost
exactly the same position as New Zealand as regards the
provisional application of the Agreement. Neither the Tariff part
nor the Charter part can be put into force, oven provisionally,
until accepted by Parliament. We feel that to have one month
41
v E/PC /T/ TAC/PV/5
after the end of the Havena Conference, as the final date within
which to sign and put provisionally into force the Charter and the
'General Agreement as a whole, would perhaps be too short notice.
We would prefer two months.
CHAIRMAN: There being no further comments, I suggest that
we now take up Item 5, which is Inclusion in the Agreement of the
Articles of the Charter which are reproduced in Part II.
Members of the Committee will find on page 9 of Document W/301 that
the Delegations of the United States, Netherlands and Belgium
stated that they consider Part II to be an essential part of the
General Agreement. The Norwegian Delegation proposed that Part II
be deleted.. The Australian Delegation proposes in document
W/277 that Article XXII (equivalent to Article 38 in the Charter)
be transferred from Part III to Part II.
The Secretariat pointed out that the decision on whether
Part II should remain in the General Agreement is closely
related to Item No.6, which deals with the effect of the Charter
on the Agreement.upon the entry into force of the Charter.
I think it would be useful if we could now have a general
discussion on Item 5. No doubt Delegates will feel it necessary
to also touch upon I tem 6 when.discussing the questions raised
on Item 5.
H.E. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, we
share the opinion of those Delegations which thought that the
second Part should be entirely deleted, As it should enter into
force only about April or June 1948, that is, after the Havana
Conference, we see no necessity for having Part II in the Tariff
Agreement .
42
V 43 E/PC/T/TAC/PV/5
CHAIRMAN: Does any Member of tho Committee wish to speak
on that point?
Dr. H.C. COOMBS (Australia): Mr. Chairman, we have given
a good deal of thought to this question. It has always been
our view that the logical way of approaching this question of
tariff negotiations would have been for it to have succeeded
the acceptance of the Charter. We recognize that that has not
been practicable, and indeed, for some reasons, it was not even
desirable: there were certain advantages to be gained from
tackling the problem of the Tariffs simultaneously with the
working out of the Charter itself. But we have got to
recognize that that does carry certain difficulties with it:
that we are, so to speak, operating part of the contemplated,
Charter before we have actually got a Charter to work on.
We have accepted, the position that the conclusion of an
Agreement in which tariff consessions are exchanged can precede
the conclusion of the discussions and agreement about the
content of the Charter itself. We are prepared to wait until
after the World Conference to know what the content of the
Charter is going to be. We are prepared for the tariff
reductions negotiated to be operated while those discussions
are going on, both as evidence of the real results being
produced from this process of negotiation, and as evidence of
our determination to operate not merely a Charter but a
General Agreement covering tariffs. But we cannot. see why it
is necessary for us to anticipate the results of the World
Conference by the incorporation in the Agreement on a provisional
basis., subject to existing legislation and other provisos,
things which look like a substantial part of the Charter.
V E/PC/T/TAC/PV/5
It seems to us that there is real danger - in fact, there
are several dangers - in such a procedure. First of all, as
has already been pointed out, whatever reservations we may make
about the nature of our acceptance of those clauses, there is
no doubt that the fact that we had. agreed to them in the General
Agreement and had attached our signatures to them and were
operating them provisionally, would be regarded as evidence that
they were acceptable to us in the Charter itself, and tosome
extent, therefore, our freedom of action would, in fact,be
limited: at least, there would be a tendency for it to be
limited in fact, however clear of obligations we were in theory.
Another difficulty is that there would be danger of
misunderstanding by other countries that we were in effect
deciding upon a significant part of the Charter iln advance.
The thing that worries me most of all is the implication
which is carried by the inclusion of those Articles in the
General Agreement that it is not necessary to have a "Charter.
We have pointed out all the way through that the obligations
in various parts of the Charter are inter-dependent, and that
our capacity to accept the obligations in Chapter V at$
dependent upon the acceptance of obligations in other parts of
the Charter, particular in the Chapters dealing with Industrial
Development, Employment and stability for Primary Production.
Those are the necessary requisites of acceptance of these
obligations. Once we have accepted. those obligations, however,
in a General Agreement, there does appear to be a danger that
the urge to complete a Charter will be very much reduced, and,
quite frankly, we feel concerned at the pressure to include these
things in the General Agreement as, so to speak, evidence of the
desire to insure themselves on the part of certain other countries.
V
44 E/PC/T/TAC/PV/5
Furthermore, if you assume, as I think it may be necessary to
assume, that there will be some countries in which Chapter V will,
so to speak, be popular and other parts of the Charter unpopular,
then the acceptance of the General Agreement with Chapter V in it
gives those countries a definite incentive to reject the Charter,
because they have got a General Agreement with all the things in it
which they like, and why should they then accept a Charter which has
an addition to those things a lot of things that they do not like?
We think we can get an objective consideration of the Charter
as a whole only if we some to the consideration of it as a whole
and without prior commitments about any of its parts, so that from
that point of view it seems to us preferable, from an honest and
Objective consideration of what the Charter ought to be, to think
of it without prior commitments in the form of an Agreement which
incorporates only part of it.
It has been suggested that certain parts of this Charter must
be incorporated in the Agreement in order to protect the tariff
concessions negotiated. I have thought that over with very great
care, because that would appear to me to be a legitimate reason
for including General Articles in the Agreement. If it were
necessary, in the short time during which this Agreement will operate
provisionally, to incorporate specific Articles for the protection
of those concessions, we would be prepared to agree that they should
go in, but two things stick in our minds - the first is that the
period is short, and the second is that the countries know that a
Charter embodying provisions of this kind are going to be on the map
next year.
We came to these tariff negotiations after a period of many
months, during which it was .perfectly well know that tariff
45 E/PC/T/TAC/PV/5
negotiations were going to be conducted in Geneva, and it was
provisionally and without commitments of this sort agreed in London
that it would be undesirable for countries to alter their tariffs,
or in other ways to change their attitudes, in order to strengthen
their bargaining position. Now, on the whole, with certain
exceptions, we believe that that was honestly observed by the countries
concerned. We did trust one another to come to these negotiations
after a delay of six or nine months without having done anything in
the meantime to strengthen our bargaining position for those
negotiations,
Now here what we are asking one another to do is to promise,
for. a period of a few months, during which we work out the details
of an agreement or agreements about commercial policy, as well as
other matters which we incorporate in the Charter, not to chisel
away the concessions which we have granted to other people by devious
means. Mr. Chairman, I do not believe it is necessary to have
anything in this Agreement beyond, first of all, and undertaking to
grant to the countries concerned the concessions embodied in the
Schedules; secondly, an undertaking not to nullify or impair those
concessions by indirect means.; thirdly, an undertaking to listen
to a complaint and consult if any other contracting country thinks
that you have nullified or impaired a concession. Now, if we have
an Agreement of that sort, we have operating from the outset tariff
reduction which it is our prime purpose to achieve here.
Without undertaking commitments before the broad discussions
which will take place at the World Conference, we do not appear to
be trying to push other countries into accepting something which we
have not had time to have a look at. Furthermore, we are not called
upon to accept a part of the Charter without having all particulars
46
J. E/PC/T/TAC/PV/5
in front of as.
It is. going to be exceedingly difficult for delegations to
convince their Governemtns that one particular part of the Charter,
taken by itself, is a satisfactory deal for them. The different
parts of the Charter have a different appearance to different
countries. Some of us will be bound to put emphasis on the
advantages which we are expected to derive from the employment
provisions or industrial development provisions, others will need to
put the emphasis on the negative advantates,on the diceipline which
countries are proposing to accept in relation to their commercial
policy, but those are parts of the Chapter, and if we take part of
it out now then it is likely to be difficult to get acceptance for.
it. Furthermore, it will make the rest of the Charter, when it
comes into force after final acceptance next year, an unbalanced
document because either what is good or what is bad from your point
of view will have been taken out and incorporated in the General
Agreement.
Now, Mr. Chairman, we, as I say, have given this a great deal
of thought and we still feel absolutely unconvinced of the necessity
for the incorporation of Part II. Our approach to the General
Agreement should be this that we all agree that we should include
the tariff Schedules, What else it ought to include I believe is
up to those people Who want to Include it, that is, we start with
the tariffs and the Tariff Schedules, and if anybody wants anything
else put in, I believe the onus of proof as to the necessity for its
incorporation lies in the country which wants it - and all I can say
is that we are, from. a point of honour, prepared to be convinced,
but I do not think it is going to be easy.
CHAIRMAN: Dr. Holloway.
47
J. J .
Dr. J.E HOLLOWAY (South Africa): Mr. Chairman, or, this
subject of the inclusion of .Part II in the Agreement, These seem to
be at least four different lines of thought. The first is that
Part II substantially as drafted, with possible minor modifications,
is an essential part of the General Agreement; the second is that
no part of the text of the General Agreement should, be included
until after Havana; the third is that the portions of the text now
proposed should' be agreed, but after Havana, any changes made.there
should automatically replace the present text; the fourth is that
we should include and lay down certain rules for the replacement of
Havana ammendments.
Now, before going into details on any. of those suggestions it
seems to me that, except for the point that Dr. Coombs has just
made and assuming that that point is not upheld, there may be a
possibility of selving this problem without going into any of these
alternatives. Dr. Coombs has, if I understood him correctly, just
appealed to everybody not to make what looks like a miniature
Charter, Of course, if that view prevails and ee have only the
Tariff Schedules, then all other points fall away anyway. It does
not seem to me likely that it will prevail, that is why I go on to
second point.
The difficultiess which have been foreseen here by various
Delegations may be difficulties which may be fairly easily side-
Stepped, on the -lines that Dr. Augenthaler has just indicated . if
we can divide up the subject into two parts - I do not know that
the/point has been sufficiently clearly brouglt out that the
Agreement for provisional application is an entirely separate thing,
with entirely separate Members. It has got some of the same
material, but it is of no concern, subject to Dr. Coombs' point, to J. 49 E/PC/T/TAC/PV/5
other Members. At present, we have the names of six countries
listed which indicate that they can enter into a provisional
Agreement. Those countries are entirely in their right to, enter
into an Agreement if they see fit and. if they can agree in terms,
and if those countries foresee no difficulties in accepting certain
texts now put into their Agreement, which is the provisional
Agreement. If all of them can come together on that point, then it
seems to me that we can leave it to these countries to say what they
are going to put into the General agreement, in this treaty which is
a treaty between those six countries.
Then welcome to the point that Dr. Augethaler has maches, it seems
to me that the Agreement which one would hope is an Agreement between
seventeen countries, is an Agreement which is not going to be made
in any case until after Havana, because there are too many of us
whose constitutional machined is such that we cannot get the stuff
through before several months after Havana. E/PC/T/TAC/PV/5
Now, why not face the fact then, if it is the case, as I
think it is the case, that a sufficiently large number of countries
will not be able to implement the General Agreement to hake it
acceptable, that you will not get the 85% or whatever percentage
is necessary, that you might as well put off the drafting of what
you are going to put into the General Agreement until after Havana,
That leaves the problem of any difficulties arising from putting
in a text now to the six countries which are now constitusionally
in a position to enter into that Agreement. The issue is narrowed
down to those countries, and it seems to me those countries ought
first of all to examine whether they can enter into an Agreement
of that kind and, if they can enter into an Agreement of that
kind, then we can perfectly safely leave that question to them,
and leave the text of the General Agreement, as far as the seventeen
others and any others that may come in in the meantime are concerned,
until after the Havana Conference.
I suggest that, Mr. Chairman, as a way of sorting out the
problem. It may not work. It may be that even among the six
countries there are one or two that cannot do it; but three of
the six have already indicated that they want this Part II
put into the Agreement; if the remaining three also say they want
it put into the Agreement, then it is a matter for them to fix that
up, and we can follow in good time.
CHAIRMAN: The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, as Delegates will
have observed from our paper, we are of the opinion that Part II
of this draft ought not to be part of this. Agreement; in other
words, the Agreement ought to be a multilateral tariff agreement
only. That, I think, is our starting point,
I do not want to hold up the time, of the members here by
P
50 SI 51E/PC/T/TAC/PV/5
going into all the reasons for this standpoint. I will, at this
stage, only say that I agree substantially with what the Delegate
of Australia said Just now,
What has been said by the Delegate of South Africa is to my
mind also interesting. It is the same starting point: that we
have agreed now to introduce a Tariff Agreement; those countries
which feel they can include additional provisions in such an
Agreement are of course fully entitled to do so. I think that is
a suggestion which certainly merits consideration.
CHAIRMAN: It is now six o'clock and I propose that we
adjourn the-discussion now and resume tomorrow at 2.30 p.m.
The Delegate of Czechoslovakia.
H.E. Z.AUGENTHALER (Czechoslovakia): Mr. Chairman, may I beg
to make a suggestion which may help us in our further work: it would
be if the Executive Secretary might send to all Delegations a kind
of questionnaire and ask them to answer certain precise questions.
I would suggest the following questions: that each Delegation
should answer if its Delegation is ready to accept the provisions
of Part III then, if this Delegation can sign the Tariff Agreement
already here, or in which form: then, if not, if the Delegation
can put the Tariff reductions into force and, if the Delegation is
ready to put the Tariff reductions into force, in which form,
CHAIRMAN: With regard to the suggestion of the Czechoslovakian
Delegate, I have to point out that, in regard to his first point as
to whether or not the Delegations are ready to accept Part II, that
is the purpose of the discussion which are are having now: we have
come to that item on our Agenda.
With regard to the other points which he has set forth in
his proposed questionnaire, I think they have already been covered.
We have circulated Delegations and we have obtained pretty complete 52/PC/T/TAC/PV/5
answers covering those points, Certain of that information
is given in the paper which we have before us. So I do not
think we would really be fulfilling a very useful purpose in
sending out a further questionnaire, but if it is the wish
of the Committee that we should adopt that suggestion, I an
sure we should be very glad to do so.
I should like to know if any other members of the
Committee support the suggest ion of the Czecho slovakian Delegate.
Dr. Speekenbrink.
Dr. A. B. SPEKENBHINK (NeTNERLANDS) Mr.. Chairman, I
have a different suggestion to make. I think we might say that
a number of countries who are, let me say, key countries, and
are also members of the Tariff Negotiations Working Party, have
made a draft and put that before this Committee. Now,on the
othbr side, we have Dr. Coombs, who has given much thought to
this problem and who has been supported by a few other Delegates
about a different approach to this problem.
So it might be useful if we could get an alternative
draft by the hand of Dr. Coombs, assisted maybe by a few
other countries, just giving us his idea of the Ceneral
Agreement together with the Protocol that should be attached
to it, also in the light of the discussions of today and the
proposals he made earlier in regard to the time-schedle.,
Then we should have two different lines of approach, and
I think that might be useful for our further discussions and
serve our purpose' much better than a new questionnaire.
CHAIRMAN: I would like to make an alternative suggestion
which I think might meet the point of view of both the
Czechoslovak Delegate and the Netherlands Delegate; and would
not involve us in being perhaps side-tracked ih furtjer
documents:-
P
52 P 53 E/PC/T/TAC/PV/5
Let us first of all finish this general discussion. We will
then ask the Secretariat to prepare a document summarising the
points which have been brought out in this general discussion,
After we have considered that, we can then decide what further
steps we should take with a view to furthering the work of getting
agreement on a text for the General Agreement,
Is that agreed?
M. PIERRE BARADUC (France) (Interpretation): Mr. Chairman,
I am rather afraid that a general discussion will get us nowhere.
Mr. R. J. SHACKLE (United Kingdom). Mr. Chairman, I would like
to support your proposal in that we really do need to hear the views
of Various Delegations before we can do any useful paper work.
Mr. Winthrop BROWN (U.S.A.) I agree.
CHAIRMAN; Any objections?
The Delegate of the Lebanon.
Mr. Moussa MOBARAK (Lebanon) (Interpretation): Dr. Chairman, I
have a suggestion to make which might expedite our work. I think
the difference at present is between those who are in favour of the
Agreement as it stands and those who are in favour of deleting
Part II. I think it would be necessary to consult the Committee
to know what is the sense of the majority, and then we could revert
to the suggestion made by the Delegate of Czechoslovakia, supported,
I believe, by the Delegate of Belgium, for simply signing a Protocol
which would not be binding; and, instead of devoting one or two
further sessions to a general discussion, which, as the French
for
Delegate said, would prove fruitless, you might simply ask/those in
favour of retaining Part II and those against it. P 54 E/PO/T/TAC/PV/5
CHAIRMAN: The Delegate of Belgium.
M. Pierre FORTHOMME. (Belgium): Mr. Chairman, after four
months of Geneva I feel like a sleep-walker, but I feel certain
that I did not support anything today, nor last time.
CHAIRMAN: I think it is necessary that we should permit the
general discussion to continue. Three Delegations have already
expressed their point of view on the subject of whether or not
Part II should be included, and I do not think it would be fair
to the other Delegates if we did. not give them the same opportunity.
Therefore I propose that we continue this discussion tomorrow
at 2.30 and, after having had general discussion, we can come to
a decision.
The Meeting is adjourned.
(The Meeting rose, 6.10 p.m.) |
GATT Library | hn171gh5417 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. First Meeting held on Thursday, 10 April 1947 at 3 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, April 10, 1947 | United Nations. Economic and Social Council | 10/04/1947 | official documents | E/PC/T/PV2/1 and E/PC/T/PV2/1-3/CORR.1 | https://exhibits.stanford.edu/gatt/catalog/hn171gh5417 | hn171gh5417_90260187.xml | GATT_155 | 8,420 | 52,485 | A.I.
UNITED NATIONS NATIONS UNIES E/PC/T/PV2/1
ECONOMIC CONSEIL
AND ECONOMIQUE
SOCIAL COUNCIL ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE
OF THE UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
FIRST MEETING
HELD ON THURSDAY, 10th APRIL, 1947
AT 3P.M. IN THE PALAIS DES NATIONS, GENEVA.
Mr. DAVID OWEN, ASSISTANT SECRETARY-GENERAL (TEMPORARY CHAIRMAN)
(NOTE: The Verbatim Roports of the six meetings of the
FTirst Session of the Committee held in London from
.5th October 1946 to 4,th November 1946 wil ~be o und in
ocu.mensSE- /PC/T/PV1.-6)
RBA'2IM REPORT~~
:'
. j~~~~~~~~~~~~~~~~~~~~~~~~~ E/PC/T/PV 2/1
C
TEMPORARY CHAIRMAN:
Ladies and gentlemen, it has been the dear wich of the Secretary-
General of the United Nations to come to Geneva to open this, the
Second Session of the Preparatory Committee of the Conference on
International Trade and Employment, and he has asked me to explain
to you that only his preoccupation with certain new and heavy political
tasks at make Success prevented him from coming here today. He has,
therefore, detailed to me the responsibility and privilege of opening
this meeting. It would be difficult to over-estimate the importance
of the task before this Session of the Preparatory Committee. It is
one of the most important to be undertaken by the United Nations in
any field. The world has suffered, and is suffering tragically as
the consequence of war, poverty and economic disorder, and it is the
major task of the United Nations to dominate the as yet uncontrolled
forces which have produced these evils, through the machinery of
international co-operation.
After the defeat of the enemies of democracy in the first world
war, a brave effort was made to deal with the economic ills which were
bedivilling the progress of mankind, through the machinery of the old
League of Nations, in whose magnificent buildings - now the European
Offices of the United Nations - we meet today.
This effert failed, not to any important extent through the
fault of the devoted band of able international civil servants who
.serve. the League, but because of a collective failure of imagination
and. will on the part of the governmnts. concened:. Faiure! to
establish an orderly system of internatinal; economic intercourse
auming at fall employment an. the expansion of trade throughout the
worl3 played its part in the dnterioration of the political situation
which led to the second world catastrophe through which the world has
-"passd. within a single generation.
c... .
,.
B. 2.
l
. At incalculable cost the enemies of democracy have been
defeated for a second time, and we are now presented with another
chance to come to grips with the forces which dispose men's minds
to violent solutions. We must not fail again.
As a consequence of the war, and in spite of its devastation
from which many countries are recovering only slowly, the industrial
potential of most nations has been developed out of all normal
measure. Figures of productivity for a number of the states here
represented show greatly encouraging increases over pre-war levels.
If anything, nations have become more dependent upon one another
as a consequence of this increased productivity. In this new
situation a world trading system consisting of mainly self-contained
units could only lead to chaos - chaos such as we have never known
in the economic field. What could nations do with their greatly
increased production were they not able to exchange it for the
excess wealth of their neighbours? This potential abundance can
contribute to an improvement in the welfare of all, or can result
in bulging pockets of wealth in an otherwise impoverished world.
Surely it is only in a system of freely flowing trade that the
greatest prosperity of the greatest number can be obtained.
Cynical views abound and there is much legitimate cause for
disheartenment in the world as we see it about us, but I am
confident that this work which we began in London and continued
in New York will not fail, if only because it cannot afford to
fail. Each government here represented is, naturally enough,
desirous of obtaining the best possible bargain in furtherance of
its own legitimate interests. This is natural and desirable.
However, I say to Delegates tnat whenever they reach a point when
they feel that the balance of benefits and concessions is against
them and they feel they cannot accept such an arrangement, I say
to them that they must visualize their countries' trading and
general economic situation in the absence of agreement here at Geneva.
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! X~~~~~~~~~~~~~~~~~~~~~~~~~~~~: B. 4 E/PC/T/PV2/1
Let them think of the great depression of nearly twenty years ago.
Let them think of a mass of unemployed. Let them think of the
consequent poverty to the citizens of their country. Let them
think of quotas, of exchange restrictions, of desperate
subsidization, of rising tariff barriers and of wheat and coffee
being burned because the world trade machinery had so broken
down that willing markets could not absorb these foodstuffs. And
having visualized such a situation, let them study again whatever
~~~~~~~~~~j.
prebee3 are busotting them mnd let thea then decide whether a
small c-ncssion at Geneva is not wvll worth their share of an
ezrln i.gado zdi treae.
Thu naternadeor.l Traet Organisation; the Charter of which
eou wiilebo consldaring here, will be the first specialized agency
acte lly 'o b.- set Uup ebyNthe nitd 1ationso in che ecnomio field:
and it wItlptake ius nlaee wurh therfoci iatoenationel economic
agcncies ahriahyhad _le.d, been established - the International
aaibour Orn,neation,athb Food cnd egOriaulturion g nisatta, the
InternationalRBcok fruc-eO nst-litiel pne Dev].oomcnt and the
iatoinaeionel MonktaryeFund - whonmthe Econocic and Sooial Council
came into exisWence. Ve are therefore in an important sense
testing the ntrength aid effectivenesn of the United Nations in
the economic field. The measure of success reached in the
setting up of the intetnationalarrade Orgonizatiol will in 2arge
measure -e . .,t se oef the-Luccss the United Nations can hope
to dbtain to-lay el .hat fi6Ld,
i t
Ievmust be uVldewh toaael 4io /that tt.iCha-.e. Lhe 'hrtr
efnahi Iatvr-,deonrgaTisatiO,;.e h.-on, uven as at present
drafted, represqns ea uni-e..,xperimcnt in that it aims to bring
wipreh asi comfn nenvedwnrld tremifg syst;M economies of all
types, ranging elom entir;,y free enterprise countries to those
wmich have roved warts r to'.rd.a state trading. This is, indeed,
omoe ofmtoe ast iapert>nt aspecCs ofethe Ghartcr. The Charter
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.
_
.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~i B.5 E/PC/T/PV2/1
must provide a framework within which the trade of any nation,
whatever its economic structure or political ideology, may be
improved through the many benefits which membership in the
Organisation will offer.
Apart from the fact that this meeting will play an important
part in determining the course of the United Nations in matters
economic, it may well be that our political future will be
affected by what happens here. Political frictions too often
flow from difficulties in trade relationships. It is a platitude
and yet true to say that unrest and trouble breed in empty stomachs.
Prosperous and contented peoples are not notorious for their
aggressiveness to their neighbours. It is when a people can do
little worse that it casts covetous eyes beyond its frontiers and
dreams of conquest. Real economic prosperity for all nations
and I stress all nations - is, an essential prerequisite of that
peace we have been pursuing so ardently and at such frightful
cost for many years. It is evident that we are met here in
Geneva for a new stage of a great adventure whose goal is the
banishment of property and insecurity throughout the world.
You have come here entrusted with a delicate and important
mission by your respective governments and by the Community of
Nations. May you all return home bearing the fruits of your
labours in the successful accomplishment of your mission. And I
hope you will keep before you throughout the objective which can
only be attained through this meeting: world economic cohesion
and co-operation as opposed to the chaos and disintegration that
would follow were you to fail.
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1 4~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ E/PC/T/PV.2/1
TEMPORARY CHAIRMAN: I would like to ask Mr. Moderow, the chief
of the European Office of the United Nations here in Geneva
to say one word of welcome to the delegates.
MR. MODEROW: I wish to welcome you, ladies and gentlemen, as
head of the United Nations establishment in Geneva, which since
yesterday according to a decision of the Secretary-General has
been called the European Office of the United Nations.
This is a great moment for our office. For the first
time we are servicing this building for an important conference
held under the auspices of the Secretariat of the United Nations.
As you know, the basic Geneva establishment is very limited for
the purpose of this conference, and for other meetings which will be
held simultaneously or consecutively it has been temporarily
expanded. It was a hard job for me, for my assistants and for
the staff of this office, and it had to be partly improvised.
There may arise some shortcomings for which I apologise in
advance. I hope you will have full comprehension for the fact
that this is the first experience on a large scale for the United
Nations administration in Geneva. Criticism is welcome and I
assure you it will be conscientiously enquired into and remedy as
far as possible provided. This building has good traditions of
administrative efficiency and technical achievement and we hope
gradually to attain the same standards. I was very happy to be
able to put at the disposal of the delegations 130 rooms, in
spite of the fact that simultaneously some other meetings will
take place here, and I hope you will be comfortable in your
offices.
There is another aspect to every confer;nces the hotel
accommodation. Not oallcf you ladies and gentlemen may be entirely
satisfied with the accommodation provided. I should like however,
to draw your attention to a special difficulty with arises in
-6-
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~~~~~~~~ I '0 E/PC/T/PV.2/I
Geneva with regard to hotel accommodation. Apart from many
other factors, it is, I believe, for the first time in the
history of this not very big city that it has to offer hospitality
simultaneously to several international conferences of which two
at least are very important. Also in this matter the services
of the United Nations are at your disposal, and I can assure you
that every effort will be made to meet as far as possible the
wishes of the members of the delegations.
-7-
.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. E/PC/T/PV2/1.
Before calling for nominations for the chairmanship of the Second
Session, I would like to ask Mr. Moderow, the Chief of the European
Office of the United Nations here in Geneva, to say one word of
welcome to the delegates.
Mr. Moderow: I wish to welcome you, Ladies and Gentlemen, as head
of the United Nations Establishment in Geneva which, since yester-
day, according to a decision of the Secretary General, has been
called the European Office of the United Nations. This is a
great moment for our office. Fur the first time we are servicing
in this building an important conference held under the auspices
of the Secretariat of the United Nations. As you know, the basic
Geneva Establishment is very limited. For the purpose of this
conference, and other meetings which will be held simultaneously
or consecutively, it has been temporarily expanded. It was a
hard job for me, for my assistants and for the staff of this
office and it had to be partly improvised. There may arise
some shortcomings for which I apologise in advance. I hope you
will have full comprehension for the fact that this is the first
experience on a large scale for the United Nations Administration
in Geneva. Criticism is welcome and 1 assure you it will be
conscienciously enquired into and remedies as far as possible
provided. This building has good traditions of administrative
efficiency and technical achievement and we hope gradually to
attain the same standards. I was vary happy to be able to
put at the disposal of the Delegations 130 rooms , in spite of
the fact that simultaneously some other meetings will take place
here, and I hope you will be comfortable in your offices. There
is another aspect to every conference - the hotel accommodation.
Not all of you, ladies and gentlemen may be entirely satisfied with
the accommodation provided. I should like, however, to drew your
attention to the special difficulties which arise in Geneva with
1
Dl E/PC/T/PV2/1
regard to hotel accommodations. Apart from any other fixtures, it
is, I believe, for the first time in the history of this not very
big city that it has to give hospitality simultaneously to several
international conferences, of which two at least are very important.
Also in this Mecca the services of the United Nations are at your
disposal and I can assure you that every effort will be made to
meet, as far as possible, the wishes of the members of the Dele-
gations concerned.
MR. DAVID OWEN (Temporary Chairman): It is now my privilege to call
for nominations for the office of Chairman of the Second Session.
MR. CLAIR WILCOX (UNITED STATES): The Preparatory Committee
for an International Conference on Trade and Employment appears to
have come of age. We have moved out of the sombre light and the
intimacy of London's Church House into the vast spaces and the
brilliant sunshine of the outer world. Perhaps this may be
symbolic of the magnitude of the task which we now have before us.
Accordingly, the Chairmanship of the Second Meeting of the Committee
will require an unusual combination of knowledge and wisdom,
decision and firmness, fairness and tact and, above all, a pervading
sense of humour. Fortunately, there is one man who is known to all
of us to possess these qualities in ample measure. It is the hope
of the United States, in which I am sure that we are joined by the
other members of this Committee, that the distinguished member of
the BelgianeDolegation who presided over the first meeting of the
Committee with such dignity and grace will consent to resume the
chair for its Second Meeting, so that Geneva may move as smoothly
as did London towards its appointed go.l, I count it an honour to
present to this meeting the name of M. Max Suetens.
.r, DAVID OW EN(Temporary Chairman): M. Max Suetens has been proposed:
any support for this nomination?
-9-
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X~~~~~~~~~~~~~~~~~~~~
D2 E/PC/TPV2/1
M. ANDRE PHILIP (France) (interpreted): The French Delegation is
happy to second the suggestion which has been made by the United
States Delegation and to ask that the Chairmanship of the Assembly
should be given to the Belgian Delegate, Mr. Max Suetens. We have
already had the privilege of having him in the chair of the
Preparatory Committee in London and all those who took part in the
London meetings have had an opportunity to admire the authority and
clearheadedness and the tact with which he presided over our
sessions, at a time when he came back from the long session when
he had difficult problems to deal with. The French Delegation
feel that, judging from the experience already acquired, M. Max
Suetens is the best Chairman we could possibly have had this
session.
MR. DAVID OWEN (Temporary Chairman): Do any other Delegations wish
to speak on this subject or are there any other nominations? (after
a pause). It is my very great pleasure in these circumstances
to put the name of M. Max Suetens to this meeting as the nominated
chairman of the Second Session of the Preparatory Committee. Will
those who are in favour of this motion, please signify, (after a
pause). I hereby declare M. Max Suetens as the Chairman of this
meeting by acclamation and unanimity.
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CHAIRMAN: Ladies and Gentlemen I would like to thank you most
sincerely for the honour which you have done me and my country
in re-electing me to the Chairmanship of the Preparatory
Commission.
It is with joy, .although with some confusion,
that I take the Chair to-day, It is with joy because I f ind
here again so many friends of whose valour and qualities I
personally know and whose perfect spirit of co-operation which
they bring to our work I so deeply appreciate; with confusion
also because I find in front of me imposing delegations presided
by ministers-that circumstance itself gives me great satisfaction.
If some of the countries here represented have delegated their
ministers, their well-known ministers and most appreciated
ministers, it is because they all have a conscience of the
importance of the work which we are about to undertake and all
want to co--operate to our common work.
Gentlemen, it is more than five months since we have
seen our farewell in London and in between, the work which
we started in London has been studied in different countries
and has been confirmed with the necessities of internal policies.
I believe that we can all be perfectly satisfied with results.
The concord and agreement which have come to us from many quarters
tends to prove that there exists in the world faith in the
work which we are about to undertake. One would have thought
even that the victory of the republican party in theUnited
States could have brought about some scepticism, but on the
contrary, the elections have demonstrated how much, as always
- 11 -
f'~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~' E/PC/T/PV. 2/1
the Americans have a sense of the greatness o their own
country of their continent and the world. I would like
to insist on the word "always", because this permanent aspect
is most important as far as commercial policies are concerned
which impose themselves to all the variations of the parties
since the last but one war as it has been so perfectly
understood. We clearly understand now that the Delegations
of the United States is not representing the policy of one
party, but is representing here, really the policies of the
nation itself. We have had in that respect the declarations
made by Mr. Clayton, and those which President Truman made at
Waco on March 6th last.
The second witness is given by Australia. It is
with great joy that they, with an astute parliament, have with
a large majoirty voted to adhere to the agreements of Bretton
Woods, which implies that Australia definitely accepts to
participate in a policy of wide co-operation, economic and
internations
A third testimonial given by the FAQ is the very
interesting report which the Preparatory Commission on the
World Food proposals as submitted at a conference which took
place between 28th October, 1946 and 24th January 1947, and
full support has been given to the articles of the Charter
which relate to inter-governmental agreement on basic products.
This approbation shows all the value of the work which has been
done in London by our Food Committees. We must underline
that in conformity with a resolution passed in London at the end
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E/PC/T/PV. 2/1
of our third session study groups working along principles
which have been put forward by the same chapter or charter
have been created for wool and for rubber. No doubt, we
find next to those signs which ares so full of promises other
signs which are less full of promises, but we can have a
certainty that we are on the right road and that we have only
to continue our way. In that respect I am particularly happy
to congratulate the drafting committee, and more particularly
its Chairman Mr. Colban for the work which it his done in
New York. The report of this Committee has unhappily come
to us a little late, but it is a most important contribution
and will permit us to talk again of the discussions on those
contreversial questions, or questions which have not yet been
solved but very carefully discussed.
I am perfectly sure that you will join with me in
thanking the Swiss Government and the Canton of Geneva for
the hospitality which they afford to us. Many of us who
have participated in the work of the League of Nations know
Geneva. They will tell you how delightful a spot it is to
live in, right on the border of the Lake of Geneva.
Switzerland is not represented among us, but we all
know the interest which the country gives to our work - interests
which is so clearly shown by the articles published by the
different papers.
Now, Gentlemen, I have only to wish you God speed on
our work. Be assured that I will try to give all my good
will and all the work which you might expect from me as I
discharge my duties as Chairman.
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I do not wish to end my little speech without
thanking my English speaking friends for the kind things they
have said of me, and without saying how glad I am to be with
them again. We meet in a spirit of co-operation and good
will and I feel sure we shall be able to create a solid and
enduring world.
CHAIRMAN: The next item on our Agenda is the election
of two Vice-Presidents. You may recall that according to Article 7
of the Rules of Procedure of this provisional Organisation, the
Conference has to find two Vice-Presidents. Several delegations
have felt, however, that this was not sufficient, and the whole
problem is being considered by the appropriate authorities at
present. We have not yet had time to do it finally, and I propose
myself to make further suggestions to this meeting at a later time.
However, if in the meantime any delegation have any suggestion to
make, they may approach Mr. Wyndham.
CHAIRMAN - And the next item is the adoption of the provisional Agenda
which is set out on EPC 35. May I take it that the provisional Agenda
is adopted? The Agenda calls for discussion and approval of amendments
to rules and procedure. These amendments will be submitted to the
meeting by the Executive Secretary.
MR. WYNDHAM-WHYTE: Mr. Chairman, the rules of procedure as adopted
at the first session of the Committee are set out on page 45 and the
following pages of the Report of the First Session, and in outlining
the amendments which are being proposed by the Secretariat I shall refer
to that document. The first amendment refers to Rule 7 and follows
from the statement you have already made about the number of Vice-
Chairmen, and it is the suggestion of the Secretariat that Rule 7 be
amended to read as follows. At the commencement of each Session the
Preparatory Committee shall elect from its representatives a Chairman
and such-number of Vice-Chairman as it deems necessary for the
efficient discharge of its responsibilities. The Chairman and Vice-
Chairmen shall hold office until the end of the Session at which
they are elected. - 14 -
~~~ F -1 E/PC/T/PV2/1
CHAIRMAN - Are there any observations concerning this Amendment?
Adopted.
Mr. WYNDHAM WHITE ( EXECUTIVE SECRETARY) - The
second substantial amendment, Mr. Chairman, which the Secretariat
propose is in Rule 46 on Page 46 of the Report. That rule deals
with the consultation by the Committee with certain non-Governmental
agencies, and there are set out in that Article as it stands at
present the names of four non-Governmental Agencies which at the
time of the first session of the Preparatory Committee were the only
non-Governmental agencies which had what has come to be known as
Category (a) status, that is to say within the category of non-
Governmental organisations regarding which the Economic and Social
Council have laid down certain regulations for its consultation with
them. Since the date when the present rule was adopted at the
First Session the Category (a) has been enlarged, and there are a
number of other non-Governmental organisations included in that
category. Therefore to take account of that change of circumstances
it is proposed that Rule 46 should be amended to read that the
Committees of the Preparatory Committee may consult with non-Govern-
mental organizations in Category (a) either directly or through
Committees established f r the purpose. In other, words, there is
substituted for the four organisations named specifically the
general description "Non-Governmental organisations in Category (a)".
CHAIRMAN - Are there any observations concerning this
Amen dment ?
Approved.
MR.WYNDHAM WHITE (EXECUTIVE SECRETARY) - The last amendment
which we have to suggest, Mr. Chairman, is of an entirely formal
character and relates to Rule 43 on Page 46, which provides for the
issue of a Journal to the Preparatory Committee. It is not
Proposed at this Session to issue a Journal, and the purpose of
15 F - 2
E/PC/T/PV/2/1
the Journal in providing information to delegations about the
meetings and arrangements for the Second Session will be fulfilled
by the issue of daily notices, but not in the form of a Journal.
It is therefore proposed that Rule 43 be deleted.
CHAIRMAN - Are there any observations concerning these
deletions?
Adopted.
CHAIRMAN - The next item on the Agenda is the presentation
of the Report of the Drafting Committee. I invite Mr. Colban, the
President of this Committee, to come to the rostrum.
Mr. ERIK COLBAN (NORWAY)
Mr. President, Gentlemen, the Report of the Interim Drafting
Committee has been distributed to the Governments and I take it
that it has come into the hands of all the delegates here. You
will remember that we decided in London that the terms of
reference to the interim Drafting Committee should be to go through
the result of the work achieved in London with the view of trying
to get the texts as clear and straightened as possible. At the
same time trying to draft in some what more detailed form the
taper which should incorporate the results of the negotiations on
custom policy. We have got in accordance with these terms of
reference, and I hope that the Report of the Interim Drafting
Committee may prove helpful. The London Report was necessarily
in an unfinished form because the work itself had not been
finished in London, and even the Report of the Interim Drafting
Committee may give the impression that it is very far from being
finished. You have all the articles of the Draft - notes,
observations and results - but I beg you not to over-emphasise the
importance of all these exceptions. I can assure you that a
16d;~~~~~~~~ F - 3
E/PC/T/PV2/1.
Technical Committee as Interim Drafting Committee was not in a
position to enter upon any fundamental political discussions, and
we have had to take the material resulting from the London
Conference without trying to bring new political considerations
to bear upon it. But my own view is that if this Conference can
work with the same spirit of co-operation as the Interim Drafting
Committee we cannot fail. I owe the most sincere thanks and votes
of appreciation to all my colleagues in the Interim Drafting
Committee - everyone of them worked with the purpose of achieving
agreement. Even those who fought for separate lines of action did
it so as to put their reasons as clearly as possible before their
colleagues, thereby giving them an opportunity of seeing what could
be in favour of their spirit of...
We have thrashed it out and when you find in the Report of
the interim Drafting Committee certain problems which we have left
unsettled and even presented you with a number of alternative
observations, that does not mean that these problems are insoluble;
it simply means that in New York, where we had to get through the
work before the end of February, we could not get any further. But
I feel personally that in continuing the expert work of New York on
a political level here in Geneva, we shall solve most of our problems
and even with a number of reservations go on with the Draft Charter
to the General Conference, I would not consider that at all as a sign
of weakness or defeat. There are a number of problems which may
be solved in different ways, and if we put alternatives to the world
I cannot believe that the world consciousness of the importance of
the task before then should not enable them to agree. I said that
the Report of the Interim Committee is in your hands, but it is
not yet in the hands of the public. We discussed it in New York,
and I said to the Drafting Committee that only some few weeks separat
17
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E/PC/T/PV/2/1.
us from Geneva. It is much better not to publish it under our
own authority. We leave that to the Preparatory Committee itself.
The important thing is that it would be helpful if we could get
public opinion directed to our work by putting this Report in their
through the hands and with the reservations I have allowed myself
to make I trust that public opinion represented through the Press
will ot over-emphasise the differences of opinion they find in the
Report but much more emphasise the very high degree of common
agreement on the different problems. I beg to suggest, Mr. Chairman,
that you propose to the Assembly the publication of the Report
of the Interim Drafting Committee.
18~~~~~~~~~~~~~~~~~~~~~~~~ E/PC/T/PV2/1
TEMPORARY CHAIRMAN: Anyone wish to speak on the Report?
I call upon Sir Stafford Cripps.
SIR STAFFORD CRIPPS: Mr. Chairman, since we last met in London
in the autumn I have no doubt that a great deal of work has
been done by every member country on the great task that lies
ahead of us. But I would like in particular to refer to the
work of the Interim Drafting Committee which was set up at the
close of the First Session in order to carry further the
preparation of the proposed Charter for an international trading
organisation, which on the basis of an extremely useful draft
got out by the United States of America had been formulated in
London. It was inevitable, I think, that our last Session,
strikingly successful though it was--successful, I venture to
say, beyond the hopes and expectations of many who were there,--
should have left for further consideration some of the more
technical Articles without which the Charter would be incomplete,
and that there should also be a large number of passages of
which the drafting was inadequate or on which there had not
been a full definition of conflicting views.
The Committee met in New York on the 20th of January and
finished its work on the 25th of February. The Delegations
were small and consisted of highly qualified experts and I think
that all of us who have studied their report will agree that it
is a most valuable contribution to our great enterprise. It
will, I confidently predict, very greatly ease our burdens
when we come to consider once more the draft Charter and the
very wide field which it is to cover. We were all clearly
fortunate in our choice of representatives on this Committee,
but above all we can congratulate ourselves on the Chairman, to
whom all those present at New York would agree that a very
considerable share of the credit for the Committee's success is due.
-19- E/PC/T/PV2/1
I refer to Mr. Colban, whom we are very glad to see again here as
the leader of the Norwegian Delegation. To him and to the
Vice-Chairman, Mr. Adarkar of India, we owe a great debt and I
would suggest that we should place on record here and now cur
sense of obligation to Mr. Colban, to his Deputy, to.all the
members of the Drafting Committee and to their Secretary, Mr. Lacarte
and his staff. I would also, Mr. Chairman, like to second the
proposal of Mr. Colban that this document should be published,
because the United Kingdom Delegation believes that nothing but
good can come from such publication.
CHAIRMAN: Ladies and gentlemen, I am sure that the whole Committee
will want to join Sir Stafford Cripps in the praise which he has
paid to the Drafting Committee, and, more particularly, to its
Chairman, Mr. Colban. I for my part would like to join my own
congratulations to those presented by Sir Stafford Cripps.
Does anyone want to speak on the Report of Mr. Ambassador Colban?
The only thing we have now to decide is, following the proposal
by Mr. Colban, is there any objection to publishing the Report?
The proposal is therefore adopted.
Point 4 of the Agenda is a general discussion of the scope of
the work of the Second Session. I expect, and I sincerely hope,
that most of the Headsof the Delegations will wish to express their
opinion of the present state of our work. A certain number of
Delegations have expressed their wish to speak-in order: Australia,
Belgium, Brazil, Canada, South Africa, New Zealand. I am now
going td call on the different Delegations to ask them whether
they are prepared to speak now or tomorrow morning. ...I gladly
call the Delegate for Australia to the rostrum.
DELEGATE FOR AUSTRALIA (DR. H.C. COOMBS):-
Mr. Chairman, before we begin our work in this Session, it would,
I believe, be fruitful for us to look back on the results of our
labours in the First Session. That Session produced real achieve-
-20-
~~~~~~ I G. 3 E/PC/T/PV2/1
ments which were due, I believe, to the fact that certain basic
principles underlay the Committee's approach to its problems. I
think it is worth while to review briefly those principles, since
the success of our work here may well depend upon their application
to the problems which we now face.
The first of these principles was the recognition that high
levels of employment and of effective demand do much to determine
the volume of world trade. The theory and practice of domestic
economic policy was revolutionized in the years which followed the
Depression by the recognition of the dominant role of effective
demand. It was long, however, before the effects of this
revolution were felt in the consideration of the problems of
international trade. Indeed, historically it may well prove to
be the major achievement of the Preparatory Committee that it
brought this about.
The second basic principle was the recognition that economies
at different stages of developments with widely varying problems
and organized according to different political philosophies,cannot
follow uniform economic policies, and that consequently rules
governing international trade must be flexible if the legitimate
needs of national economic policies are to be met.
Thirdly, it was recognized that many trade barriers are
erected not as ants of ill-will, but as the means to achieve
legitimate purposes or to protect domestic economic welfare from
real dangers.
-21- E/PC/T/PV. 2/1
DR. COOMBES: (Australian Delegate): This is not to say that the
barriers are necessarily the best means of achieving purposes
or that the fears of dangers they are designed to meet are not
exaggerated or indeed that the history of commercial policy does
not abound with the examples of exaggeration and extravagance.
It means that an integral part of the task of reducing trade
barriers is to provide positive aid in achieving the legitimate
national purposes by means less inimical to the interest of
other nations and that we must be prepared at times to wait while
fears are quietened by the results of co-operation. In other
words there was brought to the task of the London conference of
this Committee an understanding, a tolerance and a humanity which
had resulted in a Charter which despite its interventions provides
in my opinion a wiser and more workable basis for the conduct of
international trade and any basis which has been proposed before.
The present session wills I hope, approach its problems
in the same way. There are two main tasks. First to review the
earlier work on the Charter and to examine some of its difficult
problems which were left over from the first session. Secondly,
to seek in negotiation a reduction of those restrictions embodied
in tariffs and preferences. One problem to my mind stands out
in relation to the Charter. When the world conference meets we
shall have represented there countries who vary from the point of
view of their state of development and their system of economic
organization even more widely than those represented here. It
is important that the Charter should be such that all countries
of good will can accept it and the organization which it proposes
to set up such that all countries of good will can, with
advantage, become members. In the negotiations about tariffs and
- 22 -
.
1~~~~~~~~~~~~~~~~~~~~~~~ E/PC/T/PV.2/1
preferences we are faced with a practical problem in which it
would be very easy for the general principles underlying our
achievements in the first session to be lost in an atmosphere of
hard bargaining. However, from some points of view the time is
auspicious. In the world generallythere is no problem of
effected demand. Indeed those of us who have advocated for
full employment so passionately are in danger of being embarrassed
by the fullness with which our prayers have been answered.
Indeed if I was not so overwhelmed by the magnificence of my
surroundings I should, I think, be reminded of the Scottish parson
who prayed for rain. The following day it rained and it went on
raining and it rained for weeks, until finally the parson took up
the matter again and he prayed thus: "Lord, it is true we prayed
for rain, but this is ridiculous." At any rate, whatever the
difficulties with which this state of excessive employment may
confront the peoples and governments of the world, it does mean
that demand in the field of international trade is now at a high
level. The problem is not to find markets in which to sell goods
but to find the goods to meet urgent needs. We can, therefore,
now if we will, see tariffs and preferences in their right
perspective. An effective demand is at such high levels that the
influence of tariffs and preferences on the flow of trade is small
indeed, affecting the direction and composition of trade rather
than its volume. This should mean that both those seeking
reductions in other peoples' tariffs and those defending their
own will be less likely to exaggerate the importance of the
particular tariff rates over which they are bargaining. This
would be the more so of course if countries could be confident
of the persistance of these conditions of high effective demand,
- 23 - E/PC/T/PV. 2/1
There are two possible approaches to negotiations avowedly on
a mutually advantageous basis. The first is to interpret
advantage in a strictly national sense. To assess on the
positive side of the balance sheet only those benefits which
accrue directly to increase national trade.
The second, and I believe the wiserapproach, will seek
to take into account the role which the tariff plays in the
economy of the country negotiating. To assess the purposes
which it is designed to achieve and the fears which it is
designed to quiet. It will be prepared to see in the achievement
of those purposes and the quieting of the fears advantages from
which other countries too can, and will, benefit. In other
words if we can apply to the problem of tariff and preference
negotiations the same principles of understanding, of tolerance and
of humanity which ensures the achievement of the first session.
If we choose the first approach there is real danger and we shall
look back upon the structure we are labouring to build and find
that however impressive its facade it too, like so many attempts
of this kind in the past, is at best an empty sham. On the
other hand if oecchoose the second we can make one step further
in the task of showing what the people of the world are desparately
anxious to believe that nations can work together for common ends.
The Australian government approaches the problems of
this conference with a real sense of urgency and an awareness that
the Australian people have an abi.C.ng faith in the future of
international co-operation and it is my privilege to assure you
that the Australian delegation will, at this conference, do its
utmost to embody that faith in the word of this conference.
- 24 -
I , d J.1
E/PC/T/PV.2/1
BARON VAN DER STRATEN-WAILLET ( Belgian Delegate): The economic
union existing between Belgium and Luxembourg has, from the out-
set given its full support to the world Charter of Trade and to
the creation of an international Trade Organisation. They have
consistently followed the work acheived by this Organisation,
and are willing today, as they were before, to give it full sup-
port. All members of the preparatory commission have played a
part, and a useful part I dare say, in what has been achieved
until now, but there is one country, I believe, to which parti-
cular tribute must be payed from this rostrum. I wish to refer
to the United States of America. The American nation is conscious
of its responsibilities which is plays in the economic fields It
has supported the efforts which the United States government
has consistently developed for the development of exchanges between
states and the reinforcement of economic and international solidarity.
The two traditional political parties in the United States, the
Republic and the Democratic, have shown today a wish and a will to
co-operate with the other countries which is the best evidence for
the final success of our undertaking. I wish to associate myself
fully with what has been said from this rostrum by our President
and by Sir Stafford Cripps concerning the work of the Interim
Drafting Committee which has met in New York earlier this year.
The Draft Charter has been altered by the changes which have been
introduced in this document by the Interim Drafting Committee. The
new articles have been drafted in a very fitting and proper way.
On the other hand, certain changes which have been suggested in
the text shall certainly call at a later stage for some
-25-
AM J.2
E/PC/T/PV.2/1
observations on our part. However, I should like right now to
mention one technical gap which is particularly regrettable for
the French-speaking delegation. I feel that it is regrettable
that a French version of the Draft Charter should not have been
circulated to members of this Conference at the same time as the
English text was being sent out.
Belgium, gentlemen, is traditionally a country of economic
freedom. The commercial policy which we have pursued since the
end of the war is the evidence of what I have just said. The
Belgian government has opened its doors as widely as possible to
imports. The goods which are not an object of international
rationing enter Belgium in such quantities as to satisfy financial
demand. During the first quarter of 1946 the monthly average of
imports was 2,802,600,000 Belgian francs. At the end of the same
year 1946, the monthly average had jumped to 6,322,000,000, in
other words an increase of 125%. At the'beginning it prove.
necessary to submit trade in Belgium to control by the means of
licenses, but this system was applied very moderately. Import
licenses were granted so liberally that very soon imports
exceeded actual needs of the domestic markets. In 1946 only half
of the licenses were established by the proper agency of the
Belgian government and were actually used for imports. Furthermore
restrictive controls were gradually deleted for numerous goods.
For these goods all the importer is required to do is to make a
~declaration which amounts to compldte fre(Zom .. tra e -More-than
half of the imported goods are those which were imported to 1946,
were imported under the system of the simple declaration. In
other words complete freedom. The increase in the amount of
imports has continued at the same rate for goods submittee co licpnoe
and for free goods. Experience has shown that the fact of liberating
- 26 - E/PC/T/PV/2/1
certain items from the necessity of obtaining an import license
does not in any way effect imports. Evolution remains constant
without any appreciable variations in the quantities imported in
prices. The actual incentive which regulates the amounts of
imports is the effective demand. In any field where discrimination
between the category of goods might have brought about unemployment
Belgium has refrained from introducing it.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
.
: J. 4
E/PC / T/PV. 2/ 1
Many goods are now being imported in quantities
which exceed those which existed before the war. This for
instance applies to wines and liquids to tobacco and cigarettes,
perfumes, furs, knitted goods, electrical appliances, radios,
and so on. We have consequently by our policy contributed
very largely to rebuild international trade in the world.
This liberal policy which we have applied to our imports has
been extended to our export policy equally. We have reduced,
as far as possible all obstacles to the sale abroad of Belgian
goods. Unfortunately, we have been brought to know that a
deletion of administrative restrictions concerning export of
our goods has not had the influence which we were entitled to
expect. In October 1946 goods which were exempted from export
licenses represented thirteen per cent of our total exports;
in December 1946, the percentage had decreased to 11.5, and in
February 1947 it had dropped again to 7.9 per cent. This
experience gives us the impression in Belgium that we are the
only country which is there to engage on the role of suppression
of obstacles to international trade. Most other countries do
not seem to have chosen the course which Belgium has adopted
concerning its foreign trade. Nevertheless, we are determined
to continue on the road which werhave chosen. On April 1st
the Belgium government decided to suppress import licenses for
a great number of goods. Almost a hundred new items on the
customs tariff have become free as a result of this recent
measure. Belgium has shown its faith in international
co-operation in the respect of commerce by still another measure.
In full agreement with its partner in its Tariff Union,
Luxembourg, Belgium has concluded a customs union with the
Netherlands.
- 28 - . 1 ~~~~~~~~~~~~~E/PC/T/PV 2/l
One aspect of this new agreement made between two
good neighbours interests particularly this conference at this
time. I wish to refer to thu common tariff which our two
countries have adopted, a tariff which will serveeas a basis
ffor the negotiations which we intend to conduct at this Geneva
eeeting. We have not Just amalgamated the previously,/axisting
tariffs of our two countries, we have created a new instrument
which shall serve as a basis for our new customs community and
whioh will have a life of its own. Ve have been obliged to
achieve this and to set up a completely new system. In other
words, tc set up an autonomus tariff without-taking into
account the policies which had inspired previously the two
3ountries whose tariff is-now amalgamated.
The order in which goods are listed in this new tariff
established between Belgium and the Netherlands has been based
on the draft list nomenclature of goods which nas been suggested
by the League of Nations in 1937. This.list tends towards an
international unification of terminology used concerning
customs duties. It results in bringing more order and clarity
to the tariff and affords a scientific basis for the necessary
statistics. Almost all the new duties are based on the ad
valorum principle. They have been fAxed at the lowest possible
level compatible with an adequate protection of the vital
economic interests of Belgium, Luxerbc.11re cte Netherlands.
The new customs union will afford two countries which produce
raw materials and fool stuffs one of the L rest existing
markets in the world. Their goods will-enter this new territory
without paying my duties, or paying extremely low duties.
On the othexrknn industrial goods are accessed in such
a manner as to assure our producers a stable national market
without which their undertakings could not live or prosper
- 29 -
I q~~~~~~~ E/PC/T/PV. 2/1
In as much as our purchasing power depends essentially on our
manufacturing and export industry, their prosperity affects
equally the countries which are our suppliers.
The new customs union corresponds to the conditions
set forth by the draft Charter which this meeting will have
to consider at a later stage. The average duties provided
for by the new customs tariff do not exceed any one of the
duties provided for in the previously existing tariffs of
each of the two countries concerned. -
This moderate approach to the prsblem of tariffe
which we have imposed in all freedom and liberty constitutes,
if I maj so, our advanced contributions to the common aim of
this international conference. If new concessions were to be
asked from us we could at most accept this in the spirit of
the draft Charter itself, and concelidations of osrtain of the
tariff- 30 vided for.
I V K - 1
E/PC/T/PV2/1
During the last few years economic nationalism has caused
humanity terrible and useless sufferings. We must now in common
effort put an end to the selfishness in respect of the economic
welfare of the world. We are gathered here in this Geneva
Conference in our attempt to do so. Let us have the courage and
wisdom to proceed boldly in the way which has been proposed to us
by the previous meetings of this international gathering. The
Belgian and Luxembourg Economic Union has no other ambition than
to contribute to the best of its ability to the common aim of this
Conference.
CHAIRMAN - Gentlemen, I suggest now that we adjourn for the
day and that we meet again to-morrow, To-morrow there will be
two plenary public meetings, one in the morning and one in the
afternoon. In the morning at 10.30 we will continue to hear
general declarations. If any delegation wants to speak to-morrow
~~~~~~~~~~~~~~~~~~~
and has not oet given the name if his representative, I will ask
nim kindly to do bo .. soon as possille0
The M.et±ng is adjourneda
.he MsatinE D ' -'30 p.m.
A
S4 , .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ |
GATT Library | cv539cn4518 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. First Meeting of Commission A held on Tuesday, 27 May 1947, at 10.30 a.m., in the Palais des Nations, Geneva | United Nations Economic and Social Council, May 27, 1947 | United Nations. Economic and Social Council | 27/05/1947 | official documents | E/PC/T/A/PV.1 and E/PC/T/A/PV.1-3 | https://exhibits.stanford.edu/gatt/catalog/cv539cn4518 | cv539cn4518_90240057.xml | GATT_155 | 7,628 | 46,097 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV. 1
27 May 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
FIRST MEETING OF COMMISSION A
HELD OIN TUESDAY, 27 MAY 1947, AT 10.30 A.M., IN
THE PALAIS DES NATIONS,
M. MAX SUBTENS
(Chairman)
GENEVA
(Belgium)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247). ER
- 2 - E/PC/T/A/PV.1
CHAIRMAN (Interpretation): The meeting is called to order.
Before starting with the discussion on Chapter IV of the Draft
Charter, I wish to draw your attention to document W.78 of the
23rd May, which is the Second Resort of the Charter Steering
Commit tee. I intend to have the document debated and approved
this afternoon, and we will start the meeting of this afternoon
with the discussion and approval. -3-
S E/PC/T/A/PV/1.
CHAIRMAN (Interpretation): We pass on now to the discussion
of Chapter IV, Economic Development. We shall deal with that
Chapter in exactly the same way as we dealt with Chapter III;
that is to say, we shall endeavour to reach agreement in the
Committee and we shall refer to sub-committees, which will be
appointed at a later date, establishing final drafts reconciling
the various views, and so on.
We will begin with Article 9. I would remind you that the
United States Delegation has proposed two amendments to this
Article; one is a revision of the title and the second is the
addition of a paragraph with regard to capital investments. I
suppose you. have all taken cognisance of these two proposals
and we can now discuss them.
Dr. GUSTAVO GUTIERREZ (Cuba): Mr. Chairman, before
going into discussion of the title of Article 9, the Caban
Delegation desires to bring to the attention of the Committee
certain points relating to the matters concerned in Chapter IV.
We consider this Chapter one of the most important for those
countries not fully developed economically.
As our Chairman made clear in his statement at the
Plenary Session, we consider that this Chapter is unbalanced.
It relates mainly to problems of commerce and customs duties
and leaves very little for the economic development of those
countries which have not achieved a full state of industrialisation.
We consider that the industrialisation of a country which has not
yetv completed its economic development does no harm to the fully
industrialised countries but, on the contrary, is extremely
helpful, in the expansion of their industries as well as in S - 4 - E/PC/T/A/PV/1.
world trade. The only difficulty is the transitional period,
during which the highly industrialized countries have to adjust
their economies. This is clearly stated in the findings in the
publication of the League of Nations entitled: "Industrialisation
and World Trade, 1940", that the development of the less
industrialised countries is the responsibility not only of those
countries but also of the community of nations. This was clearly
stated for the Western Hemisphere at Mexico.
We also feel that, in the circumstances, the obligation of
an undeveloped country should have its counterpart in the co-
operation of the other countries secured by the Charter, and which
will give to the under-developed countries the necessary freedom
of action.
We have found -- we must say, with some regret - a certain
suggestion by the Secretariat, following a resolution by the
Economic and Social Council of the United Nations, as to the
taking out of this Charter the first part of Paragraph 2 of particle
11, where we find some of the very few practical methods outside
of the general economic principle stated without limitation. The
only thing that looks like implementation is taken away and if
that is taken away, in our opinion, nothing remains of Chapter IV.
We are very much in agreement in the main with the proposal
of the United States that gives some implementation, but the
proposal of the United States to start with a modification of an
item of this Chapter is so important to us that we must confess
we have not completed the study of this proposal and therefore
we will not be in a position to express our viewe on it, probably
until tomorrow. Novertheless, we do not want to raise any
obstacle to the discussion of Chapter IV and we are ready to take
part in the discussion of the rest but reserve our point of view
on the first proposal. As I say, we can discuss the rest after
having heard the proposal of Czechoslovakia in relation to the
suggestion of the Economic and Social Council. P.
CHAIRMAN (Interpretation): Does any delegate wish to
speak on the United States amendement? This United States amend-
ment, I repeat, consists in adding a sentence to Article 9 reading
as follows: "They also recognize the importance of private and
public international capital movements, int productive investments
in promoting and facilitating such development."
I will add that this amendment also provides for a change in
the title of Article 9 and in the title of Capter IV itself.
Mr.OLAIR WILCOX (United States): We received this morning,
about half an hour ago, a number of proposed amendments to Chapter
IV none of which we have as yet had an opportunity to read. I
do not know whether other delegations received our proposed amend-
ments at an earlier date, or whethher they have had an opportunity
of reading them. I am prepared to speak on the subject if it is
the desire of the Committee that we go ahead at this time, but before
doing so I should like to know whether the members of the Committee
would like to have a few more hours to read the amendment s which
have been distributed before entering into the discussion.
CHAIRMAN (Interpretation): I would not like, of course, to
answer for the other members of the Commission, but as for myself I
can say that I received all amendments on Saturday, and had full
opportunity of studying them.
I believe, in any case, as regards thn United States amendment
just mentioned, that we can exchange our views on the subject in
general.
E..:.. Z. AUGENTIALER (Czechoslovakia) (Interpretation): Mr.
Chairman, I would ask of the delegte of the United States if the
amendment means that the Organization recommends to countries to
- 5 - - 6 - E/PC/T/A/PV/1 -.
accept loans from abroad or whether it extends even to participation
in industries: I mean, whether there is only the sense that the
foreign countries are offering loans of capital to develohet1l
industries or whether ie mvans participation in the corresponding
industries. In the lattcr oase a country might say: "Well, I am
keen to accept loans to develop my industrial life, but I am not
willing tccaQoept direct participation in the management of my in-
dustries if it would entail acting against the principles of the
Chart"r.' J. -7- E/PC/T/A/PV/
MR. C, WILCOX (United States) Mr. Chairman, if it is the
desire of the Committee, I would make a brief statement on the
amendments that we have suggested in this connection - our suggestions
as to the title of the chapter, and the title of Article 9, and the
inclusion and additional sentence in Article 9, and the suggestions
that we shall make as to possible amendments to Chapter I on
Purposes, and to Chapter VIII on Organization are derivative from
the proposal that we made with respect to Article 12.
The Charter already recognises the problem of foreign
investment in two articles - article 12, pararaph 2, and Article 61,
paragraph (c). I think that there would be a case for the
inclusion of reference to this problem in Article 9, and also in
Chapter I, even. if our suggestions as to the amendment of Article 12
were not adopted or were modified. But it seems to me necessary
to make some sort of a general statement of what we have in mind
here, in order to put our suggestions with respect to the Article
into their total setting.
With respect to the questions asked by the delegate of
Czechoslovakia, I do not believe that there is anything in our
suggestions that would require any aountry to accept any loan, and
as far as the particular provisions of any loan or investment are
concerned, that would be a matter which should be worked out between
the countries involved in connection with the particular loan or
investment, and there is nothing in our suggestions that would
determine the provisions of any specific arrangement, and certainly
there is nothing in our suggestions that would require any country
to accept a foreign investment that required foreign participation
in the management . of the industry concerned.
I might raise some little question about the use of the word
"accept". I am not sure that that does not involve the -8 - E/PC/T/A/PV. 1
implication that the country that receives capital is conferring a
favour upon the country that supplies capital. I would assume
usually in an international capital movement that there should be
mutual advantage for, the two countries concerned.
Now, if I may say something about what we have in mind here,
it would run along this line. We have recognised in our
discussions that there are, in various parts of the world, countries
that are urgently in need. of additional supplies of capital for
their reconstruction and for their industrial development.
That capital can be supplied in three ways. It can be
supplied through international organizations, such as the
International Bank for Reconstruction and Development. The
advantage of this mechanism is that the countries that are able to
supply capital turn it over to an international organization and
the loans that are then made to the countries that receive capital
are internationally administered. We regard that principle as a
sound principle. We think that it has very great advantages.
But I think we all recognize that present needs for capital will go
beyond the capacity of that institution in the immediate future.
A second possible source of capital fund is by government to
government loans, either through direct loans or through
institutions or agencies of governments. There has been a
considerable volume of such loans and it is possible that further
loans of this type will be made in the future, but in this case it
is perfectly clear that the transaction becomes an inter-governmental
transaction; that it therefore requires action by parliaments and
that establishes something of a bottle-neck in the making of such
loans; that it places a limit on the quantity of capital that can
be transferred in that way; that it involves a certain rigidity and
lack of flexibility in individual international capital movements.
The third possible source of capital transferrence, of course,
is by private lending-either loans or direct investments. There is
in existence in the world a large volume of savings which provides
a potential source of capital funds for the reconstruction and
development of the countries that need those funds. E/PC/T/A/PV 1
The advantages of such private investment are:.
(1) Speed. That is, individual arrangements can be
made between lenders and borrowers without requiring the delays
involved in parliamentary action.
A second advantage is flexibility. In general Government to
Government lending deals only in large sums involving large-
undertakings. In the case of private capital transfers, the amount
may vary, from one project to another. Also the terms may vary
from one project to another as to the charges involved, the
maturities and all the other details.
It is possible for borrowers and lenders to make arrangements
which are to their mutual advantage. So you have, I think, in
private capital transfers the advantages of greater speed and
g eater flexibility, and you have, I believe, the possibility of
capital - a large reservoir of private savings for the recon-
tLruction and development of those parts of the world that require
it. I think it is perfectly clear that that flow of private capi-
tal has not been resumed since the war, and that there is no
prospect of its resmiption in the near futur.,
There are many reasons for that which I will not go into.
There is concern on the part of possible lenders concerning
the future economic prospects of potential borrowers and con-
cerning the character of future economic and political relation-
ships.
It is our view that something can be done, and that some-
thing should be done to encourage a renewal of the flow of
private capital; and we believe that can be done without invol-
ving some of the difficulties that may have troubled such inter-
national investments in the historic past.
Certainly we believe that no country would accept - if
we use`lcdcep't - a foreign investment to which terms are
attached that would eo disadvantageous to keep. G.
E/PC/T/A/PV.1
- 10 -
What we have proposed in the Amendments that we have
suggested for this Chapter is, I think, completely consistent
with the provisions that are already in the document, in the
form in which it emerged from the meetings in London and
New York. We do propose in the statements of purpose giving
recognition to this problem as a problem related to that of econo-
mic development, and as one of the purposes of the Organisation,
We had a rather lengthy discussion in London about the
question of whether there should be an economic development
commission. We arrived at no decision on that question, because
we referred it to the Economic and Social Council since it
involved the question of jurisdiction of the International Trade
Organisation in relation to other international organisation.
On that point we have now had a reply from the Economic and
Social Council. We believe that if the scope of the function of
a Fourth Commission could be large enough to include the problem
both of development and investment which we regard-as closely
related, that such a Commission should be established, and we
propose that this Commission be charged with the function that
was assigned to the Organisation in Article 61 (c) of the present
Draft with respect to the preparation of mutual conventions or
agreements, Articles and so forth, to be recommended to Member
Governments.
One other important suggestion that we make in this
connection appears in Article 12, paragraph 2. What we have
done is to look at this problem of private capital movements and
ask ourselves not what are the maximum rules and principles that
ought to be laid down and recognized, but what is the minimum
that is necessary; and what we have proposed here is to make
explicit in paragraph 2 of Article 12 what was perhaps implicit
in the existing Draft with respect to abstensions from unreason-
able treatment of specific foreign enterprise , having made
international investments; and our suggestions there are redu-
ced to three principles:
(1) National treatment. That, however, is qualified by
the provision that exceptions may be made to national treatment G.
E/PC/T/A/PV. 1
- 11 -
by the unilateral decision of a country involved, and the only
requirement is that public noticed be given as to the exceptions,
(2) Most-Favoured-Nation treatment, without qualification.
(a) Adequate, effective and prompt compensation when invest-
ments are taken over by the State.
Our proposals do not go beyond that. There are many
other problems involved in international investment. Our suggest-
ion would be merely that these questions be left for the Develop-
ment and Investment Commission to work out and to recommend to
Member Governments for their later consideration. We do think
that the minimum that a private investor in another country would
require before he would consider making an investment is:
(1) That he know the terms on which that investment was to
be made and the treatment that he was to get;
(2) That he be treated no less favourably than a private
investor in another country is treated in dealing with a third
country; and
(3) That if his property is taken away from him, he will be
paid for it. - 12 - E/PC/T/A/PV. I
-12-
Now we have the later suggestion in our proposed third draft
2(a) which is novel, and it is the suggestion that a country which
desires to receive private foreign investments may voluntarily
file with the Organization a unilateral statement as to the
conditions which it will accord to such investments. It may put
in that statement anything that it pleases and the Organization
would have no authority whatsoever to dictate or even to suggest
what terms should be written in to the statement. It would be
purely voluntary, it would be purely at the option of the country
involved. The statement also could be modified at any time by
a unilateral decision or could be withdrawn entirely. The only
requirement would be that countries would continue to accord to
investments made during the period when their voluntary statement
was in effect, the treatment which they said that they would
accord to such investments. Now, I say that it is a novel
suggestion. We think it not to be unreasonable because it
involves no compulsion to file and no compulsion as to the
contents of the filing, and no compulsion as the modification or
withdrawal. The whole thing is put in the form of voluntary
action. Now, those are the provisions of the various amendments
that we suggested that relate to the question of international
investment, in its relation to the problem of development.
I have spoken at this length in order to indicate the
relationship of these various provisions to one another because
that explains the purpose of the suggestions that we have made
concerning Article 9. I do not think that that can be reviewed
in isolation from the paragraph of our proposal as a whole. We
have, in connection with this, made some other minor suggestions
concerning textual amendments to which I-shall not refer at the
present time. - 13 -
M. L.GOTZEN (Netherlands): Mr. Chairman, the Netherlands
delegation is of the opinion that the proposals made by the delega-
tion of the United States of America for the amplification or the
Charter by the insertion of some paragraphs concerning foreign
investments are of great importance and a very valuable counterpart
of those Articles dealing with economic development. In con-
sequence the Netherlands delegation is quite willing to give its
support to these amendments although on some minor points we may
probably want to suggest some additions or alterations. Thank you.
Mr. L.D. MARTINS (Brazil) (Interpretation): Mr. Chairman,
I wish to add to the statement just made by the delegate of the
United States that the Brazilian Delegation also conceives the
problem of the development of not completely developed nations as
inseparable from the means to achieve such development, and I wish
to remind you in this connection that in London it was the Brazilian
delegation which explained the close relation between these two
points. We presented at the time an amendment with regard to move-
ments of capital, in the reciprocal interest of the country receiv-
ing such capital and the country giving it. We explained also
that this influx of capital could be made in three different ways.
We shall have in due course to present three amendments to the
United States amendment to Article 12, but with regard to Article 9
we wish to insist on the fact that in no case should Chapter IV be
made less favourable to the under-developed nations, because this
Chapter has been inserted in the Charter precisely in favour of
those nations and should not apply more to the highly developed
countries.
E/PC/T/A/PV/1
P. p. E/PC/T/A/PV/1
-14-
M. ANGEL FAIVOVICH (Chile) (Interpretation): For the
Delegation of Chile, Chapter IV constitutes one of the most important
chapters of the Charter which we are at present engaged in studying.
It is obvious that if this Chapter does not determine the conorete
means to achieve the development of small countries, and which those
countries need, a large part of our future action will be jeopardised.
For this reason the delegation of Chile accepts in principle the
United States proposal as constituting a concrete step towards the
ideal which we are pursuing, which is to realise the economic develop-
ment of the small countries yet insufficiently developed.
Having said this and having given my agreement in principle, I
reserve my right to present such alterations or comments at a later
date as I may deem necessary; but we wish that Chapter IV shall
achieve in the interest of the needy countries their very urgent
needs in development. - 15 -
D.R. P.S. LOKANATHAN (India): Mr. Chairman, may I at this
stage move, on behalf of the Indian delegation, a short adjournment
of this meeting to consider this very vital issue. It is said
that the amendments were before us on Saturday, but the delegations
as a whole have had no opportunity of consultation and defining
their attitude with regard to this.
It is not a question of our examining the merits of the various
amendments put forward by the United States delegation. I think
that on the substance of most of them we may be in agreement, but
the larger question remains as to whether we should at this stage
and in this Chapter bring in those features which were not theta
before.
The question of foreign capital is engaging the attention of
the government of India, and if we are to consider this very vital
issue at the present tine, we may not be able to take any position
at all without reference to the government of India. Apart from
this there are also other reasons.
I wonder whether it would be possible for this meting to stand
adjourned at least until tomorrow, for instance, so that in the
meanwhile we may consider whether it is desirable to bring the
question of international investment into this Chapter. I am not
for one moment suggesting that the question of international
investment is irrelavant to this Chapter - certainly not. Nor do
I suggest that some of the details proposed by the United States
delegation are unworthy of acceptance, but. I am more concerned with
the larger question as to whether the structure and face of this
Chapter would not alter if we are going to have a new set of ideas,
and in any case we are not in a position to define clearly our
attitude and we would. very much appreciate a short adjournment of
this meeting.
E/PC/T/A/PV.1
J . 1
J.
CHAIRMAN: The delegate for Belgium.
M. J. JUSSIANT (Belgium) (Interpretation): The Belgium
delegation wishes to join itself to the delegations who have just
supported the United States amendment, which consists in adding a
sentence at the and of Article 9 and in altering the title of this
Article and of Chapter IV.
We shall not discuss at present certain deletions of parts of
sentences of this Article, which may be studied at a later date,
but we consider that the United Stated amendment raised a very
important point without charging the substance of the Article, but
at the same time it improved the Article considerably, and it
improved this Article because the balance established in this
article in favour of a country nut completely developed is increased
in favour of this country. -17 -
The economic development dealt with in Article 4 can be
achieved in different ways. First of all by the national efforts
of a country concerned, and there is a French proverb, which is
a very important French proverb, which says, "Help yourself and
Heaven will help you"; but this national development necessitates
a very large effort which may at times surpass the possibilities
of a country concerned. All efforts in those countries are then
tending towards the one aim of improving the economic development
and it may be necessary for that country to adopt restrictive
measures to effect a single improvement.
These restrictive measures we precisely want to avoid. That
is why we come to a second way of developing a country, which is
by means of external help or participation, which is beneficial
to all parties concerned; because, of course, it is no effort
to the country granting the help, because there is through that
help a large expansion in their trade and international relations
in general with the country thus assisted.
Capital investments obviously provoke an expansion of the
commodities and. goods, and of trade relations and at a later
date, an increase in the possibility of a country thus helped. in
participating in international trade. But the external assistance
or participation of the countries which are not. sufficiently
developed is not sufficiently precise in Chapter 4 as it stands,
because we might by reading the provisions of the Chapter ask
ourselves whether such help or assistance could not be limited
purely and simply to the sending of a few technical experts.
Well, the Delegate of the United States has very well shown
the very important part which private investments can make in
development, and in answer to the Delegate of Brazil, I would say
that this Amendment would certainly not be less advantageous to
E/PC/T/A/PV/1 E/PC/T/A/PV/1
- 18 -
the small countries, but will enable them to make their develop-
ment within a general framework instead of within a narrow frame-
work, and for these reasons I repeat we support whole-heartedly
the U.S. Amendment.
CHAIRMAN: The Delegate of Australia.
Mr. McCARTHY (Australia): Mr, Chairman, the Australian
Delegation generally supports the proposals made by the United
States, and follows and recognises and accepts the exposition
of the reasons put forward by Mr. Wilcox. We recognise that
in any schemes of development, particularly in countries in the
early stage of development, the import of capital is always
highly important, and is one of the outstanding means of bringing
about development. We also recognise that where countries want
to import capital for developmental purposes, they have to secure
the co-operation and the goodwill of the lenders; and the lenders-
are, of course, entitled to all the protection that it is
practicable to give them in an Article such as this. Therefore,
we accept the alteration in the title of Article 12, and in the
expansion of Article 12 in the way proposed by the Delegate of
the United States. In doing that, I think we recognise that we
are giving almost complete support to the United States proposal.
We are in some doubt, however, as to whether the title of
the whole Chapter should be altered. It does seem to us that
the title. "Economic Development" as it is sets out the objectives
of the whole Chapter; and even though investment is an important,
perhaps an outstanding, means to bring about economic development,
it is only a means, as distinct from the objectives. Therefore,
we would prefer that the original or existing title remain.
Perhaps I could say we will not wish to press that, if the
Committee as a whole thinks it desirable, but we do feel rather E/PC/T/A/PV/1
-19 -
more definitely on the inclusion of the last sentence which is
proposed for Article 9: "such attention as we have given to the
detailed proposals"; and I think we should say we are not sure
we follow the whole of the Drafting amendments - we think that
Article 9 should be devoted to a statement of the objections and
left at that, and that the proposals for high-lighting the
importance of investment, and of giving more detailed attention to
the part that it will play, should be confined almost entire ely to
Article 12. It seems rather logical that we should start the
Chapter with a statement of the importance, and then a reference to
the domestic resources; and. if it would help by bringing Article
12 next as a fully developed Article on the subject of the means,
and in doing so bring out investments, we would agree to that.
So to sum up, Mr. Chairman, we would give as our view that
we are in accord with the principles, that we agree with the
alteration in the title and the expansion of Article 12, which is
the most important Article from the viewpoint of the changes
suggested; we would prefer the title to stay where it is, but
we will not press the for it; but we would urge that Article 9 be
left as it is, or at least it be included without the last sentence
as suggested by the American Amendment. ER
- 20 - E/PC/T/A/PV/1
Mr. J.T. CHWANG (China): Mr. Chairman, the delegation of
China Support, in principle, the amendment brought forward by the
delegation of the United States, which is very important, of
course, to this Chapter IV. Nevertheless, the Chinese delegation
would like to make a small amendment to theirs. As a matter of
fact the world is not quite recovered from the war damages, and
the economic situation of the whole world is not yet quite
settled, therefore, a premature action may be harmful, particularly
for members who want to arrive at the object of this Charter and
especially for some other countries who want to contribute their
share therein. The economy of each country involves many
elements and therefore it is very complicated and only its own
government can judge best and take the necessary measures to
develop the requirements of the situation. Therefore, some of
the paragraphs made by the delegation of..the United States would
be better changed or modified so that we can make it better for
the undeveloped countries.
M. BARADUC (France) (Interpretation): The French delegation
wishes, first of all, to associate itself with those delegations
who have stressed the importance and interest of the United States
amendment. We consider also, that those amendments bring a
solution to the difficult problem raised by Chapter IV and would
countribete to re-establishing the general equilibrium of the Charter.
We shall, therefore, fully contribute to the necessary alterations to
Chapter IV according to the wishes expressed by the delegate of the
United States. I have, however, some observations to present.
First of all, one detail in drafting. I am in full agreement with
the first amendment to Article 9, that is to say, the insertion E/PC /T/A/PV .1
- 21 -
of the words "for dependent territories", but I am not in agreement
with the French translation of that text, and I would like the
French text to read: "pour les territoires qui en dependent",
which is more in keeping with the sense. As for the last sentence
to be added to Article 9, I would probably agree with the
Australian delegate when he said that that sentence might be better
placed. in Article 12. However, the statements made this morning
by the United States delegate are so important that I would ask
that a verbatim text of the statements be circulated and it might
be even useful to take some part of the statements and embody
them into a special Article, because this matter is so important
not only to the development of countries not yet fully developed,
but also for other countries insofar as it fixes the condition of
public or private financial assistance. I would therefore think
that it might be useful to set up a special drafting Sub-Committee
to examine the drafting of a special Article to be inserted in
Chapter IV, and which would embody certain of the amendments
offered and certain parts of the text of the United States delegate. S -22- E/PC/T/A/PV/1
H.E. Dr. Z. AUGENTHALER (Uzechoslovakia): Mr. Chairman,
Gentlemen, I am greatly obliged to Mr. Wilcox for his interesting
explanation.
Now as we reach the point where we are discussing the
general principles of capital investment, may I be allowed to
make certain observations on the programme as a whole. In the
past we knew three categories of international economic freedom;
there was freedom of movement of goods, of capital and of persons.
The third freedom. I think, disappeared entirely. Now we are
putting the question of freedom of movement of capital on the
same level as the movement of goods. I think there is an
important distinction between movement of capital and goods.
Goods are imported or exported, but if we are dealing with
foreign investments in a country it is nearly the same thing
as if I am giving the right of citizenship to some foreign person.
Now you know well that every country is extremely careful about
according citizenship of its own country to some foreign persons,
and they are mostly bound by certain conditions.
we are sitting here around the table, all of us representing
different countries, but the Charter is not envisaged only for
us: the Charter is envisaged for the whele world. Now, one
day Germany, for instance, may be a Member of the Organisation.
In this event, we should be obliged to accord to German
investments in Czechoslovakia the equality of treatment
accorded to other investors. we had curtain experiences
with German investments and capital participation in Czecho-
slovakia and I should say they were not so innocent of the
catastrophe which happened in Czechoslovakia. - 23 -
S E/PC/T/A/PV/1
There are three different positions for the foreign investor,
as there are in the American amendment. The e is first the
Most-Favoured Nation treatment, that is, equality of treatment
for all, with no distinction. There is a second principle,
that is, each Member shall accord to citizens of other Members
treatment no less favourable than it accords to its own citizens,
That is the second principle, the national principle, but there is
a third principle which accords preferential treatment to
foreign investors, where they are more favoured than their
own citizens. That is in the case of compensation. It may be
that a country accords a more effective compensation to its own
citizens, but perhaps not promptly. It may be for I do not
know how many years, but the foreign investors would have
preferential treatment over their own citizens.
I wanted to make those few remarks just to show you that,
in our opinion, investments cannot be treated in the some way
as movement of goods; that probably they need some special
rules entirely different frame those concerning goods.
CHAIRMAN: (after the above remarks had been interpreted
into French): Dr. Augenthaler, do you wish to say anything
else?
H.E. Dr. Z. AUGENTHALER (Czechoslovakia) replied in French;
no interpretation.
Dr. P.S. LOKANATHAN (India): Mr. Chairman, Judging by
the progress of this debate, it is clear that my motion for
adjournment does not meet with much favour here. If I am
right in that surmise, Mr. Chairman, I should like to say, on
behalf of the Indian Delegation (with whom I have now had a S - 24 - E/PC/T/A/PV/1
chance of consultation), that we would make an appeal to the
United States Delegation not to press this whole series of
amendments at this stage.
We remember that when this Chapter was drafted in London
it became a groat selling point with us in India. We thought
that this Chapter IV was something like a charter for the less
developed countries. Although there were serious limitations
in this Chapter, and it was also somewhat imperfect in many
parts, on the whole the country accepted the principle and the
spirit of this Chapter. - 25 -
Now it is sought to introduce matter which of course in one
sense is relevant but which in our view is somewhat extraneous, and
it is also not necessary in our opinion to set out the terms and
conditions of international investment in this Chapter at this
stage. No-one, for instance, suggests that foreign capital should
be accorded anything but fair and equitable treatment. India's
history bears ample witness to the fact that at no time did India
accord anything but the most generous treatment to- every kind of
foreign capitalist: if therefore we make this appeal, - and I am sorry
I do not have the persuasive manner of Mr. Wilcox - if therefore we
make this appeal to the United States delegate, it is because we
feel that the whole face of this Chapter will undergo complete
alteration, it not disfigurement, and we feel that in India a
Chapter which is going to include all these conditions and treat-
ments of foreign investment will not be accepted, and I think we
will find it is verydifficult indeed to persuade our countrymen to
accept this Chapter in a modified form.
That does not imply that we are at all opposed to considering
the terms and conditions of international investments in different
places and in different contexts. In this Charter there is ample
room for providing for such regulations and terms. 61 (a) already
provides for it, and is intended to provide for it.
If you set up a Development Commission, as we hope will be dons,
one of the major tasks that Development Commission would be pre-
cisely to go into the matters which the amendments of the United
States delegation are intended to coover. And again, it is not as
if the lenders today and the borrowers today are all such innocent,
unsophisticated people. We all know that we cannot get funds unless
we guarantee equitable terms. There is already an International
Bank which lends at Government level, but the funds are coming from
E/PC/T/A/PV/1
P. P. - 26 - E/PC/T/A/PV/1
private capitalists, and therefore it is certain that the Inter-
national Bank would already be at this task of drafting a code and
defining the terms under which capital must flow from one country
to another. Again, a s you all know,. the Economic and Social
Council through its Sub-Commission on Development is engaged in
this very task and, if I know the position correctly, it is already
at it, and a Sub-Commission which is going to be set up very
shortly will have this as one of the important matters in its agenda.
Therefore it isnot as if, merely because we do not accept this
amendment at this stage, borrowing and lending will cease.
Again, it is possible to lay down a general obligation on the
part of the International Trade Organisation in connection with the
provision of financial facilities. That sort of general obligation
could be included in this Chapter. But what I do feel is that
it is not desirable to go into great detail and state all the various
Conditions under which the loans would be given or the terms under
which the borrower can borrow. All this need not be spelt out in
such detail in this Chapter.
And for another reason, too. we have, great difficulty in
accepting this amendment: as I said in the first few remarks that
I made earlier, our country is now considering and examining the
whole question of the terms on which foreign capital should flow to
a country. We are not against private investment as such but we
are very anxious that private investment should not get an economic
hold nor a political hold in the national life and we want to take
proper precautions. These are questions which these delegations
here in Geneva may not be able to come to a decision upon. There-
fore for these various reasons I think it would be much better if
-some more time is g iven and if, when the Commission is set up, it P. - 27- E/PC/T/A/PV/11
goes into the matter more carefully it may have the opportunity of
considering the views of all the countries. The agreement which
has got to be drawn up is already provided for in 61 (c) and
countries which want this amendment will certainly raise the ques-
tion when that agreement is discussed.
Our feeling is that if you alter this Chapter in the form
which the American amendment seeks to do it will be regarded more as
a Charter for the bankers than for the less industrially-developed
countries, and we do not went that that impression shall prevail in
any country or in any undeveloped country.
Mr. Chairman, I am sorry for having to say this, but I do hope
that the delegate from the United States will consider this in the
proper spirit and give sympathetic consideration to the proposal put
forward by the Indian delegation. J.
MR. C. WILCOX (United States): Mr. Chairman, with reference
to the hope expressed by the representative of Brazil that in the
course of the amendment we should not detract from the provisions
in the Charter with respect to development. I should say that we
are in complete agreement. We believe, that proper provisions, with
respect to investment will promote and not detract from the
development programmes, and , as I say, we are in complete agreement
with this point.
With respect to the points raised by the delegate for India,
I shall have to admit that we are bringing this material in at the
Second state of the committee work. We did not introduce it in
London. You will remember, however, that the chapter on economic
developments was written in London, it was brought in at that stage.
The third stage of our international work on this problem, of course,
will come at the time of the world conference when the report of
this committee is presented and considered. We have not waited
until that time to put this problem before you. Furthermore, I
do not believe that we shall need to arrive at decisions on this
matter in great haste, because I assume that we will remain in the
pleasant environment of Geneva for several more days and weeks,
perhaps months. The delegate for India has suggested that the
provisions of our amendments are extraneous to the purpose or the
content of the Charter. I can only point out to him that the
Charter already contains in Article 12, paragraph 2 and in Article
61 paragraph (c) material on this point. He says that this would
cover the problem of foreign investment in great detail, and would
spell out all the terms and conditions of foreign investment. I
submit that that is not the case. We have not undertaken to spell
out all the terms and conditions of foreign investment, andthere
is here no great detail - we have tried to keep our suggestions as
brief and simple as we can. He says that the development of
E/PC/T/A/PV/1
- 28 - - 29 - E/PC/T/A/PV/1
principle with reference to investment would be the task of the
Economic Development Commission, if we set up such a Commission.
If that is the case, I do nut see why we should object to saying
so. He said that even if we do not take action in this area, the
international flow of private capital will not cease. Our concern
is that the international flow of private capital has not started,
and gives no prospect of starting as conditions stand today.
I have listened with a great deal of interest to the comments
made by the various delegates with respect to the amendments that
we have suggested, and I find such a large measure of sympathetic
interest, that I believe it would be inappropriate for me to accede
to the request of the delegate from India that the amendments be
withdrawn. Several delegates have suggested that they support
the amendments we have suggested in principle, but will desire to
suggest changes in detail. With respect to that I would say that
we do not feel that we have said the last word on this subject, but
only the first word, and that we are, of course, willing to
consider suggestions and meet problems and situations as they
appear to other members of the Committee,
With respect to the suggestions of the delegate of Australia
that the problem be treated in Article 12 but omitted from Article 9,
I do not have a strong feeling, and I am extent to leave that to the
sub-committee to decide in view of its judgement as to the Chapter
as a whole. G.
E/PC/T/A/PV/1
- 30 -
CHAIRMAN (Interpretation): We have heard this morning a
very interesting discussion on the United States Amendment, and
most of the Delegations who spoke spoke in favour of this
Amendment. Two Delegations have asked. that the question be
adjourned. One Delegation asked for 24 hours adjournment, and
the Delegate of India asked for a longer adjournment.
I regret to say that I am limited by our time-table, and
that we have only two days for this Chapter IV. I therefore
suggest we resume discussion of this United Statet Amendment
to-morrow afternoon, and we must at last reach a provisional
decision on this Amendment.
This afternoon we shall carry on with the study of other
Amendments on Article 9, and in particular of the United States
Amendment on Article 9 which does not affect the question of
capital investment. Then we shall pass on to Articles 10, 11
and so forth.
I have two further communications - first of all a
Sub-Committee on Chapter III under the Chairmanship a the
Delegate of India will hold a meeting at 5.30 this evening in
Room 210; secondly, the Delegates from Frame and Czechoslovakia
have asked that there w ill be a verbatim edition of Mr. Wilcox's
speech. I wish to inform the Committee that the Secretariat
has just told me that a verbatim record of this meeting,
containing Mr. Wilcox's statement, will be circulated this
evening.
The Meeting is adjourned.
The Meeting rose at 1 o'clock. |
GATT Library | gt827yt4603 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. First Meeting of Commission B held on Thursday, 29 May 1947, at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, May 29, 1947 | United Nations. Economic and Social Council | 29/05/1947 | official documents | E/PC/T/B/PV/1 and E/PC/T/B/PV/1-3 | https://exhibits.stanford.edu/gatt/catalog/gt827yt4603 | gt827yt4603_90250064.xml | GATT_155 | 8,209 | 49,421 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/B/PV/1
29 May 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
FIRST MEETING OF COMMISSION B
HELD ON THURSDAY, 29 MAY 1947, AT 10.30 A.M. IN
THE PALAIS DES NATIONS , GENEVA
Hon. L.D. WILGRESS
(Chairman)
(Canada)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office.
Room 220 (Tel. 2247). E/PC/T/B/PV/1
M. Max SUETTENS (Chairman of the Preparatory Committee)
(Interpretation): The Meeting is called to order.
Before commencing the work of Committee B, I should like to
inform all Delegations that tomorrow morning at 10.30 we shall have
an Executive Session, for the examination of a Report which has been
circulated under the reference E/PC/T/70 and which contains recommen-
dations of the Working Party on Tariff Negotiations. I will ask
every Delegate to inform their respective Delegations.
After that, we shall meet as Committee A.
Gentlemen, as Chairman of the Preparatory Committee, I declare
open the first meeting of Committee B, which is responsible for the
examination of Chapters VI and VII of the Draft Charter.
In the use of my powers as Chairman, I have appointed, with
his agreement, Mr. Wilgress, First Delegate of Canada, Ambassador
and Vice-Chairman of the Preparatory Committee, as your Chairman.
I can assure you that he will prove an excellent Chairman and I wiaL
you good work and Good luck. I will ask Mr. Wilpress to come to
the Chair.
The Chair was then taken by
The Hon. L.D. Wilpress (Canada)
CHAIRMAN, Mr. Suettens, fellow Delegates, I wish to express my
thanks and appreciation for the honour which has been conferred upon
me and upon my country in being nominated Chairman of this important
Committee, Whilst extremely gratoful for the honour which has thus
been conferred upon me, I am at the same time deeply conscious of
the very heavy responsibility I have assumed in accepting this task. E/PC/T/B1PV/l
CoTrettevwh, vli st it has not as heavy gn Anenda before it as
Conmittee A, still has to deal with some very importand ani diffi-
cult parts of the Draft Charter. It will be necess ry .for me toehav
the co-operation of alembe Mbrs of the Committee and I shall do my
utmost to discharge tfue inctions of Chairman to the best of my
ability.
The first item on our Agenda is the nomination of acVioe-
Chairman of this Committee. I will ask for nominations.
M. LHI1TGES (Belgium) (Interpretation): Mr. Chairman,hIvbase
the honour to nominaMe A. Royer, French Delegate, as Vice-Chairman.
CHAIRMAN : The nomination of M. Royer has been proposed by the
Delegate of Belgiumr Axe there any othnr Nominations?
I take it then that the nomination of M. Royer is unanimous?
(Aeredd)
I will ask M. Royer to take his place on the rostrum. - 4 -
p E/PC/T/B/PV/1
CHAIRMAN: Fellow delegates, we shall follow in Commission
B the same kind of work as has been followed in Commission A, that
is, we shall take up the various items of the draft Chatter which
have been assigned to this Commission and we shall consider the
various points of difference, the reservations which have been made
to the Draft Charter and also the amendments which have been pro-
posed by the various delegations. We shall endeavour to consider
these points of principle and, if any questions arise which are
best suitable for resolution in a sub-committee, the Chairman will
exercise his authority to appoint a sub-committee for the purpose.
Our agenda for today consists of Chapter VI, Articles 39 to
45 inclusive, of the draft Charter, drafted by the Drafting Com-
mittee in New York. The working document for this purpose will
be document E/PC/T/W/132 which has been circulated to delegations
this morning.
Are there any observations on this proposed procedure?
Mr. Chairman,
Mr. G.L. MEHTA: /there is a general question which I desire to
raise on behalf of my delegation arising out of the Exception pro-
vided in the United Kingdom Amendment to Article 45 (Paper
E/PC/T/W/131 of 28th May), since that pertains to the whole chapter
and involves a fundamental issue.
We have been given to understand all along that the assumption
on which not only this Chapter but the Charter as a whole has been
drafted is that services are to be excluded altogether from the scope
of this Charter. It will be recalled that the question was debated
at some length in London where some delegates suggested that the
provisions of this Chapter should he extended to cover services,
while one delegate stated that the Chapter would have no meaning if
the question of restrictive business practices, relating to services
such as shipping, insurance and banking, were excluded. In the P. E/PC/T/B/PV/1
General Comments on Chapter VI of the Drafting Committee's Report,
this position has again been reiterated. It is clear therefore
that services are sought to be cut out of the purview of this Chap-
ter and of this Charter.
But the United Kingdom Amendment as it stands implies that
restrictive business practices pursued by individual enterprise in
regard to services as well as goods would come within the scope of
the Charter while such practices, if pursued under an agreement or
understanding would be exempted as a result of the Exception provided
for whether such agreement or understanding is a private or inter-
governmental one, or concluded under the authority of the United
Nations. In other Words, the Exception in the United Kingdom Amend-
ment implies that certain practices in regard to serviceswould be
included within the scope of the Charter. I would suggest, Sir,
in all humility, that this is not consistent and we have to decide
whether services are to be included or excluded from the scope of
the Charter. It is not logical to say at one stage that services
are to be excluded end then reintroduce an Exception which was origin-
ally provided for in the U.S.A. draft relating to services.
It is also necessary to clarify this point because there is
another Amendment which brings in service and which has been tabled
by the U.S.A.; - Amendment as an addition after Article 15, put as
Article 15A in paper T/W/23. I may point out incidentally that
the term "Transportation" also occurs in Article 15 (Paragraph 3)
where it obviously refers to internal transport service although
external or overseas services are excluded from the scope of the
Charter. I would therefore urge that the commission should clarify
this point before we proceed to examine the various amendments
relating to this Chapter. E/PC/T/B/PV/1
CHAIRMAN: With regard to the point just raised by the
delegate of India, I would draw the attention of the members of the
Commission to the first page of document 132 on which they will note
that a reservation against the exclusion of services mentioned in
the Drafting Committee's Report was made by the delegates for
Brazil, Chile, Cuba and India.
The Czechoslovakian delegation has expressed its adherence to
this reservation. The delegate of Cuba has also expressed himself
in similar terms.
This question gives rise to a question of principle which
affects the whole of Chapter VI, and therefore I think it is a
suitable subject for discussion at the outset of our deliberation.
Therefore, I suggest that the discussion be confined to the question-
of principle, and that the actual text of the United Kingdom
amendment dealing with Article 45 be not discussed until we come to
that particular Article of the Chapter.
I would also wish to remind delegates at this time that we
have only three meetings in which to get through our work. There
had been four meetings scheduled, but it is necessary for
Commission A to meet tomorrow morning, so that if we do not get
through our work tomorrow afternoon, it will be necessary for us to
call a meeting Saturday morning. Therefore, if the members of the
Commission wish to avoid meeting on Saturday morning, it would be
desirable to limit discussion as much is possible, but I shall do
my best to give all members of the Commission ample opportunity to
express their views, but I would urge them to be as brief as
possible.
The discussion is now open on the question of principle
raised by the delegate of India.
The delegate for the United Kingdom. -7-
J. E/PC/T/B/PV/1
MR. S.L. HOLMES (United Kingdom): Mr. Chairman, I feel that
the views of the United Kingdom have been expressed at some length
on previous occasions, and they are probably so well known that I
need not go into them at any length here and now.
The point is, I think, this, and it should be stressed, that we
do not wish to avoid the issue of restrictive business practices
in relation to services, but that we do not feel that Chapter VI of
the Charter is at all a convenient or appropriate way of dealing
with the issue seeing that there other bodies either in the field
or about to be in the field which will be dealing in a comprehensive
way with the various services which have been mentioned. It would
be, in our view, inappropriate and inconvenient to deal with one
aspect only of services in the Charter whereas other aspects of
services, which we would have something to say about ourselves,
were to be taken over later by some other more appropriate or
specialized bodies.
Insofar as the remarks of the Indian delegate are directed to
some possible inadequacy of the United Kingdom proposal in regard
to Article 45, bowing of course to your ruling, I would only say
that we would put that right if necessary when we come to consider
Article 45. I think that an amendment to meet the suggestion of
some inadequacy or illegicality in our proposal would be a very
simple matter.
As regards the remarks of the Indian delegate generally, I can
only say here and now that we must adhere to our position, and that
it would not, in our view, be appropriate to deal with the field of
services in this connection now as has been suggested by certain
other delegations. - 8 -
E/PC/T/B/PV/1
CHAIRMAN: The Delegate of Czechoslovakia.
Mr. MINOVSKY (Czechoslovakia) (Interpretation): A good
many services are absolutely indispensable for a normal develop-
ment of the world economy, and the Charter provides already for
certain services - I am bearing in mind transit, but it is not
possible to exclude others which are of equal importance to
the Charter.
In my opinion it is not necessary to deal with the services
in detail in the Charter; but I believe that the principle must
be adopted that any discrimination between the services is
contrary and in contradiction to the spirit of the Charter itself.
Therefore, Mr. Chairman, in order to be brief, the Czechoslovak
Delegation associates itself fully with the reservation made by
the Delegate of India.
CHAIRMAN: The Delegate of Cuba.
Mr. GUTIERREZ (Cuba): Mr. Chairman, the Cuban Delegation
has no doubt that there is a big gap in the Charter. In a Charter
that is supposed to be directed to the purposes of developing
trade and employment we have had the experience that after
negotiating in relation to, the lowering of customs duties we have
noticed with shipping lines that have raised their freight tates
that they have raised them to such an extent that all the good
intentions of lowering the duties between two countries have been
good. for nothing, and. that we have only been working for the
benefit of the shipping companies.
We are working, again, against the things that make possible
the enlarging of trade; and we are leaving out the question of
Shipping, when shipping in many cases not only under direct control
of the Governments, but of cartels, even of Trusts and Organisations,
is of such a kind that really we are not helped as to the freights
and rates that have to be applied. E/PC/T/B/PV/1
Sometimes their decision as to freights goes over the
decisions of Governments. What is the use of working here for
weeks and months to bring down the customs duties of countries
if afterwards the freights are set in such a form that undue use
can be made of the benefits we intend by our work? The argument
that this is not the proper part of the Charter, or that there
are other institutions that should take care of this matter,
I do not think is very important, because we have an international
union that has been working in relation to customs unions for
many years, and yet more than 40 per cent. of the text of the
Charter is devoted to new regulations of an international character
relating to customs duties.
The Cuban Delegation sympathises very deeply with some of
the phrases used by the Czechoslovak Delegation, and is of the
opinion that some principles relating to services such as
shipping, insurance and banking should be inserted in the Charter,
and that if desirable, something developed through other
international agencies already established ought to be created;
but the Charter, without principles in relation to shipping,
insurance and banking, will never be a complete Draft. - 10 -
V E/PC/T/B/PV/1
CHAIRMAN: The Delegate for Chile.
M. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
we have not yet found a possibility of not working under duress.
I shall not bring forward our arguments against this omission.
Our arguments are the same as those which were brought forward
by the Delegate of Cuba, and the principle has been ably
explained by the Delegate of India.
We must not forget, Mr. Chairman, that there are countries
like our country which are principally exporters, and which in
order to live commercially are compelled to resort to maritime
transport. If such restrictive practices are admitted, this
will be a gap in the Charter; and it will be practically
impossible to fulfil other obligations which derive from the
Charter if this gap exists - a gap which would throw a shadow
on these obligations.
CHAIRMAN: The Delegate of Australia.
Mr. E. McCARTHY (Australia): Mr. Chairman, the Australian
Delegation is in complete sympathy with the views of India,
Chile, Cuba and others in support of the viewpoint that services
should be referred to in this Chapter; but whilst being in
sympathy with those views, the Australian Delegation does face
the fact that it seems that nothing really can be done about it
at this meeting of the Preparatory Committee.
I am in agreement with the United Kingdom Representative in
saying that within Chapter VI the circumstances that are objected
to in regard to services cannot be met. In shipping alone, I
am prepared to agree that many of the objectives of the Charter
will, in a measure , more or less be offset by certain shipping
- I--- - V E/PC/T/B/PV/1
practices; but it cannot be dealt with in this particular
Chapter, and to deal with it effectively at all, it would
require a much more comprehensive approach than is now
suggested. The shipping problems which countries will have
to face, and which wore very much in operation before the War,
would require a very special study, and would require work,
extending overtime, by people competent to deal with them.
Delegations, in my view, are not equipped to tackle the
shipping question here, I doubt very much whether it is
in the terms of references of the Preparatory Committee
whether we could actually do it.
Probably, if the shipping monopoly practices were
examined, it would be found that they deal with the zoning
of certain areas where certain groups of shipe serve
obrtain ports and not others. It would be argued and it
is argued, with a certain degree of truth, that such
practices as those under certain circumstances conduce to
efficiency. In other circumstances, I am satisfied that
they militate against many of the forms of international
trade which we are trying to improve.
I am prepared to say personally that shipping requires
attention -- that there are many practices which require
examination; but it has got to be done in a very compre-
hensive and a very discriminating way. Like others who
have spoken on this subject, Australia is vitally interested
in overseas shipping, and would be very glad to subscribe
to any propositions that were put forward for the review
of international shipping. But it has come to the view
that nothing can be done, not only in Chapter VI but at
this Conference. - 12 -
V. E/PC/T/B/PV/1
I would, therefore, summarise our view by saying that
we are in sympathy with the views put forward by the
representatives who desire services to be introduced, but
a
we believe that their views could only be met by/very much
more comprehensive approach than is possible in this Chapter.
Then the next question is, can it be dealt with in other
Chapters? Our view would be that we doubt whether this.
Preparatory Committee is competent to do it, and further,
even it were, we are not equipped and I am certain that many
other Delegations are not equipped, to enter into such a
comprehensive examination of the subject, and, at any rate,
it is too late to attempt it now. Therefore, our attitude
would be that we cannot agree that the subject of services
should be introduced into this Chapter, and we would agree
with the amendment which the United Kingdom will bring forward
in due course. - 13 - E/PC/T/B/PV/1
M. MONTEIRO de BARROS (Brazil) (Interpretation): Mr.
Chairman, the Brazilian delegation consider that the inclusion of
services in this Chapter is not only useful bat of primary
necessity, because If this inclusion is not made it might lead to
the failure of negotiations on tariffs, if all clauses regarding
the phrase are absent. We all know that certain commercial
activities tend towards the monopolisation,and the transports are
certainly one of these activities. Now since experience shows us
that international transport and international trade are closely
linked and are particularly closely linked with international
maritime transport, this must be mentioned in our Charter and
certain rules must be established. I agree that as it is not
possible to discuss during this Session the matter in detail, this
must, of necessity, call for the presence of experts, and certain
rules must provide for certain particular cases, but as the
honourable delegates of Czechoslovakia and Cuba pointed out, it is
possible at least to adopt the principle. It is necessary that
the principle should be adopted now so that, when the time arrives
and another Conference or another international agency deals with
the problem, it finds the principle firmly established. I thank
you, Mr. Chairman.
Mr. A.P. van der POST (South Africa): Mr. Chairman, all
economic activities are necessarily inter-related, and if there
should be mal-practicesin one field they would probably, in most
cases, affect the activities in another field. But, on the other
hand, we have special fields for the different economic activities.
We do the work of specialists. ITO is a trade organization which
deals primarily with trade, and although nobody would deny that ER
-14-
E/PC/T/B/PV/1
mal-practices in the field of banking, insurance and shipping have
their effect on trade, I cannot agree with our Indian delegate and
his supporters that the ITO. Charter is a suitable place to include
a provision for all these various fields. We must be prepared to
.deal with the thing properly, and if we are to include such a wide
range of human activities in the ITO Charter as is proposed by our
friends from India and from South America, we run the risk of over-
loading ourselves and undertaking too much. Services are special
agencies. We have special or anizations, already international
organizations, in the field of banking to deal with them, and we
cannot hope to provide an adequate organization in the ITO to deal
with these highly specialized services. I cannot but support the
attitude adopted by the United Kingdom, and feel that it would be
highly unwise of us to extend the ITO Charter so as to include all
the various services. It is argued that we should refer, at any
rate, to the principle. I do not think, even, that this is
necessary, because that would be merely a pious expression of an
opinion and would, in itself, be an admission that we are not able
to deal with all these various activities - essentially economic
activities - in the ITO Charter. S.
CHAIRMAN: The Delegate of France.
M. LECUYER (France) (Interpretation): Mr. Chairman, the
French Delegation certainly does not misjudge the importance which is
attached to the question of services, and we would be happy if it
could be mentioned in this Chapter, especially since France has
always depended to a certain extent upon services which were ensured
by other nationals than nationals of the French Republic, and this
fact is now accentuated. Therefore it would appear to us highly
desirable if it were possible to deal with this question here, as
it is of primary importance.
During the course of the discussion nobody contested - and I
believe that nobody will contest - the importance of this problem.
However, I also think we would all agree that there are no questions
which are more complex and more difficult than the questions concern-
ing insurance, shipping, air transport and banking. In a few words,
the honourable Delegate for Australia has pointed cut the difficulties
which I attach to the question of shipping. If we had experts here,
I believe that a trustworthy de demonstration of this complex question
could be given in a few moments. Therefore I believe that such a
discussion would lead us so far that we would all recognise very
quickly the need for a special conference, and, although we sympathise
in a very high measure with the proposal to include services in this
Chapter, we are of the opinion that it would be wise to abide by the
conclusions which were reached in London.
CHAIRMAN : The Delegate of the Netherlands,
Dr. P. LEENDERTZ (Netherlands): It is very comprehensible that
when one is talking about restrictive business practices, say, about
cartels, the idea comes up that in this connection the complexities
of shipping, insurance and finance should also be considered, but, as E/PC/T/B/PV/1
- 16 -
a matter of practice - I will not repeat the reasons, which have
already been reported here by the Working Party - it does not seem
possible to do it in this Charter of the I.T.O. The fields of each
of those so-called services are so extensive that cartel practices
are only one of the activities which are pursued in those fields
and it is entirely impossible to take the matter of cartels and
restrictive business practices out of those fields, to treat them
apart and put them into this Charter. They must be seen together
with all the other questions which also arise in connection with those
services.
One can have equal sympathy with the views expressed by the
Delegate of India and the others who are in agreement with him, and
it is perhaps a point which might be considered here,that it is the
intention of the Economic and Social Council to set up a specialised
agency for maritime questions. This being so, I do think we could
not make any allusion to those services in this Charter. It has been
argued here that just one general allusion could be made to them, in
order to induce any specialised agency which might be set up to give
attention to it. I rather doubt whether that is within the competence
of the Organisation we are considering here. I do think that would
be a matter for the Economic and Social Council to deal with and not
for the Organisation we are now trying to set up. Thank you,
Mr. Chairman. P. E/PC/T/B/PV/1
M. STANISLAV MINOVSKY (Czechoslovakia) (Interpretation):
Mr. Chairman, the view was expressed that services are an important
part of the Charter and nobody denied this point of view, but on
the other hand the view has also been expressed that we have no
experts here who could deal with the problem to the fullest extent.
I repeat, that in our opinion it is not necessary to deal fully with
the problem at the present stage, but I believe that it is highly
desirable to establish certain principles, among them the principle
that any discrimination for transport, insurance and banking would
be contradictory to the Charter. I also cannot accept the idea
that we cannot deal with this problem here because it is a difficult
problem. Well, what of it? Even if the problem is difficult, we
have had questions presented which are more difficult and less
important than the question of services and still they have been
included in the Charter. Therefore it seems to me fully justified
to establish certain principles at this stage and here.
CHAIRMAN: The delegate of India.
Mr. G.L. MEHTA (India): Sir, I suppose I am now the last
speaker because we have had a full discussion on this question, but
before you close the discussion I should like to make a few points
clear.
First of all, in the statement which.I read out at the outset,
I had raised only a very specific issue, namely, if we are going to
exclude these services from the purview of the Charter, whether there
was any place for amendments such as those tabled by the United
Kingdom (I am particularly referring to this amendment in regard to
Exceptions to which I referred earlier), as well as to such amend-
ments as tabled by U.S.A. as Article 15A.
I submit, Sir, that if services are to be included that should
be done in a direct and straightforward manner, that is, by laying
- 17 - ~ ~E/PC/T/B/PV/1
down a certain general principle, if the Committee so desires; but
if it is found that on balance it is desirable to exclude services,
then I submit that no reference should beicade to servioes in either
this Chapter or pny other Chanter of the Charter.
Thu Australian delegate referred, for example, to the question
of the terms of reference. As regards the terms of reference, I
believe this question was debated at some length in London and it was
also suggested that the question whether thfse services Tell under
the terms of reference of the Preparatory Committee or not should be
referred for a ruling to the Economic anc Social Counoil.
In fact, you will see that in the General Comments on Chapter
VI in the Drafting Committee's Report, in sub-clause (a), it has been
mentioned that "one delegate held the opinion tfat services Tell
under the terms of reference of theCPreparatory comcittee..." eto,
The point is, if this was the difficulty, then surecy reference oould
have been made to this Council before this Preparatory Committee met
in Geneva.
Then I should also like to say this: that actually the first
U.S.-. draft that was prepared did include this exclltion, as wiLl
be evident by Aference to .article 40 of the U.S.A. Draft Charter.
Article 40c sub-clause(o) makes reference t "agreements-or under-
standings concerning railway transportation, aviation, shipping, and
telecommunication services,"
It was after considering this draft and because the relative
Committee in London came to the conclusion that services should not
be included that in the revised draft which was put forward this sub-
clause (c) was excluded, with the result that it will be found, by
Aeference to article 45 of the London Committee's Report, that in
this provision of "Exceptions to the Provisions of "this Chapterlthere
is no reference to Services.
- iR -
, _ , _ , - 19 -
p. E/PC/T/V/PV/1
I submit that that was a consistent attitude to adopt, If
there was going to be no inclusion of services, then there is no
point for providing for a special exception in regard to this matter.
There are many other matters, Mr. Chairman, - take immigra-
tion, for example, or movement of labour, movement of capital, and
so on, which are also connected directly or indirectly with inter-
national trade, but these are not dealt with in the Charter and
there is no reason why, if we decide on balance to exclude services,
any special exceptions should be provided in the Charter.
The Australian delegate said that there should be no reference
to services, not only in this Chapter but in this Conference as a
whole. Well, if that is the case, then there should be no refer-
ence to services in this Chapter as provided for in any other place.
I should also like to state, Mr. Chairman (I apologise for that
because I thought I would make the position of the Indian delegation
clear at a later stage), that I have referred to the United Kingdom
amendment not because I want it to be discussed on its merits - I
bow to your ruling that that can be done later - but because it
raises this fundamental principle and this fundamental issue, whether
services are to be included or not, and our submission is that
services are not to be included, then there is no place for such
exceptions to be provided.
As regards the other question, namely the inclusion of ser-
vices, I said I apologist because I did not really make the position
clear at the outset. I thought that would be considered later.
But since you have invited discussion on the question of principle,
I should like to mention that the Indian delegation has been care-
fully considering this question since the London Conference, and in
Geneva. We recognise the close connection and relationship between
goods and services such as shipping, aviation, banking, insurance, E/PC/T/B/PV/1
telecommunications, etc. which really combine the producer with the
distributor and are essential to international trade. In fact,
as our friends from South America said, we too in our own shipping
anti baking and insurance have suffered very severely because of the
discriminatory practices which have been adopted against them.
Therefore we have also felt that this is a matter which an Organisa-
tion like this should be competent to deal with.
But I must say this: that, speaking for the delegation as
a whole, there is considerable force, we feel, in the argument that
the International Trade Organisation should not be overburdened with
too many tasks and obligations and functions at the outset, and I
think there is also considerable force in the cort-ntion that some
of these questions which are, as the other delegates have mentioned,
so complex and technical, had better be dealt with by the specialized
agencies of the United Nations concerned in consultation with the
International Trade Organisation whenever necessary.
That is all that I want to state.
P. -21- E/PC/T/B/PV/1
CHAIRMAN: I wonder if I am correctly interpreting the views
Just expressed by the Indian delegate if I, state that he is not
proposing that services should be specifically included in
Chapter VI, but that he is only opposed to the exclusion of services
as covered by the amendment proposed by the United Kingdom delegation,
and that he would. be content if the text was left as it was in
New York so far as services. were concerned, which will then enable
the International Trade Organization to consult with other
specialized agencies on restrictive practices in tne field of services.
Would that conform with your view?
MR. G.L. MEHTA (India): That is quite correct.
CHAIRMAN: The delelgate for Czechoslovakia.
M. STANISLAV MINOVSKY (Czechoslovakia) (Interpretation):
Mr. Chairman, I would only like to mention that Article 12 speaks
of capital funds, specialized personnel and managerial skill. This
is nothing else than services. Therefore, if we want to avoid
speaking of services in the Charter we must also come back to
Article 12.
CHAIRMAN: In reply to the delegate of Czechoslovakia, I would
point out that we do not expressly exclude services. There is no
objection to including in other parts of the Charter services
which have a bearing on those particular Articles on other subjects.
I do not think that what the delegate for Czechoslovakia has
just said is inconsistent with the view expressed by the Delegate
of India. I am wondering if the other delegations who have
expressed themselves in favour of the inclusion of services are
also sharing the same views expressed by the delegate of India. J. E/PC/T/B/PV/1
MR. G. GUTIERREZ (Cuba): The Cuban delegation reserves the
possibility to present an amendment in order to find out where
those principles related to services could be inserted, because I
am very much afraid that every one of the Committees, when they
cover Chapter I, will say "This is not the proper Chapter"; when
they take Chapter II, they will say the same, and so, on with the
third, fourth and fifth until the Charter ends. So we wish to find.
out first in what part of the Charter this matter can be
contemplated. G.
- 23 -
E/PC/T/B/PV/1
CHAIRMAN: If I interpret the view expressed by the
Delegate of India correctly, it is that if services are not
expressly excluded from this Chapter the Organisation would
be able to deal with services in consultation with other
specialised agencies specially set up to cover the fields
relating to particular services.
Mr. GUTIERREZ (Cuba): Mr. Chairman, if that is the
interpretation I do not share it; so I cannot support the
Delegate of India's suggestion as to the effect of its Amendment.
CHAIRMAN: I was hoping to be able to find a solution to
this problem at the present stage of our discussion, if those
Delegates who had spoken in favour of the inclusion of services
shouId all have shared the view of the Delegate of India. We
could then leave this subject at the present time and return to
it when we deal with the Amendment proposed by the United Kingdom.
Mr. GARCIA-OLDINI (Chile) (Interpretation): We must go back
somewhat. We cannot accept the view that this agency is not
competent to deal with the problem. I believe that if our views
could be heard outside these walls people would be astonished.
Commerce is a means of exchange between countries, and there is
no commerce without transport; and if we to not find a fair
solution for this problem then a lower and fair commerce is not
possible either. If we leave this very important gap as it stands,
then countries may adopt certain measures to fill this gap out;
not
and then they will be free/to abide by certain agreements.
It would be contrary to commonsense to decide that we are not
competent to deal with the problem. In our opinion it would be
quite wrong not to include a reference to it in the Charter. Of
course, the problem is complex, and it is possible that its
solution necessitates a special Conference; but we believe that G.
- 24 - E/PC/T/B/PV/1
the principles should be clearly established, in one of the
other Articles of the Chartert. This will be a safeguard, for us
and on that point we make a formal reservation.
CHAIRMN: The Delegate of Brazil.
Mr. MONTEIRO DE BARROS (Brazil): The Brazilian Delegation
fully adheres to the statement just made by the Chilean Delegation.
CHAIRMAN: If I may sum up the present state of our discussion,
it is this. Some Delegations are in favour of the inclusion of
services in Chapter 6. The Indian Delegation takes the position
that if services are not excluded fran the scope of Chapter 6,
then any Member who considers that practices relating to services
are having a harmful effect on trade could raise the question in
the International Trade Organisation, and could then consider it
in consultation with the specific specialised agency concerned
with that question. Is that the correct interpretation, Delegate
from India?
Mr. MEHTA (India): Yes, Sir.
CHAIRMAN: Other Delegations propose that there should be a
specific exclusion of services. The way it seems to the Chair is
that the position taken by the Delegate of India does present a
possible mutual ground on which we might all reach a unanimous
conclusion, and therefore I would like to take the sense of the
Commission as to whether or not a basis does exist for a solution
of this difficulty in the mariner proposed by the Delegate of India. - 25 -
CHAIRMAN: The Delegate of South Africa.
Mr. A.P. VAN DER POST (South Africa): Mr. Chairman, I
am not quite sure now about the position as summed up by you.
That seems to be in a way the correct interpretation of the
course of the discussion, but, on the other hand, India says
that it does not want services to be specially excluded. We,
for our part, feel that we do not want services specifically
included, and the interpretation you have given is that it is
at any rate implied that they are included.
Now, we have got an amendment on Article 15(3) in
Commission A to exclude transportation from 15(3), and I could
therefore not at this moment subscribe to the interpretation
Which you have given on behalf of India. I very much regret
that without further consultation I cannot enable you to arrive
at that unanimous decision on the basis of the Indian inter-
pretation.
CHAIRMAN: The Delegate for Australia.
Mr. E. McCARTHY (Australia): Mr. Chairman, with a
view to clarification as to the proposition, it does seem
to us that if that view wore taken you would find that the
Organization would be obliged to undertake investigations
on receiving a complaint which it might be unable to bring
to a conclusion, the reason being that this Chapter is linked
up with the rest of the Charter. It refers to Article 1,
and to take just one example: if a complaint comes from any
Member on an agricultural product or goods dealing with
subsidies, the Organization has not a Chapter on subsidies
to define what is admissible and what is not, and that would
assist it in coming to a conclusion; but if a complaint
were made under Article 40 on shipping, for example, and
-- - PI V. E/PC/T/B/PV/1
the subject of that complaint was subsidies, what could the
Organization do? It says it shall examine and take every
possible action to prevent it, and so on, and I suggest
that on the question of subsidies as applied to shipping,
it could not possibly give a decision unless it went over
the whole field of subsidies, and its infinite variety as
applies to shipping.
Now, is that right? I suggest that the objection to
examining services in the way that the Indian proposition
might require is that the restrictive business practice,
as it stands now, is a part of the Charter. where the
Organization will get a whole lot of criteria to judge
what is objectionable and what is not. As an alternative,
it might be that an extra paragraph could be put into Article
45 or at least an extra Article on the lines that where the
Organization deems that a complaint is not within the terms
of this Charter, it might refer to another specialised
agency. That would avoid any exclusion and it would avoid
the Organization perhaps having to undergo a lot of invest-
igations which this Article 40 lays down, and on which it
could not come to any conclusion, because it was a service
and services are not covered in the Charter.
We are, therefore, in some doubt as to whether we could
support the view that the leaving out of the United Kingdom
proposition might have the result of the Organization being
able to automatically pass over a complaint on a service
to some other Organization. I do not know whether that is
very clear, but it seems therefore that we would want to
have a look at it again before we say that we agree to the
Indian proposition. - 27 -
E/PC/T/B/PV/1
Mr. P. LEENDERTZ (Holland): Mr. Chairman, I do not see
clearly - perhaps I did not follow entirely well - what could be
the use of the Organization being able to transmit any complaint
to another specialized agency. Could they not transmit their
complaints directly to the Organization?
Mr. S.L. HOLMES (United Kingdom): I am not quite sure
whether I followed in detail what the representatives of Australia
said, but I think that, in general, we agree with it. The
difficulty at the moment, as we see it, of accepting the solution
which he proposed is that we are not quite clear whether that
would put the position beyond doubt, or whether the same sort of
question or item would now arise under the Charter, whenever
anybody made a complainton the ground of restrictive business in
relation to a service. Our object in putting forward our
amendment to Article 45 had been to put the matter beyond doubt,
hoping that members would be generaly satisfied with the full
opportunities which we believe will be provided to them and to all
of us if necessary, to raise this question at the proper time and
in relation to the proper type of agency. It would, I think,
perhaps be better to see for the moment whether a further reading
of the Article which we proposed - the revision of Article 45 -
does not really meet the point which a good many delegations have
expressed, and the point which was made by the representative of
India in the second place. I rather hesitate to go through the
actual wording of our proposed revision of Article 45, because we
are not dealing with the text, but I would feel that that, or
something very close to it, is representative of the general view
of the members here. -28- E/PC/T/B/PV/1
CHAIRMAN: In view of the remarks just made by the delegate
of the United Kingdom, and in view of the fact that we have
already had a very exhaustive discussion on the principles of the
inclusion and exclusion of services, I would propose that we
take up now the text of the United Kingdom amendment to Article 45,
and discuss further the text of this amendment. We could have a
statement from the United Kingdom delegate explaining the nature of
his proposal and the reasons behind it. We could then adjourn and
reconvene sharply at 3 o'clock to consider the United Kingdom
amendment. I would like to know if this proposal meets the wishes
of members of this Committee? S. E/PC/T/B/PV/1
- 29 -
M. Stanislav MINOVSKY (Czechoslovakia) (Interpretation): I
think, in order not to increase the existing difficulties, my
Delegation will not insist that the matter be dealt-with in connection
with Article 39 and we reserve our right to come back to it when we
take up tne United Kingdom amendment for discussion.
It my other colleagues agree with this proposal, I suggest that
we should continue the discussion, Article by Article, and that we
take up the next Article this afternoon.
CHAIRMAN: I take it the Czechoslovak Delegate has no objection
to taking up the United Kingdom amendment along with Article 39 at
the present time ?
Mr. F. Garcia OLDINI (Chile) (Interpretation): Mr. Chairman,
is it understood that we shall take up the whole matter again, other-
wise I do not understand how we can discuss an exception to a rule
which does not exist.
CHAIRMAN: Is the United Kingdom Delegate agreeable to the
course proposed?
Mr. S.L. HOLMES (United Kingdom): Certainly, if that is the
wish of yourself and the Committee.
I might make a few remarks on Article 45, in the terms of the
revision which we propose.
As I have explained, we felt that the only important thing,
perhaps, was that there should be a certain clarity and that we ought
to know where we stand. It had always been our view that to intro-
duce the whole field of services in this connection in the Charter
would be to extend the range too greatly and that it would be perhaps
to ignore the very great complexities which the whole question of
services introduces, as several speakers this morning have explained. S.
E/PC/T/B/PV/1
- 30 -
We feel that what we want to do is to put things in their right
places and that this it what our amendment would do. As has been
mentioned, certain particular services, certain particular transport-
ation services, for instance, are covered or are about to be covered
by particular specialised agencies and one would not be surprised if
those agreements setting up such specialised agencies made provision -
perhaps rot altogether out of line with the sort of provision that
is made in Chapter VI here - for dealing with complaints regarding
restrictive business practices which in some way impede the objects of
those agreements.
I might, I think, say that some of the remarks made this morning
do seem to suggest a certain confusion between the objects of Chapter VI
and discrimination, but we would recognize also that in certain cases -
in one, at any rate, perhaps, that of insurance - there is no very
obvious body at the moment that would be prepared or competent to
take over the subject as a whole or, incidentally to the subject, com-
plaints whish might be made against certain practices in the insurance
field. Though there again I am speaking without prejudice to the
question whether such complaints can appropriately be made against
insurance companies; that would remain to be seen.
Now the whole field, perhaps, is not covered by existing agencies
or agencies which are in immediate prospect. We would feel that
banking - transportation I have mentioned, because there are many such
agencies - would obviously be the field more of the International
Bank. That would leave us perhaps with one or two gaps of which
insurance might be one. S .
E/PC/T/B/PV/1
- 31 -
In the opening words of our revision, you will find, Mr. Chairman
a reference to Article 61 (c) . Article 61 (c) comes in that part of
the Charter which relates to the Organization and it provides that
among the functions which this International Trade Organization will
have would be to make recommendations for and promote international
agreements on certain measures designed to improve the bases of trade.
Now if it does appear that there is some service which is not
covered by an existing and appropriate agency, and there were general
agreement that that type of service should be covered by some inter-
national understanding, then it might be that there was general agree-
ment that this was an appropriate matter for the organization to
take up under the functions attributed to it in Article 61. So that
the object of the first part of our amendment was to remedy any
possible omission, to fill any possible gap which might exist in the
field of services, but to leave services where there was an appro-
priate agency to deal with them to be dealt with by that agency.
If it trespass on each other's territory, we feel that confusion
is likely to arise. If, for instance, we make recommendations about
civil aviation, or we try and take some action in relation to civil
aviation,then shall we not confuse the issue, and will it be for the
general benefit?
The whole field with which the new post-war arrangements are
dealing is a very large and complicated field and it is quite essen-
tial, we feel, that there should be a fairly clear understanding as
to who does what. On the other hand, supposing we do feel it nece-
ssary to intervene in other people's business, then shall we not find
that other people wish to intervene in ours? - 32 -
J. E/PC/T/B/PV/1
MR. S.L. HOLMES (United Kingdom) (Contd.): I wonder whether
it would be for the general benefit if we had addressed to us from
a whole number of other agencies a lot of recommendations about
how we should conduct our business. Therefore, Mr. Chairman, I
would hope that with the provision which I have explained that
exists in the terms of our amendment for gaps to be filled, it
might be the pleasure of this Commission to take our amendment in
the spirit in which it is intended - as a helpful amendment
designed both in the short run and in the long run to promote the
orderly conduct of business and to inure to the general advantage.
I do not think, Mr. Chairman, that I need say more than that,
at this stage at any rte, in defence or explanation of the straight
forward amendment which we have proposed.
CHAIRMAN: The Commission will resume sharply at 3 o'clock.
We will resume discussion on the question of the inclusion or
exclusion of services in relation to both Article 39 and Article 45.
The meeting is adjourned.
The meeting rose at 1.00 p.m. |
GATT Library | zj795tb1501 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. First Meeting of the Tariff Agreement Committee held on Tuesday, 5 August 1947, at 10.30.a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, August 5, 1947 | United Nations. Economic and Social Council | 05/08/1947 | official documents | E/PC/T/TAC/PV/1 and E/PC/T/TAC/PV/1-4 | https://exhibits.stanford.edu/gatt/catalog/zj795tb1501 | zj795tb1501_90260002.xml | GATT_155 | 8,354 | 49,986 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQU E
ET SOCIAL
RESTRICTED
E/PC/T/TAC/PV/1
5 August 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
FIRST MEETING OF THE TARIFF
AGREEMENT COMMITTEE
HELD ON TUESDAY, 5 AUGUST 1947, at 10.30.A.M.
IN THE
PALAIS DES NATIONS, GENEVA.
Hon, L.D.WILGRESS (Chairman) (Canada)
Delegates wishing to make corrections in their speeches
should address their communications to the Documents Clearance
Office, Room 220 (Tel: 2247).
Delegates are reminded that the texts of interpretations
which do not pretend to be authentic translations, are
reporoduced for general guidance only; corrigenda to
the texts of interpretations cannot, therefore, be
accepted. ER 2 E/PC/T/TAC/PV/1
CHAIRMAN: The meeting is called to order. This is the
first meeting of the Tariff Agreements Committee, which has been set
up by the Chairman's Committee. We shall take as our Working Paper
document T/135, which is a report of the Tariff Negotiations Working
Party on the General Agreement on Tariffs and Trade. The procedure
I propose to follow is to, first of all, have a general discussion
on the re ort of the Tariff Negotiations Working Party, and I would
ask Members of the Committee to concentrate their attention on parts
I and III of the Draft Agreement, because those are the parts which
are peculiar to the General Agreement.
re
Part II, as the Members of the Committee know,/produces sections
of the Charter for which the text has not been definitely approved.
After we have had a general discussion of the report of the
Tariff Negotiations Working Party, we can then take up in detail the
Articles of the Draft Agreement commencing with parts I and III, and
leaving any detailed consideration of part II until a definite text
of the Charter has been established by the Preparatory Committee.
It will be in order, however, for Members of the Committee in the
course of their general discussions, to refer to the statement which
has been appended to the report, and which is given in Annex I on
pages 10 and 11, and- which compares the draft proposal of the Tariff
Negotiations Working Party with the equivalent articles in the New
York Draft and which have been put in the records of the New York
text of the Charter.
Are there any comments on the procedure that I have outlined?
I take it then, that the procedure is a proved by the Committee, and
we will therefore commence the general discussion of the report of
the Tariff Negotiations Working Party, concentrating our attention
on parts I and III of the General Agreement. Does any Member of
the Committee wish to speak on the report? 3 E/PC/T/TAC/PV/1
Dr. H.C. COOMBS (Australia): Mr. Chairman, there is no doubt
that the Tariff Steering Committee had a very difficult problem to
deal with in its consideration of the General Agreement, As I see
it, from the mechanical point of view, the main features of that
problem were the desirability of getting the tariff reductions
negotiated here operative as early as possible in order to take
advantage of the progress made here as quickly as possible, and,
furthermore, to avoid the difficulty of having the results of the
negotiations held up from operation, and therefore perhaps subject
to leakages, criticism and so on for a long period, while at the
same time it was necessary to fit the introduction of the results of
the Agreement into the requirements of the various constitutional
and political problems of the Members of the Committee. I find
myself full of admiration for the ingenuity which the Tariff Steering
Committee has shown in working out a solution to these difficulties,
and I think the essential features of the plan, which,as I understand
it, are to enable countries to accept the agreement provisionally
or definitely,whichever they wish, at the outset, are that those who
have accepted provisionally will be required, after the World
Conference when the precise content of the Agreement is finally known,
to decide whether they propose to accept it definitely at that stage.
ER 4:
This basic idea does seem to me to be a very ingenious way
of solving, quite a difficult problem, We have, however, given
a good deal of thought to the time-table as it is implied in this
Report and to the obligations which we would be accepting if we
agreed to the plan as it is embodied in the Report of the Tariff
Steering Committee, and I am sorry to say that our conclusion is
that it is not practicable for Australia to accept the time-table
and tho obligations whioh the Report would - appear to require us to
accep.-
As I understand it, the programme the Committee contemplates
is that roughly on the 10th September we will conclude our
negotiations here and that there will be a period of two or three
weeks in which the texts will be tidied up and checked and that
by the end of September the Delegations here will be expected to
be in a position to sign the Agreement on behalf of their governments
Now, the nature of that signature and its meaning is a matter
of profound importance and, as I understand it, the signature
would mean that the government on whose behalf the signature was
made would be undertaking: (a) to introduce the tariff schedules
and Agreement at least provisionally and (b) on the. assumption
that the out come of the World Conference was satisfactory, to
accept the agreement 'c iti y sometime next year. That
undertaking would, of course, be subject to approval by the
parliaments of the courtries concerned; but it would be a clear
undertaking by the government to introduce ultimately the
Agreement to parliament, with the government's support. Now that,
Mr. Chairman, is in my country at any rate a very serious
undertaking for a government to give in 'l 1' which is of
profound economic importance and in connection with. an Agreement
which covers not morely a very large proportion of our customs
E/PC/T/TAC/PV/1 J. 5 E/PC/T/TAC/PV/l
tariffs. but a. very substantial part of the commercial policy
generally.
I do not want to woary the Committee, Mr. Chairman, with the
story of our political problems, but it is the practice in my
country for major decisions of Cabinet and of Parliament to be made
after prolonged and detailed examination, criticism an, counter-
criticism and quite a lot of public controversy - there may be
opinions as to the merits of this form of political activity but
they are, from our point of view, fundamental and we must accept
them. The fact that that is the way we go about our political
business makes acceptance of the programme contemplated here quite
impossible for us. So far, the work here has been carried out
by the Delegation in close consultation with those Members of the
Cabinet who are directly concerned, but a complete review of the
results of this Conference has obviously not been taken by the
Cabinet merely because it is impossible at this stage. At Some
stage in the programme, the Austrlian Cabinet will need to review
the results of the negotiations as a whole, review the outcome a
the discussions on the Charter as a whole, and reach a decision
as to whether on balance, it is a desirable thing for Australia to
accept this Agreement. That will be quite a difficult task and
it will, in my opinion, be impossible for it to be undertaken
until both the Charter discussions and the Tariff negotiations
here are substantially completed. It is a process which will
take not days, but certainly weeks and possible months.
Furthermore, the Government will of necessity have to carry out the
same sort of consultation and discussion within its own party,
and that, too, will take time, although to some extent, of course,
it is simultaneous with the examination of the project by the
Cabinet. So, I inform the Committee of this, Mr. Chairman, in J. 6 . E/PC/T/TAC/PV/1
order to illustrate thr difficulty which we would have in accepting
the programme. It would, I have no doubt whatsoever, be quite
impossible for the Government of Australia to be in a position to
meet the undertakings which signature would involve by the
30th September.
We have been forced, therefore, to the conclusion that the
proposal that the General Agreement on Tariffs and Trade should be
signed in that sense at Geneva is impracticable.
We have, therefore, an alternative suggestion to put to the
Committee. It appears to us that if the Tariff negotiations are
concluded on the 10th September it will then be necessary, for our
Delegation at any rate, to return home to place the results of
those negotiations before Cabinet, and to be available for
detailed consultation as to their implications. V 7 E/PC/T/TAC/PV/1
We would wish, therefore, merely to leave here in Geneva
a minimum number of officers who would be concerned with the
checking of the text and the general tidying up work here,
and we would wish that those officers should be required only
to initial a text her. as an accurate record of what had in
good faith been negotiated and agreed to by the Delegation;
that there should be fixed before we leave Geneva a date and a
place when those countries participating in the negotiations
would be expected to append the ir signature to the General
Agreement with the implications of signature which have been
suggested here.
The sort of idea which we have is that by 30th September
the texts ought to be ready for initialling as correct, and that
at a date, say, 15th November or perhaps 21st November, the
opening of the World Conference might be fixed as the date when
countries would sign the General Agreement, and thereby
undertake to introduce at least provisionally the tariff
schedules and the content to the General Articles of the
Agreement. If that were done - if the signature took place,
say, at the Headquarters of the United Nations in New York
on 15th November, in the meantime work could have been got
ahead on the mechanics of getting the tariff schedules ready
for introduction and announcement; and it could be agreed
that on some date shortly after 15th November there would be
simultaneous announcement in all countries who had signed the
Agreement of the schedules which were to be operative, and
countries could then make them operative in accordance with
their own constitutional and parliamentary procedures as soon
as they wished to do so. They could do it simultaneously
with the public announcement or, if they wished, they could. 8 E/PC /T/TAC/PV/l
leave making them operative until some days or weeks after that,
if that was convenient to them; but it does seem to us to be
absolutely foundamental that announcements should be simultaneous.
There could be nothing worse politically, as far as I can se.,
for any Government, than to find tariff reductions which it proposed
to make in its tariff announced in somebody else's Parliament, and
become available to their own nationals only through the Press.
It does seem to us that simultaneous announcement is a fundamental
requirement, although simultaneous operation is no t nearly so
important - though it should, quite clearly, be open to countries
to make their reductions operative if they wished on the date an
which they were announced.
To sum up, Mr. Chairman: it seems to me that the sort of
programme which would be a practicable one from the point of view
of my own country, and I believe a number of others, would be,
if we conclude our negotiations here on 10th September, to
initial the texts as agreed on 30th September and to set the date
of 15th or 21st November for formal signature either at the
Headquarters of the United Nations or in Havana; and that it
should be agreed that there should be simultaneous announcement
some time in December, and that the new rates could become
operative at any time after the simultaneous announcement which
was convenient to the countries concerned.
Mr. Chairman, that completes what I have to say about the
mechanical difficulties of making. it operative and the programme
which is entailed. There are certain other features of the two
parts of the Agreement which i would wish to refer to; but I
wonder whether it might not be better to leave those, since they
are on quite a different point, and take them up after the other
Delegates have expressed their views on this problem of the
time-table.
V E/PC/T/TAC/PV/1
CHAIRMAN: Dr. Coombs in his opening remarks has dealt with
the important question of the timetable relating to signature,
simultaneous announcement and provisional application of the General
Areement, It might be useful, and it will facilitate the work of
our Committee, if other members, in their opening remarks, could also
express their views on this question in order that we may obtain the
sense of the Committee on this important question of the timetable.
Do any other members of tlhe Committee wish to speak?
(No delegate asks to speak)
It is a rather unusual state of affairs in Geneva when no-one
wishes to speak.
Mr. H.E. Z.AUGENTHALER (Czechoslovakia): Mr. Chairman, I
think that if we have to sign the Tariff Agreement we are entering,
into very important obligations for our Governments. It is not only
a question of the reduction of tariffs, but of all the other matters
which come into this Agreement, and; as stated in the Protocol of
signature, the Governments undertake to be guided by the provisions
of the Draft Charter in their activities. I am afraid that the
Constitutional laws of Czechoslovakia do not admit of a procedure
of that kind. I have requested the opinion of the authorities in
Czechoslovakia on this matter, but have not yet received instructions,
In my opinion, however, I think that the Czechoslovak Government
would be able to put into force provisionally the tariff reductions
on those Articics which are directly (Concerned with Customs and
Customs formalities, but that, the rest could not be put into force
before a decision on them has been taken by Parliament itself.
M. E.L.RODRIGUES (Brazil): Our position, Mr. Chairman, is
almost the same as that of Australia, and we see no other way than to
agree with the delegate of Australia. However, I should like to have
9
M. M. 10 E/PC/T/TAC/PV/1
some explanation about the inclusion of the Articles of Parts II and II:
of Document T/135 in the General Agreement at this stage. If we have
to take into consideration the fact that the text of these Articles
may be changed in Havana, I feel that by including them
in the General Agreement we are anticipating our decision. If, later
on, there is a new discussion and the Articles are changed, we shall
be causing ourselves a good deal of difficulty. I should like to
have an explanation on this matter so that I can give full information
to my Government. G 11 E/PC/T/TAC/PV/1
CHAIRMAN: I may explain for the information of the Delegate
of Brazil that Parts I and III are those parts which are peculiar
to the General Agreement, and do not reproduce Articles of the
Charter except to the extent that Article 1 is a reproduction
of Article 14 of the Draft Charter.
With regard to the division into three parts, I would
xxvii
refer the Brazilian Delegate to Par; I of Article I'dv which is
given on page 61 of the Report and which provides that
if, on or after the day of the signature of the Charter of the
International Trade Organization, two-thirds of the contracting
parties so agree, Part II of this Agreement, in whole or in part,
shall be suspended on a specified day and shell, on and after
such day, be superseded by the provisions of the Charter for such
time as the Charter remains in force, provided that all of the
contracting parties to this Agreement shall on that date have
become Members of the International Trade Organization,
A further reference to Parts 1,II and III will be found in
Article add which deals with provisional application of the
Agreement, and which is given on page 63 of the Report.
Are there any other speakers? The Delegate of Norway.
Mr MELANDER (Norway): Mr. Chairman, our position is
substantially the same as the position of Australia. Our
Delegation will have to report to our Government the results of
the Tariff negotiations, and the Government will have to place
them before our Parliament. It is very unlikely that it would
be possible for, first the Government, and secondly Parliament,
to take any decision on whether or not we are in a position to
put into force this Agreement, until the end of November.
Consequently we feel that the date suggested by the Australian
Delegate - November 21st - probably would be the earliest date
on which we could sign and put into force provisionally this E/PC/T/TAC/PV/1
Tariff and. Trade Agreement.
On the other hand there is one other consideration, I think,
and. that is that if this Agreement will contain substantial parts
of the Charter more or less on the same lines as the present
proposal, it may well be that our Government and. Parliament will
consider that this is in reality a question of putting into force
the Charter before it has been finally accepted; and it may well
be that some of the articles of the Draft Charter as provisionally
agreed. in Geneva will be such that our Government and Parliament
will be in doubt as to whether they Could. be accepted..
That, I think, is very likely. In any case, if it i s a
question of introducing or including essential parts of the Charter
in the Tariff and Trade Agreement, I should not be surprised if
the decision of our Parliament will be that we will prefer to wait
until the end of the Havana Conference, so that we know the
results of the Charter then we can take a decision on whether
or not the Charter ought to be accepted , and then at the same time
consider putting into force this Tariff and. Trade Agreement.
XXXII
I would in this connection mention that article of the
Draft Text (page 65) refers to the provisional putting into force
of Parts I and. III of the Agreement, and. Part I1 of the Agreement
to the fullest extent not inconsistent with existing; legislation.
Now if that means that substantial parts of the Charter, as in this
proposal, will hate to be put into force immediately, at the same
time as the Tariff part, if these Articles do not conflict with
existing legislation, then it will mean, as far as I Can see, that
we shall, in fact, be putting into force substantial parts of the
Charter. If it means, or if it could be altered to mean, that
any Government signing the Tarif f and. Tade Agreement shall be
allowed to put into force Parts I and. III only, and, then reserve
its opinion as to whether or not Part II should. be put into force
provisionally, until the final Conference is ever, I think that
will make the position much easier. 13
CHAIRMAN: The Delegate of the United Kingdom.
Mr. J.R.C.HELMORE (United Kingdom): Mr. Chairman, I
have listened very carefully to the speeches which have been
made subsequent to the speech by the Delegate of Australia
with which we began, and I have the feeling that those Delegates
who have spoken have not appreciated the ingenuity of the
Tariff Steering Committee, to which the Delegate of Australia
referred, in resolving this problem of bringing the tariff
schedules into effect quickly without making it necessary for
Governments finally to face all the problems concerned in the
Draft Charter until it has been finished with and put into
this final form and agreed at Havana.
I would like therefore to underline certain words in the
draft put before us which seen to me to answer most of the
difficulties which have been raised.
In the first place, as I understand it, Mr. Chairman, it is
suggested to us in this draft that we should proceed by way of
provisional Application. If we look at Article XXXII, on
P. cs 63 and 64, which deals with provisional application, we
see that the real meaning of pirvisional application is that the
Agreement can cease to be provisionally applied by any country
et 60 days' notice, That is not a very difficult obligation
to undertake, it seems to me. So that any Government which
does apply it provisonally is binding itself for 60
days at a time. (Not that one hepes Governments will apply
it provisionally and cease to apply it provisionally two months
later), Nevertheless, it is possible to say to Parliaments and
to the public in our various countries that provisional really
does mean provisional, and that there is an escape; from this at
very short notice .
S S
In the same, article - Article XXXII - Paragraph 1 (b)
deals with the provisional application of those parts or
the Draft Charter which are incorporated in Part II of the
General Agreement. Those, the Draft suggests, we should
apply provisionally, that is, two months at a time, to the
fullest extent not dnconsistent with existing legislation,
so if any of us has legislation which is inconsistent with
Part II we are not required to alter it. There is a very
obvious reason for that. No parliament would want to alter
legislation to comply with an agreement which as only being
applied provisionally,
Then, when we look at the Protocol of Signature, to
which the Delegate of Czechoslovakia referred, which, as it
wore, picks up the remainder of the Draft Charter, the under-
the
taking says that "pending/entry into force of a Charter,"
we should "observe to the fullest extent of our authority
the principles of the Draft Charter. " We do not say "the
provisions of the Charter"; we say "the principles of the
Draft Charter" I think there is an important difference
of emphasis in those two words, We say: "to the fullest
extent of our authority." I understood from the Delegate
of Czechoslovakia that he feared that the fullest extent of
the authority of his Government would be nil, so I do not
think he would find that undertaking a very onerous one,
The third difficult point is how do we bring all this
into force provisionally when we are not sure whether the
final Charter will be the same as the Draft, end that we
deal with by saying that as soon as the Draft Charter becomes
14
E/PC/T/TAC/PV/1 S 15 E/PC/T/TAC/PV/1
a final Charter and comes into force, the parties to this
Agreement immediateoly decide whether to scrap Part II
altogether - which on. would hope it would be possible to do -
or to modify it so as to conform,
In those three main ways, Mr. Chairman, it seems to me
that the Draft which has been put before us does meet the
basic problem to which the Delegate of Australia referred. That does
not mean - to say, that some of the words in this Draft may
not require to bs altered or to be re-examined, but in
principle it seems to me that the solution has been found far us.
May I. now refer to the remarks of the Delegate of Australia
on the time-table. I .would not like to commit -myself at
this moment on how his objective can be met. Whether it is
by initialling here or whether it is by signing here with
certain reservations attached to some signatures - that those
signatures are a referendum - is a matter we can look at
further, but the main idea of his time-table - September 10
for finishing the negotiations, September 30 for finishing
the texts and seeing that the scheduls are accurate, with
some method of leaving the Agreement open for signature
until about the middle of November, coming into force between
the middle of November and, say, the. end of the year
seems to me to be acceptable. E/PC/T/TAC/PV/1
I would like to underline what he said about the absolute
necessity for a firm undertaking between governments that publication
must be simultaneous, and must be in each of the capitals of the
governments who have signed or who have initiated.
I think I should add, from the United Kingdom point of view, that
the date of November 1st for the provisional application which
not
appears in the draft, would/be possible. That is quite apart from
the question of when my government could authorise signatures It
is a question of the administrative work which has to be done in
order to effect the changes in the tariffs. I suspect that the date.
of November 1st was out into this draft before we had agreed on a
slightly longer timetable for the Tariff Negotiations than we had
agreed upon yesterday, and for my part I would sooner see a date of
December 31st in the paragraph providing for provisional application.
ER 17
J. E/PC/T/TAC/PV/1
CHAIRMAN: The Delegate of South Africa.
DR. J.E. HOLLWAY (South Africa): Mr. Chairman, before
devoting my attention to the questions before the Committee now,
I would like some elucidation about article XXXII.
Article XXXII contains certain blanks. It is not clear to
me how the Committee, when they drafted this, intended those
blanks to be filled in. They could be filled in either by
putting into them the names of all the governments not mentioned
here who are Members of the Conference, or only the names of those
governments who can provisionally, at the date mentioned, put
into force Parts I and II. I presume the latter is the
intention, but if the letter is the intention, the last sentence
of paragraph (b) should not be part of paragraph (b) at all but
it should be a sub-paragraph of paragraph 1. At present, it is
simply part of paragraph (b) and therefore seems to refer to
Part II only.
CHAIRMAN: The Delegate of South Africa has called attention
to what is a typographical error in the setting up of Article XXXII.
The last sentence of paragraph 1; reading "The other signatory
governments, and the above named governments in respect of any
territories other than their metropolitan territories, shall take
like action as soon as possible after November 1, 1947." should
be a separate paragraph - at least, it is part of paragraph 1,
but it should not be indented. The indentation should only be
(a) and (b), and then the remainder of the paragraph should read
as if it were a separate paragraph of parragraph 1.
As to the first question raised by the South African Delegate,
it is obvious that :provisional application can only be made
effective if certain governments find it possible to do so on a
certain date. A decision as to what governments are necessary EP/T/TAC/.PV/1
in order to give Provisional Application to the Agreement was not
taken by the Tariff Negotiations .Working Party, because that is
properly a question which would have to be deferred until . later
stage, so that the only countries that are given in the First part
of paragraph 1 are those countries which were represented on the
Tariff Negotiations Working Party. The Members of the Tariff
Negotiations Working Party felt that their governments could give
effect to the Provisional application - not necessarily on
November1st, but on some data which would later on be Agreed upon.
Then, it would be question to be examined as to what other
countries were necessary in order that Provisional Application
should be effective on that date, leaving the other signatory
governments to apply Provisional Application as soon as possible
after the specified date.
I think that answers the question raised by the :South
African Delegate.
J.
18 V 19 E/PC/T/TAC/PV/1
CHAIRMA.N: The Delegate of France.
M. Pierre BARADUC (France) (Interpretation): Mr. Chairman,
the representative of the United Kingdom has very skilfully
presented the advantages of the text of the Draft Agreement, and
he has stressed the ingenious provisions which were found by the
Steering Committee in order to make the text applicable. I have
nothing to add to his statement, since I fully approve it and
fully associate myself with what has been said by the- Representative
of the United Kingdom.
As you said yourself, Mr, Chairman, France is among the
countries which are enumerated in Article XXXII _s being ready to
apply this Agreement provisionally. In Order to make clear to my
colleagues the position which is adopted by our Delegation, I may
add that we are ready to sign the Draft Agreement on 3Oth September,
and that we are ready to apply it provisionally. I say only
"provisionally", because we can adopt final application only with
the approval of the French Parliament.
However, we have not the intention to ask for the approval of
our Parliament before the World Conference -firstly, because it
might meet with very serious objections on the part of the members
of our Parliament if we seek the application of a text which has
not been finally approved by the World Conference, and secondly,
because it would put the French Delegation at the World Conference
in a difficult position. Indeed, the French Delegation at the
World Conference would not be in a position to accept the slightest
modification of the Charter if the Charter were approved by the
French Parliament. Therefore , we can apply this Agreement only
proves finally and seek the approval of Parliament at a later stage.
However, after having listened to the statements made by
several Delegations, I wonder if even a provisional application V 20 E/PC/T/TAC/PV/1
is possible, if only a limited number of Delegations are ready
to apply this Agreement provisionally. I believe that It is
necessary to achieve the agreement of the majority of the
countries represented here, in order to make this provisional
Agreement workable. Indeed, we would meet with the greatest
inconvenience if we had only five or six signatures to the
provisional Agreement. E/PC/T/TAC/PV/1
E.E. Mr. WUNSZ KING (China): At this early stage of our
deliberations I do not propose to go into details, nor do I intend to
commit myself to anything definite, even in a provisional way. I
wish first of all to add my tribute to the Tariff Working Party for
having prepared and produced this admirable document. I say it is
admirable only a provisional way. We are all agreed on this point,
that in accepting and signing this Tariff Agreement we would be under-
taking some very important obligations with far-reaching consequences
in the economic and commercial spheres. As to that, we are all
agreed, We are also agreed that in so doing we would, be making an
experiment which is really unprecedented in nature, for the under-
taking is not only limited to the reduction of tariff rates, but also
serves as an acceptance,- even in a provisional way - of certain ob-
ligations or the principles of certain stipulations which would
subsequently be contained in the Charter and be finalized at the
World Conference in Cuba.
I am wondering whether we could put into force, even in a
provisional way, these principles of certain stipulations which have
not taken definite form. Can we put them into force before we attend
the World Conference in Havana? I am not in a position to argue
with the United Kingdom delegate whether the word "provisional"
actually means provisional in its full force, but only "provisionally
provisional". Experience has taught us that there would not be very
much difficulty in having a provisional arrangement become quite
definite.
I appreciate all the mechanical, practical and legislative
difficulties which have been mentioned by my colleagues, because we
in China are no exception in this respect. We also have our
difficulties, and now that the new Chinese Constitution is in the
21
M 22 E/PC/T/TAC/PV/1
process of being put into force, we do anticipate some peculiar
legislative difficulties in our case with respect to this Tariff
Agreement, as well as with respect to the future Charter of the
I.T.O. Therefore, we feel that the Chinese Government must be given
sufficient time to examine the documents as a whole and to consider
its final position in respect of certain stipulations, or their
principles, which would be put into force before the coming into
force of the Charter itself, and which the Chinese Govern-
ment has, I am very sorry to say, not seen its way up to now to
accept in their present form.
I really am not in a position to say when the Chinese Government
will authorise its representative even to initial this Tariff Agree-
ment, not to say sign it definitely, unless the way is cleared in
such a manner as to enable the Chinese Government to give its authorisa- .
tion. My mind is open as to what should be the way, or ways, by
which the Chinese Government (and I suppose some other Governments
also) will be enabled to authorise its representatives either to
initial or to sign the documents, I should think, however, that
one of the ways - tentatively at any rate - would be that suggested
by the Norwegian delegate. He, if I understand him correctly, thinks
that the best thing to do in the circumstances would be to incorporate
in this document only Parts I and III, but not Part II. That
suggestion seems to be quite helpful Another way of doing it would
be. - if I understand the United Kingdom correctly - to sign the docu-
ment with reservations attached to the signatures. As I say, my
mind is open and I have to think it over and recommend the ways to
my Government for consideration. 23
CHAIRMAN: The-next speaker on my list is the United Kingdom
Delegate. He has asked for permission to give an explanation of
his remarks, as asked for by the Chinese Delegation, so I will
give the United Kingdom Delegate the flo r.
Mr. HELMORE (United Kingdom): Thank you, Mr. Chairman.
It occurred to me that possibly I spoke in a rather compressed
fashion when I referred to signature with reservation.
I was not thinking of a signature which would reserve a
particular point in the Agreement, because then we should not all
be signing the same Agreement, I was thinking of a signature on
the said 30th September in Geneva, which would be asubject to a-
reservation that the signature was ad referendum, and that would
be one method I was suggesting of meeting the point made by the
Australian Delegate, that his Government would reed to have time
before, so to speak, the signature could become fully operative;
but it would be a signature to the Agreement as a whole.
CHAIRMAN: The Delegate of China.
Mr. WUNSZ KING (China): Mr. Chairman, I feel very grateful
to Mr. Helmore for his explanation on this point; but still,
I have to come rather to the conclusion that there is no meeting
of minds between him and myself.
CHAIRMAN: The Delegate of the United States.
Mr. WINTHROP BROWN (United States): Mr. Chairman, I think
that we are undoubtedly all agreed that it is imperative that
we place the tariff concessions which will have been agreed at
this Meeting into effect at the earliest posible date.
In the first place, it is obvious that the sooner we can
get these tariff concessions in to operation, the sooner their,
beneficial effect on trade will be felt, and it is certainly
important that we try to help trade between ourselves and the rest
E/PC/T/TAC/PV/1
G 24
of the world as quickly and as. effectively as possible.
I think we would. all be agreed, also, that it would be
extremely difficult to keep these tariff concessions which we
have agreed here, so to speak, on ice, or in the closet for any
substantial period of time. The items agreed upon would be
bound to become known partially, and. a tax would be laid on the
Agreement based upon imperfect knowledge of the sum total of the
Agreement, and a very difficult situation would be presented for
all of us.
I think it is also clear that tariff concessions can be put
into effect only in connection with a certain minimum number of the
so-called. General Provisions which are necessary to protect
these concessions, and to give them validity and meaning.
That, of course, is the reason why the Tariff Negotiations
Working Party has recommended.. the inclusion in the General
Agreement of certain of the provisions from the Charter, namely,
those in Part II. I mention that point because it is a suggestion
made by the Delegates from Norway and. China that we might
proceed by putting Parts I and III of the Agreement into effect,
but not Part II into effect.
I am quite sure that it would not be possible for most of us
to put tariff concessions into effect, unless they were protected.
by a minimum, number of General Provisions, and for our part, at
least, we feel that the ones recommended by the Tariff Working
Party represent that minimum. I think it is also extremely
important that we come to the maximum measure of agreement here
at Geneva. We had always hoped. and expected. that the General
Agreement would be signed definitely here.
We, of course, are in a somewhat similar position to many 25
of the other Member countries here, in that when our
negotiatons have completed their negotiations, we must submit
the results to our Cabinet and. President, for his final
approval.
Our particular situation is such that we can do that very
rapidly, and we had felt that the two or three weeks necessary
for the so-called. 'tidying-up' process would. be sufficient to
enable us to get that necessary approval. We had hoped that.
that would also be true for other countries present.
However, from what the Delegate from Australia and some
others have said., it wolud. appear that that period of time
might not be sufficient,
E/PC/T/TAC/PV/1 S E/PC/T/TAC/PV/1
Therefore we must consider what other line we can follow:
whether we should follow the sugestion of the Australian
Delegate and initial the Agreement here to fix the text, and
fix a definite date for signature, say, about the 1st or
the 15th November, or oven the 21st; or whether we should
endeavour to get the signatures of the countries which are
represented on the Tariff Working Party and which can sign
on September 30, plus as many others as are in a similar
position, leaving a period, say, until some time in November,
for other Governments, who have to take further time for consult-
ation, to sign.
We are quite prepared to examine any one of those
alternatives, to see which one can best meet the needs of the
Members. I cannot urge too strongly, however, the importance
which we attach - and which I am sure all of us attach - to
having this Geneva Conference come to the most definite
possible conclusion about the General Agreement and the
tariff concessions, It would be most unfortunate if we should
be in a position where we reach a tentative agreement here
and start negotiating all over again at Havana or at Lake
Success in November. That we must avoid at all costs.
I wonder, Mr. Chairman, if it would not help us in
reaching a conclusion as to what course we should pursue if
we could get an indication from the Members present as to how
many of them are in the position which we in the Triff Working
Party are in, of being able to sign at Geneva and bring the
Agreement provisionally into force, say, before the end of the
year, and how many are in the position of the Australian
Delegation, who will need a longer period, say, until the
middle of November, before they will be able to sign the
agreement. S E/PC/T/TAC/PV/1
I would also like to add our voice in support of what the
Delegates of Australia and the United Kingdom have said about
the extreme importance of having the publication of the details
of the Agreement take place simultaneously in the capitals
of the Members represented here. The details of this
Agreement should not be made public until they are made
public by all of us at the same time,
I would also like to stress the importance of fixing a
definite date by which the concessions will come provisionally
into affect, and I would hope, as a Christmas present to the
world - which needs such presents very badly, that that
certainly could be settled before Christmas. 28
E/PC/T/TAC/PV/1
CHAIRMAN: The Delegate of Chile.
M. F. GARCIA OIDINLI (Chile) (Interpretation): Mr. Chairman,
I would like to make several remarks, which are, perhaps,
somewhat beside the main question but which are, nevertheless,
intimately connected with this debate.
We are supposed to accept Parts I and III, or rather we are
expected to discuss Parts I and III of this Draft agreement, but
we are not supposed to discuss Part II of the Agreement for the
very obvious reason that Part II actually reproduces Articles of
the Charter and the Charter is not yet finally approved. But,
Mr. Chairman, if I look at the first Part of this Draft Report I
see that it mentions there Articles 1 and 2 of the Charter. Now,
if I revert to Part III of the Report I find there Article 38
which is also a part of the Charter. Now, Mr. Chairman, if we
decide not to discuss Part II of this Report since it reproduces
Articles of the Charter, then we must also wait until the Charter
is approved before we discuss Parts which reproduce certain other
articles of the Charter. The reasons which are being put forward
in order not to discuss Part II must also be true for the Articles
which are reproduced in Parts I and III of the Report. I might
add further, Mr. Chairman, that articles 14 and 38 which are
mentioned in the Report have not yet received their final draft -
they were referred to the sub-committee on Chapter IV, and we
might be assured that they will not leave the sub-committee on
Chapter IV in exactly the same shape as they entered it. The
am
same might also be true in respect to Article 32 - although I/less
affirmative in respect of this article - and, as you know, there
exists an amendment to Article 32- an amendment which was also
referred to the sub-committee on Chapter IV. 29 E/PC/T/PAC/PV/1
Therefore, Mr, Chairman, if we want to be logical and if we
want to remain in conformity with the decisions of the Chairman's
Committee, we must leave out of our deliberations the Articles of
the Charter which are mentioned in Parts I and III of the Report.
Therefore, we must concentrate our discussion on the present
development, and in this connection I would like to draw the
attention of the Committee to the French translation of paragraph (b)
of Article XXXII - I say intentionally "translation" because I do
hope that there is a mistake of translation and that we are not
faced with a different French version. Indeed, we read in the
French text "Part II of this Agreement to the fullest extent...
The other signatory governments, and the above-named governments
in respect of any territories other than their metropolitan
territories.....". Now, Mr. Chairman, if I remember my school
logic and my school French, I understand from this paragraph that
the parties signatory to this agreement undertake to apply Parts I
and III of the agreement and Part II to the extent at which it is
compatible with their legislation to all territories other than
their metropolitan territories. I expect that there is a drafting
error in the French text, but I must call the attention of the
Secretariat to the permanent neglect which is shown to the French
text. It is a pity that it is I who must point this out - it would
be the right of the French-speaking delegations, but since they
have not done so and since, apparently, they work on the English
text., I fear that it is my duty to draw attention to this mistake.
I do hope that the English text has been drafted differently,
because if this were not the case then I respectfully submit that
our whole discussion lacks sense. 30 E/PC/T/TAC/PV/1
Now, Mr. Chairman, I under tand that the Chairman made
the proposal that in order that certain parts of the Provisional
Agreement could become applicable, it is necessary to have a
certain minimum of countries which declare themselves in a
position to apply this Provisional Agreement from a certain date.
However, the text which is submitted for our attention is
altogether mute on this point, and leaves no open door. The
text only signifies that the five members of the Working Party
as well as all other possible signatories of this Draft
Agreement undertake to apply Sections I and IIof this Draft
Agreement, as well as Part II to the extent where it is
compatible with their legislation. But nothing is said about
the necessary minimum in order to render this Agreement
operative.
I believe that the idea which was propounded from the Chair
in this connection is a sound one, and ought to be adopted by
us. I should even say that it ought to be made a condition of
the provisional application of th :. Draft Agreement.
Now, insofar as we are concerned, Mr. Chairman, I wonder
whether we will be able to apply the provisions of this Draft
Agreement as from 1st November. Indeed, it is proposed that
an Agreement to be signed on 30th September should become
operative on 1st November. It is, however, a multilateral
Agreement. Therefore, we must take account of the possible
repercussions on the economic relations of the countries applying
this Agreement with all other countries which are not parties
to the Agreement. We must also take into account the possible
implications of this Agreement in regard to the legislation
of the countries concerned.
It is quite possible that certain provisions are not in
V V E/PC/T/TAC/PV/1
conformity with the legislation of the countries concerned,
although they are not directly incompatible with this
legislation.
We must also consider the possible implications which
this Agreement might have in regard to the policy of taxation
whit is pursed. by the countries concerned, and we must
consider whether it is possible for the countries concerned
to iron out in a month ' time all budgetary difficulties
which might arise in connection with this Agreement.
Therefore, Mr. Chairman, I must provisionally reserve the
-answer of our Delegation to your query.
CHAIRMAN: The Delegate of Chile has called attention
to certain inaccuracies in the French text. I might inform
the Committee that the. French and Belgian Delegations are
very much alive to certain of these inconsistencies between
the French and English texts, and we received this morning
a statement from the French and Belgian Delegations correcting
certain parts of the French text. This will be issued as a
corrigendum.
With regard to thc particular sentence to which the
Delegate of Chile referred, there is a serious error in that
paragraph in that the qualifying phrase "in respect of any
territories -ther than their metropolitan territories" should
relate only to the above-named Governments, whereas in the
French text it roads as though it refers also to the other
signatory Governments. The Secretariat will issue a
corrigendum correcting various other inconsistencies between
the French and English text-and will also correct this
particular part of the French text.
With regard to the other point mentioned by the Chilean E/PC/T/TAC/PV/1
Delegate, it is true thet Articles I and II of Part I embody
substantial parts of Articles 14 and 32 respectively of the
Charter, and also that Article XXXII, Part III, embodies
substantial parts of Article 38 of the Draft Charter. I
might mention, however, that Part I is an essential part of a
General Agreement on Tariffs and Trade. It is, the part that
gives effect to the tariff concessions, and therefore it has
quite a different character from Part II.
The same applies to Article XXII, which reproduces
Article 38. It has been out in Part III because that seems
to be the most logical place for it; but it is a provision
without which the tariff concession could not be applied.
We have now reached a time at which it will. be necessary
for us to-adjourn - it is after one o'clock - and I therefore
propose that further discussion be postponed till tomorrow.
If he wishes, I will give the Delegate of Chile the floor
first things tomorrow.
It is only possible for us to schedule three meetings
this week -that is, this morning, tomorrow morning: and Thursday
morning. The programme on Friday is so full that I do not see
any possibility of scheduling a meeting of this Committee.
I had hoped that it might be possible for us to get through
the general discussion on the three mornings allotted to us
this week, and that we might be able to proceed next week to
take up the particular Articles in Parts I and III of the
Draft Agreement. However, it is too early a stage in our
deliberations to know whether or not it will be possible for
us to get through the general discussion this week, and
therefore I propose that we should continue tomorrow at 10.30,
after which we can take a decision as to our further programme
of work. There being no further business, the. meeting is
adjourned. (The. meeting rose at 1.10 p.m.)
V |
GATT Library | bz883pq8207 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Forth Meeting of the Tariff Agreement Committee Held on Wednesday, 20 August 1947 at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, August 20, 1947 | United Nations. Economic and Social Council | 20/08/1947 | official documents | E/PC/T/TAC/PV/4 and E/PC/T/TAC/PV/1-4 | https://exhibits.stanford.edu/gatt/catalog/bz883pq8207 | bz883pq8207_90260008.xml | GATT_155 | 9,488 | 57,195 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/TAC/PV/4
20 August 194 7
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
FORTH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON WEDNESDAY, 20 AUGUST 1947 T 10.30 A.M.
IN THE PALAIS DES NATIONS.
Hun. L. D. WILGRESS
(Chairman)
GEZIEV1L.
(Canada)
Delegates wishing to make corrections in their speeches
address their communications to the Decuments Clearance
Room 220 (Tel. 2247).
should
Off ice,
Delegates are reminded that the texts of interpretations, which
do not pretent to be Luthentic translations, are reproduced for
general guidance only; corrigenda to the texts of interpretatios
connect, therefore be accepted.
NATIONS UNIES V 2 E/PC/T/TAC/PV/4
CHAIRMAN: The Meeting is called to order.
Members of the Tariff Agreement Committee will remember
that at the close of the last meeting we stated that we would
take up the Articles of Agreement in Part III one by one.
However, since that time we have received the amendments to the
Draft Agreement which have been submitted by the various
the
delegations and it has seemed to meas Chairman,and t /Secretary
of the Committee,that it would be more practical and would
facilitate our general approach to this whole question of the
General Agreement if we had a further discussion and endeavoured
to resolve certain fundamental issues which have come to light
as. a result of the discussions which took place in this Committee
at the meetings we have already held and as a result of the
amendments which have been submitted by the different delegations.
Accordingly we propose as a working paper for the Committee
document E/PC/T/W/301 which was issued, on the 15 August. This
document seo.: forth-seven basic questions which we thought it
would be useful for the Committee to discuss one by one with a
view to obtaining the sense of the Committee with regard to these
basic issues, and if we could clarify them it would greatly
expedite our work when we come to consider the various Articles
of the Draft Agreement.
It is necessary, I think, that we should, when we take up
these seven basic issues, Limit the discussion Strictly to each
issue as we take it up, and that Members of the Committee should
refrain from :: ferring to the other issues and confine themselves
strictly to the issue that is under discussion. Otherwise, we
may be in danger of wandering over too great a field and not
serving the purpose of this Working Dape', to clarify these seven
basic issues,
As we proceed, we might find difficulty in reaching finality on one or. several basic questions, and it might be ill-advised
at this stage to come to a definite decision-on these issues.
That, I think, we can only judge as the discussion proceeds
but our effort should be to try to reach as much finality as is
possible, so that when we come to consider the various Articles
there will not be a resumption of the general discussion on these
basic issues. I trust that the procedure I have outlined is
satisfactory to the Members of the Committee.
Do any of the Members of the Committee wish to comment on
that procedure?
If no Member of the Committee wishes to comment, I take it
that the procedure outlined is adopted.
The first of the seven basic questions will be found on Page 2
.of our Working Paper. It is headled "Submission of the Agreeent
to the Economic and Social Council for approval". This question
has been raised by the Czechoslevak Delegation in Document
E/PC/T/W/274. During the course of the discussion, the United
Kingdom Delegation pointed out certain facters which are set forth
on page 3; out otherwise during the course of the general debate
there was not any definite expression of views on this question,
and I think it would hell in clearing the air if we had a
discussion on this particular matters Does the Delegate of
Czechoslovakia wish to speak on the subject?
H.E. Z . AUGENTHALER (Czchoslovakia): Mr. Chairman, we
think that there are two possible ways of dealing with this
matter. One is that we sign and put into force an international
treaty for the reduction of tariffs. In that case,. we. would not
need to have in mind any prior consultation with the Economic and
Social Council, because such a treaty would be registered with
United Nations and it would onter lnto force.
On the other hand, if we are creating here a kind of permanent
E/PC/T/TAC /PV/4 V 4 E/PC/T/TAC/PV/4
or semi-permanent institution, I think we should seek the advice
of the Economic and Social Council, because it would be rather as
if we were creating a new specialized agency for customs questions,
and not only customs questions, but also related matters-all the
more so if those Articles concerning the Economic and Social Council
should be included in the Charter we are drafting. In that case,
we think it would be wise to seek the prior consultation with the
Economic and Social Council.
Mr. Winthrop BROWN (United States): Mr. Chairman, we are, in
our tariff negotiations here, coming to an agreement with respect
to tariffs and preferences, and also with respect to certain
``channel'' provisions which are related to the matter of tariffs and
preferences, and which are necessary to provide a proper protection
and setting for the tariffs and preference schedules.
Certain of those provisions will require consultation between
the parties to the Agreement, for their administration, in certain
cases, and therefore we provide a machinery by which that
consultation can take place - in other words, the Committtee which
is referred to in the Agreement. This is not creating a new
international organization, but is providing a machinery whereby
the parties to this Agreement can properly administer it, are
it therefore seems to us that there is no necessity for submitting
this Agreement to the Economic and Social Council.at all.
CHAIRMAN: The Delegate of South Africa.
Dr. J.E. HOLLOWAY (South Africa): Mr. Chairman, I do not
think that we need spend very much time on this issue. I know
of nothing preventing my country from entering into trade
agreements on a multilateral basis with other countries. If V 5 E/PC//T/TAC/PV/4
there is anything like that in the charter of the United Nations,
I am not aware of it. That may be ignorance on my part. But if
I am correct on that point, it does mean this: that if there is
a motion that this Agreement should be submitted to the Economic
and Social Council, that motion must be an unopposed motion. It
must be unanimously agreed to, because it does involve everybody
giving up some right, and therefore you cannot do it without
having unanimous agreement. For ourselves, we are not prepared
to give agreement to this. E/PC/T/TAC/PV/4
CHAIRMAN: Any other Member of the Committee wish to
speak on this question?
Are there any Member of the Committee who support the
proposal of the Czechoslovak Delegation.
Does the Delegate of China wish to speak?
Mr. WUNSZ KING (China): Mr. Chairman, I have some sympathy
with the point raised by our Czechoslovak colleague. On the
other hand, I also understand the reasons why it is not quite
necessary to submit this to the Econumic and Social Council.
I would like to remind my colleagues that the Chinese Delggation
has presented a rather modest amendment which appears in Doc.W/276,
proposing that the United Na.tions are authorised to effect the
registration of thisAgreement as soon as it comes into force.
Now I am wondering whether, if this amendment is adopted,
it might not be capable of meeting the point of our Czechoslovak
colleague half-way.
CHAIRMAN: The Delegate of Cuba.
Mr. GUTIERREZ (Cuba): Mr. Chairman, I think that this point
is covered by Article 102 of the United Nations Charter. The
Registration Office of the United Nations is working according
to this provision, and I do not think in every particular Treaty
there is need to insert this proviso - it is a little far from the
suggestion of the Czechoslovak Delegate as to submission of the
paper for approval by the Council.
CHAIRMAN: It would appear that we have completed discussion
on this subject. There does not appear to bo any measure of
support for the proposal of the Czechoslovak Delegation. On
the other hand, as the Chinese Delegate has pointed out, it will
be necessary to submit the Agreement for approval to the United
6
G E/PC/T/TAC/PV/4
Nations, and the Cuban Dlegate says there is an obligation
on all Members of the United Nations under the Charter; and
that, I think, makes the relations of the agreement to the
United Nations quite clear.
I therefore think we can pass on to the text item on our
agenda, and take it that the Committee does not support the
proposal of the Czechoslovak Delegation.
Dr. HOLLOWAY (South Africa): Did I understand you correctly
to say that after agreement has been made it should be sent for
approval to the United Nations?
CHAIRMAN. If I used. the word ``aproval" I meanttregistration",
I should have said that all Members of United Nations are under an
obligation under the Charter to have it registered.
The next item with which we have to deal on page 3 of the
Working Paper is entitled ``Significance of signature of the
Agreement at Genava''. This i s vided in, two parts as there
are two related issues involved here.
"The Australian Delegation has expressed doubt as to the
significance of signature, which it understands implies the
commitment by Governments to introduce ultimately the Agreement
to Parliament with the Governments', support. "This position
of the Australian Delegation is supported by the Brazilian, Indian
and New Zealand Delegations.
In document W/271, the United States Delegation has proposed
an Amendment which meets to some extent the point raised by the
Australian Delegation.
We have also on the bottom of page 4 of W/301 the opinion
expressed by the Legal Adviser of the. Secretariat, and it is
7
G E/PC/T/TAC/PV/4
pointed out that this legal interpretation may dispel some of
the doubts which have been expressed; but if any Delegation
wishes to do so it can protect its position by signing ad
referendum.
The second point which is very closely related to the first
is the question which has been raised by certain Delegations
to the effect that /of the Agreement might/ constitute an
obstacle to discussion of the Charter at the World Conference;
the Syrian-Lebanese Delegation has pointed out that this
understanding concerning signature will not constitute an
obstacle to the freedom of discussion on the Charter at the
World Conference; and we consider it would be useful if the
Committee could reach an understanding in this connection.
I would like first of all that the discussion should be
confined to the first of those two points; and we might then
take up the point given under little tb) here on page 5.
The Delegato of Cuba.
Mr. GUTZERREZ (Cuba): In relation to the first point, the
statements made by several delegations with respect to the'
constitutional limitations of the entering into force of the
General Agreement on Tariff and Trade and the prevailing
uncertainty in connection with the time factor required to secure
the various P-rliamentary approvals moves the Cuban Delegation
to request of the others that they consider the possibility of not
signing the Treaty in Geneva, leaving this f or the last day of
the World Corf erence on Trade and Employment.
The basic reasons which prompt this proposal are, first
that it does not seem practical to insert in the General
Agreement provisions of a Draft Charter of the ITO which would
surely be modified by the World Conference before it should G 9 E/PC/T/TAC/PV/4
become effective. It seems preferable not to repeat in the
General Agreement only some articles of the Charter, but there
should also be inserted in said agreement the obligation of
giving complete enforcement, as far as possible, to all the
provisions of the Charter.
Secondly, the Tariff negotiations have not been able to
reach the stage of coordination necessary to enable the General
Agreement to be completed and signed by all countries represented
in Geneva. The pertinent schedules agreed upon could be initialled
here and then further negotiations continued bilaterally, country-
to-country, in the interval between the Geneva and Havana
Conferences, with the purpose of completing them in the latter
city so that the General Agreement could be duly signed with
sufficient time to submit a complete document for the
ratification of the corresponding legislative and executive bodies
of each signatory party. 10
S E/PC/T/TAC/PV/4
CHAIRMAN: The Delegate of Australia.
Dr. H. C. COOMBS (Australia): Mr. Chairman, I do not
wish to go over again the reasons which prompted the Australian
Delegation to raise this question of the signature at Geneva.
I would, however, like to remind Delegates that it is necessary,
in the light of Australian administrative and political practice,
that neither the j urt2r , Government nor the Australian
Parliament should be committed at Geneva in any way. We have
therefore to ask that we, at any rate, be not called upon to
sign a document in Geneva which carries any implications of
commitment for the Government or the Parliament.
I notice that the Legal Adviser of the Secretariat
considers that this signature which is proposed does not
constiute anything more than an authentication of the text.
I have a profound prospect for the Legal Advisor and a layman's
disinclination to disagree with exports, but, after all, this
General Agreement, in its present draft, starts off: "The
Governments of the Commonwealth of Australia" - etc., etc., -
"have, through their respective representatives, agreed as
follows," Articles I to III, and then, in Article XXXII,the
Governments of certain countries - which may include Australia
- shall, on and after such-and--such date, app?'.y provisionally
the parts of the Charter, etc.; "In witness whereof the
respective representatives. after having exchanged their full
powers, found to be in good and due form, have signed this
agreement and have affixed their seals hereto."
Well, Mr. Chairman, that may be an authentication of a
text but it does not sound like it, and I shall have difficulty S 11 E/PC/T/TAC/PV/4
in convincing my Government, if I affix my signature to that,
that I have not done anything more than authenticate a text,
Accordingly, Mr. Chairman, I find myself dissatisfied
with what is proposed. I do not find much comfort in the
proposal of the United States Delegate which he has put forward
in an attempt to meet our difficulties. He suggests, in effect,
that we should attach a reservation to our signature, to the
effect that it would become effective only when our Government
has given written notice to that effect to the Secretary-General
of the United Nations. I find that subject, to some extent, to
the same complication; that it does imply a commitment, even
if it is qualified in the way suggested.
Another difficulty is that it would, so to speak, put
Australia in a special position, and this is a difficulty which
I find in the solution which the South African Delegate has him-
self put forward. He would sign ad referendum. I agree that
covers the position formally, but I do believe it is undesirable
unless absolutely necessary. There is a difference between
countries, in a way which draws attention to the fact that
certain countries have not behaved in precisely the same way
as other countries. It is capable of being misinterpreted in
two ways: first of all, that they are in some way recalcitrant -
which might, of course, be true - and, on the other hand, it may
be interpreted as meaning that, inffact, they are committed in
the same way as the other countries, and that the attachment of
the ad referendum or the qualification suggested is merely a
device and, in fact; the commitment has been entered into.
We therefore do not like that suggestion. We have, however,
a proposal to put forward which seems to us to meet the require-
ments of those countries who are anxious to attach their signatures 12
S E/PC/T/TAC/PV/4
to this document as quickly as possible, and also of those
countries who feel it necessary that they should, after the
completion of the negotiations in Geneva, formally place this
thing before their Governments for consideration before their
signatures are attached.
At international conferences it is the custom frequently
to have what is called a final act, in which the Heads of
Delegations attach their signatures to a document which records,
in brief terms, what has proceeded and has attached thereto a
text which is, by the signature of that final act, authenticated.
We would propose that at the end of this Conference there
should be a Final Act by which, in signing, the Heads of
Delegations would authenticate the text of the General Agreement.
The General Agreement should then be available for signature at
the Head Office of the United Nations and should remain open
for signature until, in accordance with the tentative timetable,
the 15th November, or before if that is thought preferable,
during which time representatives of the countries here could
sign the document or inform the Secretary-General of the United
Nations that they accept the obligations implied by signature.
That would mean that if one of the Delegations here is, in fact,
in a position to sign this document at the conclusion of this
Conference, he could send a telegram immediately to the Secretary-
General of theUnited Nations, informing him that he was
prepared to sign, of he could ask his representative in that
country to sign for his Government. There need therefore be no
delay, on the part of those countries which wish to sign, in
signing immediately..
We could conclude here on 30th September, as is suggested
in this programme, then their signatures could be attached on that
day or on the first day of October. 13
S E/PC/T/TAC/PV/4
On the other hand, other countries who wish to place
this matter before their Governments would have from then until
the 15th November before attaching their signature.
On the other hand, there would be no distinction between
the action taken by one country or the other. At the con-
clusion of the Conference here, we would all take similar action,
and between that date and the 15th November we would again all
take similar action, on the assumption that we were authorized
by our Governments so to do.
That does seem to me to offer certain very definite
advantages. It does meet the requirements of the countries
which are anxious that their signatures should be appended
promptly and it similarly meets the requirements of those
countries which need delays in order to have this text
examined by their Governments. At the same time it makes
no distinction between them in the nature of the action to
which they are called upon to commit themselves.
I would just like to comment on the suggestion which
has been made by the Delegate of Cuba. I am, of course,
in agreement with the basic proposition which he has put
forward, that there should not be a signature of this
document here in Geneva, but I find some difficulty, Mr.
Chairman, on the assumption that our negotiations here do
conclude by the date forecast, in believing that we could
leave this signature and the publication of the text and the
entry into force of the Agreement as long as the Cuban Delegate's
proposal would imply.
It does seem to me that, once agreement has been reached
here, the time which should elapse between the conclusion of
those negotiations and the publication and entry into force
of the actual reductions in the tariffs required should be
as short as is consistent with democratic procedure. 14
S E/PC/T/TAC/PV/4
Therefore, Mr. Chairman, whilst I have a good deal of
sympathy with the Cuban point of view, I would be anxious, if it
is possible, for us to adhere to a programme roughly corresponding
to that set out in the Schedule, with the variations which I
have suggested.
If I could just repeat those final words; the positive
suggestions we put forward are: that on the 30th September, or
a date approximating thereto, all Delegations should sign a Final
Act at the Geneva Conference which would authenticate the text
of the General Agreement on Tariffs and Trade, and from that date
until the 15th November the General Agreement should be open
for signature at the Head Offices of the United Nations; that
on the 15th November or thereabouts there should be a simultaneous
public announcement, and, furthermore, that countries should be
permitted to put these things into force on or after that date
at their discretion. 15
ER E/PC/T/TAC/PV/4
Mr. WINTHROP BROWN (United States): Mr. Chairman, I am
sorry that our suggestion did not fully meet the point made by the
Australian delegation, but after listening to the delegate from
Australia, I am persuaded that it did not, and it seems to me that
the suggestion which he has made is a very constructive one with
which we would be able to agree.
There is one point, however, that I think should be made clear.
It is, of course, necessary for countries to know in considering
whether they will give provisional application to the Agreement,
how many other countries are going to be able to do it, and if
the Australian suggestion would include that in the final Act, there
would be an agreement suggested in our amendment. that certain named
countries at least would agree to give provisional application to the
General Agreement by a certain date provided that the other countries
had also signed by that time. In that case this suggestion would
be quite acceptable to us.
May I supplement that by saying that we would expect to sign
immediately and we would hope that the other countries which have
already indicated that they could sign at once, and would put it
provisionally into effect by the end of the year would do
likewise, but we should be perfectly
happy for the agreement to be left open for signature by other
countries not able to sign at once.
Dr. H.C. COOMBS (Australia): I do not quite understand the
first/point made by the United States delegate. Does he mean that
Australia, f or instance, by signing on the 14th November would thereby
be undertaking to put the General Agreement into provisional operation
before the 15th December on the assumption that the other countries
did the same? It would, in fact, be our intention to make the 16 ER E/PC/T/TAC/PV/4
Agreement operative so far as Australia is concerned as soon after
the signature date as practicable - as a matter of fact, on the same
day.
Mr. R. J. SHACKLE (United Kingdom): I would like to say -
subject to approval by my delegat ion which I have not yet consulted -
that the suggestion which has been made by Dr. Coombs, together with
the comments made by Mr. Winthrop Brown, seems to me to be the best
proposal which has been made up to now, for our purposes. It is my
impression that we should agree and subscribe to this proposal -
subject, of course, to reference to my delegation.
I would add just this: that as regards the suggestion which was
made by the delegate of Cuba, I feel, as Dr. Coombs has said, that
there would be very serious difficulties if the publication and
enforcement of the General agreement on Tariffs and Trade were
deferred as long as the proposal indicates.
Mr. J. J. DEUTSCH (Canada): Mr. Chairman, with respect to the
Cuban suggestion, we also see very great difficulties In postponing
the matter until after the end of the World Conference.
With respect to Dr. Coombs's suggestion, we find it a very con-
structive one, and we could accept it. We would also, however, like
to have a provision like the one suggested by the United States
delegate, that the Agreement would not come into provisional effect
for any signatories unless the Agreement came into effect also with
respect to certain named countries. 17
J. E/PC/T/TAC/PV/4
DR. H.C. COOMBS (Australia): Could I just ask a question in
regard to that, Mr. Chairman?
CHAIRMAN: Is the Belgian Delegate agreeable to the
Australian Delegate asking a question?
The Delegate of Australia.
DR. H.C. COOMBS (Australia): I just want to mare sure,
Mr. Chairman, that the point made by the United States Delegate
would not prevent one country taking action in advance of others,
provided it was after the date on which the simultaneous announcement
had been made.
As I pointed out earlier, it would be necessary for Aus tralia
to take action on the same day as the announcement was made, and it
might be, in the case of the United Kingdom, from what I understand
of their position, six weeks before the United Kingdom is in a
position to make the Agreement provisionally effective.
I presume that once the text has been made public, the countries
who are prepared to do so are free to implement the Agreement, so
far as their own tariff is concerned.
CHAIRMAN: Speaking as Chairman of the Committee, I would
think that there would be no objection on the part of the other
countries concerned to one country giving effect to tariff
reductions before them, The date agreed upon would
simply be the last date upon which they could give provisional
application - but, of course, I am open to correction by any Member
of the Committee.
The Delegate of Belgium. 18
J. E/PC/T/TAC/PV/4
M. P. FORTHOMME (Belgium) (Interpretation): Mr. Chairman, I
think the proposal of the Australian Delegate extremely reasonable,
and probably the most practical one we have heard so far, but I
have some doubts about one aspect of the question and I would like
to hear what solution can be found to it.
The procedure suggested by the Australian Delegation supposes
that, at the time of the signing of the document, all Governments
concerned will have reached a final decision concerning the
reservations they made to the different Articles contained in the
General Agreement. Therefore, before the time of signing the
document, it will be possible for them, if they maintain their
reservations to have the text re-opened to see what solution can
be found to the difficulties due to the reservation. But if no
final decision is reached before the date of signing, the Governments
will be faced with two alternatives: either they will be in a
position to withdraw their reservations, and then nothing will
prevent them from signing the document, or they will not be in a
position to withdraw their reservation, even if it is a minor one,
and then they will not be able to sign the document.
I would like to know what solution can be fount to this
difficulty.
CHAIRMAN: The point just raised by the Delegate of Belgium
is a most important one, and it is one to which we will have to
give very careful consideration. However, I think it would be
better if we could defer discussion on this particular point until
we reach items 5 and 6, because that is where these points can best
be discussed. It would, I think, help the discussion if, for the
time being, we just keep to the question of Significance of Signature
of the Agreement at Geneva. There are, of course, a lot of 19
J. E/PC/T//TAC/PV/4
questions to be raised on Significance of Signature at Geneva, but
we will try to deal with them under the points we have provided for
in this Agenda.
The next speaker on my list is the Delegate of France.
M. ROYER (France) (Interpretation): Mr, Chairman, I would
like to ask the Delegate of Australia for a clarification.
The proposal he made aims only at introducing an additional
stage in the procedure of signing at Geneva. Otherwise, the
procedure provided for in the Australian suggestion has exactly the
same effect as the procedure provided for by the Working Party
Draft.
However, there is an obscurity here. I would like to know
the date on which the names of the countries who are prepared to
implement the Agreement provisionally will be inserted in
Article XXXII, or in any other part of the Charter. I think it is
important - and the French Delegation has expressed the difficulties
of implementing the Agreement - if only a smell number of countries
are party to it. I would like to know at what time we will know
which countries are prepared to implement it provisionally before
December 15th.
CHAIRMAN: Would the Delegate of Australia care to reply to
that?
DR. H.C. COOMBS (Australia): As I understand it, other
countries would know which countries had signed the General Agreement
provisionallly as they signed, and they would know, therefore, by
the 15th November, how many had agreed to implement it by the
15th November. They could then decide whether there were a sufficient
number who had signed to warrant taking the action which they had J. 20 E/PC/T/TAC/PV/4
agreed to take, which their signature implied their willingness to
take, so that if, on the 15th November, the Government of France
found that there were X countries which had agreed, which had
signed the General Agreement and had therefore undertaken to make
it provisionally operative on the 15th December, and they believed
that X was sufficient for their purposes, they could go ahead.
On the other hand, if they felt that the number was not
sufficient, or that it did not include countries which were
essential from France's point of view, then they could abstain from
making it effective.
That, as I understand it, is the purpose of Article XXXII: to
give you a clear right to take back the obligation implied by your
signature, if corresponding action is not taken by other countries.
CHAIRMAN: The Delegate for Cuba.
DR. G. GUTIERREZ (Cuba): Mr. Chairman, if the Cuban Delegation
had not had very serious doubts of the legal and juridical
possibilities of what we are trying to do, it would not have presented
for the consideration of the other Delegations the problem it has
presented.
I am very sorry to state that, according to my experience as
an old student of international law, I do not see what difference
exists between the Final Act to be signed and the Treaty. According
to the decision of the International Court of Justice, treaties
are undertakings of obligations and rights, and whatever we call it -
a protocol, agreement, final act or anything else - it will always
be a treaty.
I do not want to go into the technical discussion of this
matter. For us, it is the same final act in this type of treaty 21
J. E/PC/T/TAC/PV/4
as the Delegate of France has just said so ably, and I do not know
what kind of treaty is this one that stands by Article XXXII when
it takes up the question of Provisional Application. There are
four Governments that can apply the provision, and if they want to
call that a multilateral treaty between four nations, that is all
right, but if it is supposed to be the basis of a treaty to be
open to the rest of the world, that is quite different, especially
when you take into consideration that they will apply provisionally
only Parts I and III of the Agreement, that is to say, eleven
may be
Articles, leaving out twenty-two which / going to be modified by
the World Conference, and the whole Treaty is not going to enter
into force until next year. E/PC/T/TAC/PV/4
It seems more practical not to rush this matter in that way,
but to have the draft Charter approved or modified, and have a
definite text, and then have the whole document in force at the
same date, because according to our suggestion, it will not make
any difference at all when the obligations enter into force: they
will enter into force the same day. The only difference would
be that in one case we would have a complete legal backing, and
in the other case we would be making circles around a problem
without giving any real decision.
That is the only point to which we want to call the atten tion
of the different Delegations assembled here, because it seems to
us that we are overlooking the juridicial aspect of these
obligations. Final Acts generally do not mean obligations upon
the Governments: they are only recommendations; and if they
place obligations upon the Governments, they are no longer final
acts - they are treaties.
CHAIRMAN: The Delegate of the United States.
Mr. Winthrop BROWN (United States): Mr. Chairman, first
may I say that I entirely agree with your statement that provided
there is simultaneous publication and entry into force of the
document, there would be no objection if there wore some
differences in the actual time at which they were put provisionally
into force, provided there was a date before which that must be
done.
I think the point made by the Delegate of France is an
important one, and for our part, we would like to have it
definitely decided, before we begin the final act, as to which
countries are the so-called "key" countries: in other words,
that we should have an agreement before we leave here that certain
V
22 V 23 E/PC/T/TAC/PV/4
countries making an adequate trade coverage would put the
Agreement provisionally into force by the dates selected,
provided sufficient other countries to make up that coverage,
and including certain key countries, had done likewise.
We feel, with the French Delegation, that it is important
that that be fixed before we leave the matter.
As far as the point raised by the Cuban Delegation is
concerned, I would like to add our Delegation's support to the
points made by the Delegates of Australia, United Kingdom and
Canada, about the extreme difficulty which would be involved in
having a prolonged time between the conclusion of negotiations
here and the entry into force of the General Agreement.
CHAIRMAN: The Delegate of Australia.
Dr. H.C. COOMBS (Australia): Mr. Chairman, I would like
to refer to two points which have been raised. The first is
the question of key countries. I quite agree that the countries
are entitled to be able to anticipate what is going to be done
by the key countries, but it seems to me to be impossible for
key countries to give an undertaking here in Geneva that they
will make this Agreement operative by the 15th December,
and it is the purpose of the procedure which we have outlined
to avoid that.
I think that the position is quite adequately met if here
in Geneva the countries which are agreed to be key countries
will undertake to give a decision; and as they will undertake
to give a final decision by the final signing day, that will
mean that if the decision of their Government is a favourable one,
other countries will know that they are coming in by the final
signature date, and then it will be possible for all the other
key countries to know definitely whether their requirements for 24
V E/PC/T/TAC/PV/4
provisional operation are met.
The thing to be avoided is uncertainty as to whether all
the key countries are, in fact, going to be in; so that all
we need is an undertaking from any country which is regarded as
a key country that it will reach a decision by that date. I am
not sure if Australia is classified as a key country for this
purpose, but we are prepared to give an undertaking to reach a
decision by that date, and I think that is as much as we can be
asked to do.
The other point was the nature of the Final Act. I am not
a lawyer, and I have very little experience of international
conferences, Mr. Chairman, but it seems to me that in this matter
we can make the Final Act what we like, and what I had in mind
was that the Final Act would be a brief outline of what had taken
place in descriptive terms, and a statement that the Delegations
here represented had agreed upon the texts attached, which would
be submitted to their Governments for their consideration. If
that is the nature of the Final Act we want, then it seems to me,
Mr. Chairman, that we are fully capable of seeing that it takes
that form.
CHAIRMAN: I think we have had an extremely useful
discussion of this point 2 on our Agenda, and the discussion so
far has advanced the ideas on this question. Do any other
Delegates wish to speak?
Dr. A.B. SPEEKENBRINK (Netherlands): Mr. Chairman, as my
instructions and powers are at present, the Netherlands Delegation
will be able either to intiial or to sign an Agreement at the end
of the Geneva Session.
I am speaking on the basis of the present discussion, and
I am entirely in agreement with either the proposal of Dr. Coombs
or the ideas of Mr. Winthrop Brown, so I await the development of
our discussions. I would only like to point out that when we have
to sign, we will, in the first place, sign on behalf of the entire
Kingdom of the Netherlands, including all its overseas territories. E/PC/T/TAC/PV/4
There again, with regard to our Tariff concessions you will
find this position, that for the Metropolitan territory our
signature will be connected with that of Belgium and Luxemburg,
because it will be a Benelux concession for a customs union.
For the other overseas territories, we might have to make
certain reserves, as, as you know, the Kingdom of the Netherlands
is in course of re-construction, and so there may be a day when
we declare/certain territory autonomous in its external and
commercial relations, when they have reached the minimum status.
In that case we will make efforts to have those countries
accept and follow what we have signed. But there might be here
a certain difficulty for which we must make a reserve which in
due course we will work out. This may be a difficulty confront ing
other countries, when we have a long discussion on Tariff
Agreements, so we might also raise this point for discussion in
this Committee.
Mr. RODRIGUES (Brazil): Mr. Chairman, in regard to this
point 2, I should like to state that Brazil would like to follow
as close as possible the Australian Amendment; but our
constitution requires that any agreement before put into force
must be approved by the Congress. We would do our best to get
the approval of the Congress before November 15th; but we are
not in a position to take any commitment with regard to the
action of the Brazilian Congress, and I should like to explain
our position, because if we cannot get approval before November 15th
we will be in a position very different from the situation given
by the Australian Delegate.
Mr. MELANDER (Norway): Mr. Chairman, I take it that the
Australian proposal for a Final Act will mean that the Delegations
25
G 26
G
E/PC/T/TAC/PV/4
signing the Final Act will not bind the Governments of their
Countries legally to anything at all. They will only authenticate
the text of the Agreement. That is their legal obligation.
Secondly, do facte, the Delegations which sign the
Final Act will do so if they consider that they are in a
position to recommend to their Governments to accept as a
binding obligation the obligations set out in the Final Act.
That I take it is the idea of the proposal. If that is
so, I would say on behalf of the Norwegian Delegation that we
would be in a position to sign the Final Act, if we considered
that the General Tariff and Trade Agreement were such that the
Delegation could recommend to the Government to accept it.
That, of course, will depend on the clauses which will be
included in that Agreement.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom): Mr. Chairman, I only have a
small point to make in reference to the position of overseas
territories which are autonomous in respect of the matters provided
for in the Agreement. The position with regard to those
territories will be very similar to the position as stated by
the Netherlands in regard to the Netherlands overseas territories.
The point is that the United Kingdom Delegation cannot
agree to bind those territories which are autonomous in these
respects. It will have to wait for them to decide, and that
will involve a slight modification of Article XXXII as it is at
present provided. That is all I have to say.
Mr. SPEEKENBRINK (Netherlands): Mr. Chairman, when
Mr. Shackle associated himself with my remarks, I think he was
under a misapprehension. I spoke of countries that might receive G 27 E/PC/T/TAC/PV/4
autonomy in the contact of their external and commercial affairs,
or become a Dominion, which at present do not have that status.
Mr. SHACKLE (United Kingdom): I think I did appreciate that
distinction. The position is that some territories, in our
case, are already autonomous as regards this.
CHAIRMAN: The Delegate of South Africa.
Dr. HOLLOWAY (South Africa): Mr. Chairman, I think perhaps
we may make some progress if we just go on really substantial
things, and then let the form be decided afterwards. We have
form and substance a little bit mixed up.
The first important thing is authentication of the text.
That obviously has got to be done, and done by the people who
have established the text. I would suggest that to meat
the convenience of everybody, there should be some time during
which the countries here represented should be able to sign
somewhere or do whatever is necessary just to authenticate the
text. That is the first point which is essential.
I suggest we should have some time for that, because it is
quite clear some Delegations are going to be negotiating right up
to the end of September; and there will be quite a large number
of Delegates who will have finished their work long before and
cannot stand about there kicking their heels, because all over the
world there is a shortage of the type of people who are here, and
their countries require tneir services for other purposes.
Secondly we require a substantial undertaking, which is
to be an undertaking with all the force that is necessary by the
laws of particular countries, to carry out the undertakings in
that text which has been authenticated. Various countries have
various requirements, and we have got to give them time. 28 G E/PC/T/TAC/PV/4
As far as we are concerned I think I have explained that
Parliament must approve, and Parliament will not meet until
January; so that may be it will be January, or middle
February, before our Parliament can consider that text. The
position of other countries is different.
Therefore it does not matter whether the form is signed
or anything else, that instrument has got to be deposited
somewhere where that country can consider it. That raises the
question, are we all going to insist on everyone here carrying
it out before we bring it into force. Well, I think quite
obviously nobody is going to insist on that absolute condition.
If one or two fall by the wayside, I think the rest will probably
still be prepared to go on. Therefore, in that instrument,
whatever you make it, you have got to state that the countries
undertake to bring it into force when not less than so many
have brought it into force, and possibly give a date by which
that can be done. That is or is not necessary according to the
views of Delegations.
point
You have got a third/, which is a subsidiary problem dealing
with the entry into force. The third is exactly the same as the
second, that is, an instrument is required by which countries
undertake to bring the provisions into force provisionally. As
soon as "x" countries have agreed to do that, on the day when
it is announced that "x" countries have done it - off you go!
Those who can will bring it provisionally into force.
Those are the only three points we have to decide. Whether
you sign, or sign ad referendum, or anything of that sort, is
not important. If you get those three things fixed in a
document you have solved your problem. S 29
E/PC/T/TAC/PV/4
CHAIRMAN: The Delegate of China.
H.E. DR. WUNSZ KING: (China): So far as the Chinese Dele gation
is concerned, we shall have no difficulty in signing the Final
Act on September 30th, if by that time the texts of the Agreement
and of the Tariff Schedules are ready.
We understood that the Final Act is actually by no means final
and that the signing of the documents will, as has been pointed out
by the Legal Expert attached to the Secretariat, merely serve to
establish the authenticity of the texts, but I am not sure whether
the Chinese Government will be able to signify its final acceptance
by or on November 15th. This is because of two simple reasons:
first, the legislative procedure might entail a considerable amount
of necessary delay, and, secondly, unless the whole question of
reservations is solved in the meantime, there will certainly be a
great amount of difficulty in this regard.
As to the question of adherence to the provision concerning
Provisional Application, I shall reserve my opinion until we come
to that.
CHAIRMAN: Are there any other speakers?
The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I shall be
very brief. I simply want to make it quite clear that, by
initialling or signing the Final Act, the texts of the Agreement
and of the annexed lists will be established once and for all, and
it should not be understood that the signature of the Final Act
would enable some parties to re-open the text of the Agreement or,
even worse, the tariff concessions. 30
S E/PC/T/TAC/PV/4
After the signature of the Final Act, any country will be able
to ratify it or not, but no alteration of the text will be. possible
without the general consent of all the signatories.
CHAIRMAN: I believe Dr. Coombs would agree with that
interpretation.
Dr. Coombs (Australia) Yes, Mr. Chairman.
CHAIRMAN: The Delegate of Czechoslovakia.
H.E. DR. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, the
more I listen to all these speeches and declarations, the more I
think of Goethe's "Faust", where he says: "Das ist die Flucht
der bïsen Tat" - "the cause of the crime was a bad deed !" - I think
that our bad deed is that we have put in the hundred-years'-old
practices of commercial policy, that is, the bilateral tariff
agreements extended to all countries have a Most-Favoured-Nation
clause. We put it in a footnote, with three provisos or two
provisos on its coffin.
If we did away with this very old practice, I think eighty or
ninety per cent of our difficulties would disappear, because it would
always be open to countries which have negotiated to put the
concessionss into force if they find it convenient to themselves.
If we try, all together, by one stroke, at one moment, to put
them into force, we have either to- wait until the last one is able
to put them into force or we have to revise all our schedules
because, if there were, for instance, only ten countries able to
put them into force, then of course no country would be ready to
put into force unilateral reductions of customs tariffs for those
countries which are not willing to put them into force. 31
E/PC/T/TAC/PV/4
That is why I think we should consider carefully what we are
doing and if we wish to remain in those difficulties, which you
will see are extremely grave and which may make it possible that,
at the end, nothing will remain of the whole Agreement.
On the other hand - at least, I speak for myself - we are all
tired and we would need a certain time to think over the problem
and to consult our Governments. That is why I want to suggest
question of
that we leave now, at this moment, the/tariff agreement negotiations,
that we sleep on it, and that we return to the discussion of this
matter, say, when the tariff negotiations are over, which would be
after the 10th September. Mean while, we would have sufficient
time in which to consult our Governments and to see what are the
possibilities and which way could be chosen. ER 32 E/PC/T/TAC/PV/4
Dr. H.C. COOMBS (Australia): I just wanted, to make a
small point, Mr. Chairman, particularly in relation to the comments
of the delegate from South Africa. It seems to me that we
could agree (1) that .'r.;. should, at the end of the Conference
prepare a document establishing the authenticity of
of Geneva, /the text; (2) that a final date for signature
by key countries should be fixed - such as the 15th November;
(3) that there should be a date on which it is agreed that the
full text would be published simultaneously - such as the 16th
November, and (4) there should be a date on which the General
Agreement would enter into force through provisional application
by key countries - such as the 15th November.
I think all the points are covered, and those countries which
are not key countries and who would find a diff iculty to adhere to
that programme because of constitutional difficulties, would be
able to adhere at any time convenient, consistent with their con-
stitutional necessities.
Mr. WINTHROP BROWN (United States): Mr. Chairman, I agree
entirely with the delegate of Australia.
M. E.L. RODRIGUES (Brazil): The explanation which was just
given by the delegate for Australia is very useful to me, but I
should like to explain our position. Our constitutional procedure
in this case would be to sign the Agreement ad referendum and send
if
it to the Congress. In this case, however,/we .-..... nnot get the
of the Congress
approval/for the 15th November, we would accept another date, such
as June 30th, 1948, and that will cover our position. Otherwise I
will not be able to sign the Agreement because I cannot commit
myself without the agreement of the Congress.
Dr. J.E. HOLLOWAY (South Africa): I suggest that either a
small Committee or theTariff Working Party be asked to draft an
instrument on these lines. E/PC/T/TAC/PV/4
M. PIERRE FORTHOMME (Belgium) (Interpretation): Mr. Chair-
man, I merely want to raise one point. If the date of publica-
tion is appointed for November 16th, that means that no country
able to
will be/submit the Agreement to its Parliament before that date,
because submission to Parliament implies publication.
CHAIRMAN: A very valuable point has been raised by the dele-
gate of Belgium, and we must consider it when we come to the next
item on our Agenda, which is Tentative Timetable of Developments.
Are there any other speakers?
I think we have a substantial measure of agreement among the
majority of the members of the Committee on the proposals which
were put forward by Dr. Coombs in the earlier part of our debate.
I think there is a fairly general agreement that there should be a
document prepared which would establish the authenticity of the
text, - not of the General Provisions but of the tariff concessions,-
and that this document should be signed by all the delegations if
they find it possible to sign it.
I also understand from the elaboration of Dr. Coombs's pro-
posal by Mr. Brown, that those delegations who wish to sign the
document in Geneva could do so, but according to the proposal
of Dr. Coombs the date of signature should be left open to the
date to be agreed upon. We should also agree as to the date of
simultaneous publication, and later on, to the date of provisional
application by key countries. Does the proposal of Dr. Coombs
share the support of all the delegations that are represented in
this Committee? The details will still have to be worked out, and
we will be coming to the principles involved in some of these
details in other items of our agenda. Later on we will have to
proceed to the general drafting. That can either be considered
in connection with the Articles of the Agreement/or if it is the wish
ER 33 EF 34
E/PC/T/TAC/PV/4
of the Committee later on to adopt the suggestion of Dr.Holloway
that the text of the final Act should be drafted, we can do so
but I would suggest that we postpone that for the time being until
we come to the other items of our Agenda and until we see the
whole picture more clearly.
As to the suggestion raised by the delegate of Brazil which
relates chiefly to the provisional application of the Agreement, we
will come to that under point 4.
There has also been the point raised about key countries'
provisional application. We can consider that under point 4.
There is also the important question of the dates. We shall
come to that in our next item, No.3, and we will have a full dis-
cussion on that which will help to clear our minds on that particular
problem, so I think we can leave the discussion on the date of
signature in Geneva. I do think there is general agreement on this
point.
We can go on now to the next point in our Agenda and decide
later on as to what steps we should take to appoint a special sub-
Committee for that purpose.
With regard to the suggestion of Dr. Augenthaler that we
should postpone further consideration of the General Agreement
until we have completed our tariff negotiations, I take it that if we
now
do not/consider the General Agreement/we would have to stay
here another month after we have completed the tariff negotiations,
and this would make it difficult for those governments who are in
the position of the South African Government who want their key men
back. I therefore do not think it is necessary that we should pro
ceed with the suggestion of Dr. Augenthaler and if the Committee 35
ER E/PC/T/TAC/PV/4
agrees we can take up other points in our agenda which are given
in our working paper, at our next meeting.
We have not yet touched point (b) on page 5 which raises the
question as to whether or not the signing of the General Agreement
will constitute an obstacle to the freedom of discussion at
Havana. We shall consider that at our next meeting.
I would now like to hear the views of the Committee as to
whether we should have a meeting tomorrow or postpone it until
next Monday. We could have our meeting on Monday afternoon, or
we could have it tomorrow morning. I have the impression that
most of the delegations will wish to have time to prepare their
statements for the public session, and if it is the wish of the
Commission we shall postpone our next meeting until Monday after-
noon. 36
J. E/PC/T/TAC/PV/4
CHAIRMAN: The Delegate for Australia.
DR. H.C. COOMBS (Australia): I wanted to ask, Mr. Chairman,
whether it is really necessary not to have a meeting tomorrow morning?
We regard this question of the General Agreement as one of very
great importance and of very great urgency, and we would wish,
therefore, to proceed with the discussion of the problems embodied
in it as early as possible I just wanted to ask, therefore,
whether it would not be possible for us to proceed with our
deliberations tomorrow morning?
CHAIRMAN: If there are no objections, we could meet
tomorrow morning at 10.30.
M. P. FORTHOMME (Belgium): I would rather not, Mr. Chairman.
CHAIRMAN: This is a point of procedure on which we could very
well take a vote.
Will all those Delegations in favour of meeting tomorrow please
raise their hands?
DR. G. GUTIERREZ (Cuba): Will that be for all nations, or
only for key nations?
CHAIRMAN: All the Members of the Committee.
Will all those in favour of meeting tomorrow please raise
their hands.
Those against?
I think the energetic Delegations win by 11 votes to 6.
We will meet tomorrow at 10.30 a.m.
The meeting is adjourned.
The meeting rose at 1.05 p.m. |
GATT Library | zq385kh3528 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Forty-First Meeting of Commission "A" (Articles 25 27, 26, 28 29) Held on Friday, 15. August 1947 at 2.30 P.M. in the Palais Des Nations, Genxva | United Nations Economic and Social Council, August 15, 1947 | United Nations. Economic and Social Council | 15/08/1947 | official documents | E/PC/T/A/PV/41 and E/PC/T/A/PV.39-41 | https://exhibits.stanford.edu/gatt/catalog/zq385kh3528 | zq385kh3528_90240207.xml | GATT_155 | 18,966 | 117,330 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/*U /PV/41
15 August 1947
SECOND SESSION OF THE PREPATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
FORTY-FIRST MEETING OF COMMISSION "A"
(Articles 25 & 27, 26, 28 & 29)
HEID ON FRIDAY, 15. AUGUST 1947 at 2.30 P.M.
IN THE
PALAS DES N'TIONS, GENXVA.
M. Max SUETENS (Chairman) (Beligum)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel .2247),
Delegates are reminded that the texts of interpretations, which do
not pretend to be authentic translations, are reproduced for
general guidance only; corrigenda to the texts of interpretations
cannot, therefore, be accepted.
NATIONS NUNES P.
CHAIRMAN The Meeting is called to order.
We shall now take up Articles 26, 28 and 29, which were
examined by a special sub-Committee. The report of this
Committee is to be found in Document E/PC/T/163. The Chairman
of the sub-Committee was Mr. Phillips of the Australian Delegation,
and I call upon Mr.T hilli ps to usbimt his report.
rM.J .G. PHILLSIP (kustralia): ML rChairman, I have the
honou tro submit this report on behalf of the sub-Comamttee.
eYT sub-Comzmttee consisted of the rserce.ntatives of
usAtralisa Canada, Cuba, Czechozsovakia, Friace, the United
Kingdom and the United States of Lemica. In addition, 3r
work was reagtay ehelped by the representatives of several other
Delegations and by the rprcse.-antives of thEIneternational
onetMary Fund and the Intunoeioane Bank iar fRconestruction
and Develpmct.e Wcweere abl to ereach substanti-l aagreement
on Artio6c 26 :d a29. Or Article 28 dealing with xceltionps
from non-discrinnamtion various circumstances ade mit impossible
o retach 'nafl conouscions with tihe time at r diousposal. s
stated in our rzret, pthe text submitted is tentati anrede subject
to furthg coensideztiron by the Govcnmeentzof sthe Djsailongas
concerned. In Particular, thr~ a --aweo portizinobnssquare
brackets in th teaxt, and those we were unable to rroleve in
the tie avamilt16a
E/PC/T//S4A1 - 3 -
However, subsequent to the completion of our Report there
have been further discussions among Members of the Sub-Committee,
and as Chairman I am now able to state that a Document will
shortly be circulated which has the agreement of the Members
of the Sub-Committee and which will remove the necessity for
one of the sections in square brackets - that is the section in
paragraph 3 (h) of Article 28.
I understand also that Discussions among Members of the
Sub-Committee will result in some other proposal being put
forward to the Commission this afternoon which may have the
effect of removing the remaining square brackets, and also of
removing some reservations which are contained in our Report.
On behalf of the Sub-committee I think we should like to
apologise for the fact that these Amendments and new proposals
may come up this afternoon; but it was impossible to deal with
them in the time at our disposal.
I think that is all I need say in introducing the Report,
except to thank again the other Delegations who Participated
in its preparation.
CHAIRMAN: (Interpretation): We shall now take up the
examination of the various Articles, beginning with Aticle 26.
The Delegate of Belgiu.m - 4 -
M. FORTHOMME (Belgium) (Interpretation): The Belgian
Delegation considers that the whole of Article 26 is not very
felicitous in spite of all the work caused in producing it,
and that it would be best to delete it altogether.
Article 26 was exclusively written under the impact of the
immediate post-war period. It is a compilation of methods
in force in 1947, designed to fight with a very limited
success the economic difficulties of 1947, but ought we to
overlook the fact that the Charter is not intended to be
temporary? We should not conceive the Charter as if the
post-war period would never come to an end.
We, too, have also suffered severely, from the war and
understand the anxieties and difficulties which are expressed
in the complicated provisions which are suggested to us.
We do not criticize the methods now used by such-and-such
a Government, which is experiencing difficulties. We know
that these difficulties derive from the huge war effort
accomplished by this country. We know that debts, the policy
of austerity, restrictions on imports and consumption - in a
word, all the economic disadvantages, are the price of
victor, and freedom, but there is a total difference between
the acceptance of a regime of restriction which is the
inevitable result of the war and the approval of texts which
would authorize the continuation or revival of an unhealthy
regime of restriction when we have again a rived at a peace-
time economy. A distinction should clearly be made.
We must make a far-seeing effort; then the dangers will
appear clearly. We shall see that the texts proposed to us
militate against our interests and that they will create the
evils which we have met here to avoid.
EPC/T/A/?PV41 - 5 - E/PC/T/A/PV/41
In the first instance, let us consider the danger of a
parallel action between the International Monetary Fund and
the ITO. In Articles 8 and 14 the Statute of the Monetary
Fund already provides that, when there are difficulties in
the balance of payments, this body is entitled to grant
permission to restrict imports. One might think that if it
was deemed that the question should be dealt with in the
Charter, it is because it was considered that the provisions
of the Constitution of the Fund could be improved. In the
text before us me do not find any improvements, but rather
a considerable regression. Two bodies, two statutes, two
methods of procedure will, from now on, govern the same
matter. The disadvantages are quite striking. We have
thus created all the co-ordination difficulties between
two international bodies.
A few days ago, in the Chairman's Committee, a similar
situation was referred to. Our Commission had voted White
on a question of the right of voting of non-Member States.
Beyond the Atlantic another Council voted Black on the
same question and we find ourselves in a bottleneck - 6 - E/PC/T/A/PV/41
and compelled to appeal to the old diplomacy to find a
compromise. We are compelled to wait, perhaps, until the
Council of the United Nations should arbitrate in such
disputes, with considerable delay, between two bodies which
each have their pride and their esprit de corps.
Do you not think that, in spite of the goodwill of
the people involved, such an opposition may also take place
later between the ITO and the Monetary Fund ? Do you not
think that the prices in business will increase whilst
diplomats, Ministers, and the Council of the United Nations
are exchanging visits and telegrams in an effort to come to
an agreement ? The multiplicity of new international bodies
is a danger and we may well fear that we shall here recons-
truct Byzantium, which was famous in history because, whilst
scholars discussed their theories about the sex of angels,
the enemy was driving through the gates of the city. E/PO/T/A/PV 41
These complicated ,. and indeed, unduly complicated discussions,
will be an open invitation to states who desire to set up an un-
healthy protectionism because theywill be able to play one Charter
against another: the Monetary Fund against the I.T.O., the I.T.O.
against the Monetary Fund, and, in fact, do what they desire behind
the appearance of solem texts. We know that the sab-Committee has
reflected on such a manoeuvre. It tries to oppose it by the subtlct7
of the clause of "non-frustration". Do we really believe that we
can face up to the evil with this bit of drafting, and in the ab-
sence of a remedy would it not be better not to set up or encourage
conflicts of competence between permanent bodies and not to create
a maze favourable to all men of ill will? Is it possible to make
some sacrifice and to think that this lack of organisation is off-
set by considerable advantages brought by the Charter by a real
progress on the provisions of the Monetary Fnd? It will perhaps
be argued that the possibility of discussing within the I.T.O. con-
ference is a remarkable progress; henceforth all the countries
assembled will be in a position to study what commercial measuers
should be takes when a state of alarm has been proclaimed in the
financial field. Wc would agree to atdmidit that thig would be a
progress if immediately after the essential objects wire not deleted
from the subject of the Discussion to leave only speeches on second-
qry aspects. In fact, our Charter creates in th eidsucssions
hunting preserves and priv?at domnins. We f ar that any policy,
as oson as it has been labelled a policy of reconstruction or in-
dustrial development or raising of productivity levels or of ocn-
stant increase of demand for full employment, will be ntake away
from discussions and really made taboo.
We fear that the same will happen as regards the senice
'ormulae as is the case with virtue. You know the eruel words
which were said in this connection: "Oh virtue what crimes
are committed in thy name. " We could similarly say: "Oh,
reconstruction; oh, economic development; oh, increasing demand,
how amny commercial restrictions rae made in your name.!
ER - 8 -
Another restriction of commercial matter is equally and in
the same way taken away the discussion. It will be
prohibited to make referencr to it, except to arrive at platonic
scademic recommendations. I refer to that matter which provides
that frontiers can be immediately closed to everything except to
We authorise, and therefore weu endorso, this selfish and
short-sighted policy which States have been tempted to apply all
the time and which consists in buying only raw materils abroad
and selling only finished products, bearing rich through the
benefits derived from the conversion.
In this first trade Charter, we are restoring the narrow
policy of mercantism , which is condemned by experience, condemned by
economic doctrine for almost two centuries, condemned by a
memorable revolution which took place beyond the Atlantic in 1776. It
which
is necessary to repeat here that imports/are considered as non-
essential for the consumer are considered essential for the
producer. For instance, the importation of wines is superfluous,
but the export of wines is essential for a country of vine growers
which has capital invested in the vines.. The same applies to the
textiles, etc., We can do without them, but the producer country
cannot stop producing and selling them.
The economy of all the countries which are represented here,bon itad brt¾,
i s, depefwell .sother_s for its equinmlibriucm geupoahe exehnk:f
nopn-dQcstmtil -rCta. Thoeroe er;re c nr-osdftisdal pro'uc i
yr evedoped hmoi hl cv -nm econoray The qcualinfia.tifs
cve d citrasogc h..ra 3(c) (ii) is only in appearanced a elusion.
;ciexpenaeasce ,vs shown that syrmblic inrpotation was of no
.J E/PC/T/A/PV/41
help to the industries suffering from restrictions.
To allow a State which is experiencing financial difficulties
to close its frontiers immediately, except for the purchase of raw
materials or investment goods, would create, on the basis of the
Charter, unemployment and financial losses in the territories of
states -
all the neighbouring/. this, without any previous authorization,
without even the possibility of having the matter usefully
discussed later by the International Trade Organization, since the
complaining State will immediately meet a kind of forclosure. It
would be indicated to that State that this discussion is forbidden
under the Charter or that its conclusions woulo be fruitless. We
might, therefore, ask ourselves if the advantage of being able to
discuss commercial measures remains an advantage, since the
discussion will be narrow and limited.
The set-up for those who wish to institute an unhealthy
protectionist regime is, therefore, simple. One builds up as one
likes a balance-of-payments in disequilibrium, one increases it
on imports by some programme or other;- (i) by re-equipment of
roads and railways, (ii) by construction. of houses for the
workers and social installations, and (iii) by town planning
hand
development. On the other/, one restricts exports to lower the
prices and raise the standards of living. Next, the International
Monetary Fund and the International Trade Organization must approve
these plans. Then, one closes one's frontiers to all but raw
materials which are not found in the country.- Finally, should
someone raise an objection, a reference is made to Article 26.
Thus we arrive at the capital mistake in the text.
This article contains a method to create economic depressions.
Pre-war experience has shown that when a country is threatened with
J
- 9 - J.
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balance-of-payment-difficulties, it is neccesary to sound the alarrms
urgently and to warn that by some instinctive reflexes, which are
frequent in the case of panio, it does not take defensive measures
such as are likely to lay the evil upon its neighbour.
Article 26, instead of circumscrbing the source of evil makes
it possible, without any discussion and with the formal
authorisation by the Charter, and therefore with a kind of
injunction from the Charter itself, immediately to spread economicr.IO3
vices. This Charter contanains ma acutoti multipofeliecr mic eono
u.seqalimtriur Arand ,icle 26 is a machinem to aacnuafdusre,a bre.
:r-ropagateco eoucmio isceSm lai io.tu he ones which happened
bweeten 192a9 nd 5l95,a universal fuamentalnd depression which
upset world business anpd oliticalrd oer. V E/PC /T/A/PV/41
We make an urgent appeal to the Commission to realize the
harmful effects of Article 26. We can now see with a certain
unconcern the closing of frontiers, since it will always be
possible to sell elsewhere . Buyers are not lacking. But we
should think of the slippery slope of depression. . The
first State which loses its footing on the balance-of-payments
ascent may, under the Charter, push a second State down. Then
that one will also pull down a thiL one, and, like Alpine
climbers in distress, they will all fall down at an increasing
pace. In a word, it will be a crisis on behalf of the Charter
and in conformity with the provisions of the Charter.
Airticle 26 seems to have forgotten to such an extent
that there may be periods of economic
depression, that it contains in this connection only a narrow
provision at the end of Section 5, when it is provided that
after it has been found that the disequilibrium is general,
a Conference may be convened to advise upon ways and means.
We imagine that this Conference will be more or less like
the one which met in 1933 to study what remedies could be
found for the crisis which had started in 1929 Is it not
feared that once more we shall come too late? Is it not
necessary to provide at least for the obligation to call a
Conference urgently as soon as the germ of the economic disease
is detected in a country, in order to prevent spreading
contagion?
We hope that the Commission will realize that we have
asked, even at a belated time, for a new effort, in order
that we shall not appear later as people who, instead of avoiding
fires, have created a whole machinery in order to spread them,
and have taken every step to ensure -that the fire brigade shall
- 11 -
V E/PC /T/A/PV/41
systematically arrive late.
If we do not delete that text, the Charter, instead of
being a Charter for economic development, will be a Charter
for depression; instead of economic co-operation we shall
have autarohy; instead of a Charter for full employment, we
shall have a Charter of unemployment.
CHAIRMAN (Interpretation): I have listened with the
greatest interest to the statement just read by M. Forthomme.
This statement suggests the deletion of Article 26.
M. Forthomme has raised a number of points, and I think
that if I allowed a discussion to take place now, it would
last the whole afternoon. As we must conclude the examination
of Articles 26, 28 and 29 today, I shall, with your permission,
ask one Delegate, and one Delegate only, to speak in favour of
Article 26. After that, if M. Forthomme insists, we shall
take a vote on the deletion or maintenance of Article 26.
Is there any Delegate who wishes to speak for the
maintenance of Article 26?
Mr. J.R.C. HEIMORE (United Kingdom): Mr. Chairman, I
think that those who have been concerned with the project of
the I.T.O. since before 1945 might be forgiven for supposing
that the Principle of Articlc 26 was generally acceptable to
the Countries which havo been on the Preparatory Committee,
and therèfore if my remarks about it are somewhat impromptu
a
it is for that reason.
Obviously, everyone here who is concerned with the
expansion of international trade must sympathise with the
desire that trade should not be subject to restrictions on
balance-of-payment grounds. But, unfortunately, we know
- 12 - V - 13 - E/PC /T/A/PV/41
that countries are in balance-of-payments difficulties, and
I do not think that anyone here would be prepared to guarantee
that they will not be in balance-of-payments difficulties
again even after the so-called transitional period.
We should, therefore, not be doing our duty if we failed
to provide for a set of rules to ensure that those restrictions
were applied only when necessary, and only to the extent
nacessary. The alternatives would be to allow them to be
appIied whenever anybody thought fit, without any rules,
which would befar worse for international trade - and, I suggest,
for international peace - than Mr. Forthomme has suggested; or
we should not provide for balance-of-payment restrictions to
be used at all, in which case I am absolutely certain there
would be no International Trade Organization.
As so often,we have attacked these difficult problems on
the basis of trying to understand them; trying to see what
it is that causes particular countries to use particular methods;
trying to see what difficulties those methods cause for others,
and *1.t., at a synthesis of that thought in a set of rules
which look cG'Gri er;i itod. It is much better; it seems to me, to
have complicated and reasonable rules which can be understood
after study, than to have no - rules.
Now, I hope Mr. Forthomme will forgive me for suggesting
that he has not realliy digested article 26 in its present form.
It is quite true that, as he says, in the name of development,
social policies and so on (I have said it so often I have
forgotten how it goes now!) a Member can decide priority as
between the various classes of his imports. It seems to me
very strange that if that is so wrong ini the future, the
Belgian Delegate himself should have said that he understood
exactly what it was being done now. Either a country has
foreign exchange resources to buy all it wants or it has not. If it has not the exchange resources to buy all it wants,
then it must buy some things it wants more than others. I think
I have said before in this Commission that it is the habit of
many people who are not in balance of payments difficulties to
assume that those countries which are in balance of payments
difficulties rather enjoy restricting their imports.
I can assure those countries, if there are any, that it is
not at all an enjoyable thing. One buys one's bread before one's
jam, but there is no pleasure whatever in eating dry bread.; nor,
indeed, in knowing the grocer who sells the jam. And we do see
immediately in the sub-paragraph immediately after the sub-
paragraph which allows that order of priority to be drawn up,
that countries which apply the restrictions shall do so in such
a way as to avoid unnecessary damage to the commercial or
economic interests of any other Member.
I do not believe; Mr. Chairman, that those words are there
for fun. They are there as part of an undertaking which we
Suggest countries should comply with, and after all, the United
Kingdom is not only in balance of payments difficulties itself,
it is suffering quite considerably from other people's balance
of payments difficulties, and I have no hesitation whatever in
saying that if other countries were to use their balance of
payments difficulties - as I do not believe they would - to
inflict unnecessary damage on the commercial or economic interests
of the United Kingdom, I should have no hesitation in taking
them up under that sub-peragraph, and I hope that every other
country would do the same, if it similarly thought that
unnecessary damage was being done.
We have some other things, too, in this Article which are
- 14 - - 15 -
worth remembering. In the first place, we do not say that once
you are in balance of payments difficulties you can restrict as
much as you like. We say that When you are in balance of payments
difficulties you can restrict to the extent necessary. It is
an exceedingly important distinction between the blank cheque
once you are in difficulties, and the liberty or licence to do
as much as is necessary to meet with the difficulties; and we go
on and we provide that as you get out of the difficulties the
restrictions are progressively to be relaxed.
We provide many other safeguards. We provide for complaints,
for consultation, and in extreme. cases for a Member to be told that
he must either alter his ways or leave the Organisation; or, as
it says in the Article, he must either amend his ways or have
unpleasant things done to him - which, of course, means the same
thing. That is quite a serious deterrent.
Finally, we provide that if there is persistent and widespread
difficulty, the Organisation itself shall take the initiative to
see what can be done, and I do not think, Mr. Chairman, we ought
to look at this article in isolation. There are many other
things in the Charter which we hope will cure the circumstances
that give rise to balance of payments difficulties. There is the
Employment Article, there is the Draft Resolution which in due
course we hope will go before the Economic and Social Council,
which we drew up in London and omitted to mention at the Geneva
Meeting, because presumably it was generally understood to be a
good Resolution and one which had come forward at the right time.
There we provided for a whole series of types of action designed
to prevent the loss of markets, which may be the first sign
that balance of payments difficulties are going to develop in the
future.
I am afraid, Mr. Chairman, that these have been somewhat
halting remarks, made completely impromptu; but so far as I have
been able to, I have endeavoured to answer the views which have
been put forward. S
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CHAIRMAN (Interpretation): I will ask M. Forthomme
whether he is prepared to reserve his position until we have
concluded the reading of Article 26. Some amendments may be
submitted which may alter the aspect of this Article. Therefore,
at the conclusion of the reading of Article 26 we will ask
M. Forthomme whether he insists on his position.
The Delegate of Belgium.
M. FORTHOMME (Belgium): Mr. Chairman, I do not wish to
hold up this debate and I would be perfectly willing to agree
with your suggestion, but before doing so I would just like
to add a few words. The Commission should not remain under
the impression that in my proposal I had lost sight of the
necessity in which many countries are placed nowadays, through
balance-of-payments difficulties, of adopting exceptional
measures,
In the original speech I made, I mentioned my under-
standing of these circumstances, an understanding ;which is
prompted by the fact that my own country is one of the
countries which has suffered from the war and is, moreover,
a partner in a customs union with a country which has
suffered even more from the war.
it reminds me of Guauctemoc, Emperor of Mexico, who
'was being roasted on the grill with a number of retainers and
allied kings and, when they were all complaining and screaming
at one moment, turned round and said: "Do you think I and
lying on a bed of roses?"
Therefore, before we go on to the debate on Article 26,
I would just like to add this: my proposal that Article 26
should be deleted should not be understood as a sterile and
bare proposal of sheer deletion. I do think that some
E/PC/T/A/PV/41 S - 17 - E/PC/T/A/PV/41
provision should be made in this Charter for this transitional
state of affairs.
I think that the whole of Article 26 is too elaborate,
opens too meany possibilities for abuse, and is of too
definitive a charsoter for the purpose, but I do think thet
the wise thing would be to delete Article 26 and ut in a
provision to deal with the immediate balance-of-payments
difficulties, rather on the lines of the present Paragraph 3(a)
of Article 26 which we have before us. It would then be
possible, later on, for the Organization to study and, in
view of the circumstances which will have arisen, in, say a rear
or two's time, draft a definitive Article in which more
mature principles could be embodied. E/PC/T/A/PV/41
CHAIRMAN (Interpretation): We shall now take up the study of
Article 26, paregraph 1. Are there any remarks?
Paragraph 2, sub-paragraph (a). No remarks?
Sub-paragraph (b)?
Paragraph 3, sub-paragraph (a): sub-paragraph (b).
Mr. L.C. WEBB (New Zealand): Mr. Chairman, I have been
instructed to ask for the insertion of some words "notwithstanding
the provisions of paragraph 2 cf this Article, after (i). I have
circulated the text of this amendment. It is not an amendment of
substance. It merely removes a slight difficulty which we have
found about the word necessary" in 2 (a). It has seemed to us
possible that the word "necessary" must be construed to mean that
the maintenance of import restrictions would not be necessary because
there is after all something else you could do to avoid the mainten-
ance or the institution of those restrictions. That
situation is dealt with in 3(b)(i), but it seems to us that it will
be an improvement to make the matter clear by the insertion of the
words we have suggested to make it clear that the Organisation may
not interfere with certain domestic policies.
Mr. G. BRONZ (United states): Mr. Chairman, paragraph 2 (a)
provides that restrictions may be instituted, maintained or intensified
only to the extent necessary to carry out certain changes or direc -
tions in the monetary reserve position. Paragraph 3(b) (i) says
that assuming that suchrestrictions are necessary "no Member shall be
required to withdraw or modify restrictions on the aground that a
change in such policies would render unnecessary the restrictions...."
It seems to me that 3 (b) (i) is perfectly clear in that respect,
but the amendment proposed by the New Zealand delegation would he
redundant and would probably be unfavourably received by the Legal
Drafting Committee who worked over the text, and I suggest that it is
quite unnecessary, and that the aim the New Zealand delegation
- is - E/PC/T/A/PV. 41
is attempting to achieve is apply covered by the present text.
Dr. A.B. SPEEKENBRINK (Netherlarnds): Mr. Chairman, I have
some difficulty in understanding, this paragraph, and it might be
that some member of the sub-Committee could enlighten me there.
In 3 (b)(i), the same paragraph that the delegate a New Zealand
referred to, it is said "Nu Member shall be required to withdraw
or modify restrictions on the ground that a change in such policies
would render unnecessary the restrictions which it is applying
under this Article." Now later on in the next paragraph, with
which we have not dealt, I would like to ask a question. Under
4 (d) where we have the consultation clause we read: "If no such
settlement is reached and if the Organisation determines that the
restrictions are being applied inconsistently with the provisions
of paragraphs 2 or 3 , and there I get a little bit muddled. If
you say here that "No Member shall be required...." and so on, and
in the next paragraph you say that it is inconsistent with the pro-
visions of paragraphs 2 or 3, is it then not the case tha t a Member
can always say "Well, that is is interference in my domestic affairs,
and you connot ask me that because it is fully consistent with 3(h) (i)
ER
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MR. J. G. PHILIIPS (Australia): Mr. Charman, I do not think
that there is any contradiction between the two things.. In the
view of the sub-committee, 1Ithink, paragraph 4 (d) provides that
if restrictions are held to be in conflict with the criteria laid
down in paragraph 2, or particularly in conflict with the
undertaking in paragraph 3(o) (i), (ii) and (iii), then the Member
can be required to modify or withdraw its restrictions, but
paragraph 3(b) (1) says only that you cannot be required to
withdraw or modify restrictions on the grounds that a change in
your domestic policy would make them unnecessary. I do not think
that there is any contradiction between those things.
If they are necessary in the sense of meeting the criteria on
paragraph 2, if they are administered in a way which is in accord
with the undertakings in paragraph 3(c), then you cannot be
you
required to withdraw them on the grounds that if/adoptl a policy of
deflation or ceased reconstruction, you would no longer be in
difficulties, but if you undertake restrictions which do not meet
the criteria of paragraph 2, or if you breok the undertakings
given in paragraph 3(c), then you may be required to withdraw the
restrictions .
DR. A.B. SPEEKENBRINK EENether- ndsietherMr.a.S): o. amChairman, I
nderstandingriht in pauagraptn,. tha-p r:gh p(i) opfc aaacrah 2sei lly
v-s he praincipparagraphjle ,n in 3 "-r) you havse thie irat
caffeanctsme soferti nb aures, avd if you he cfirast eoffets ndyyu
ca show gato athe Orniz-ion that you really are harmed by this,
then a cathere aiks ose toa ges fnrdom chn i estic policy.
. PHILLIPS 'Al. Jal.a lIS.ust1i): I have not quite understood
the ointMr. pe eeDoes k' SLobrinXmaintain that the ecfirst e;f(
PV/41x T/,,/-''Ql - 21-
of applying restrictions will be to break the undertakings in
paragraph 3( a)
DR. A.B. SPEEKENBRINK (NetherIands): Yes, What I am afraid
of here, Mr. Chairman, is that paragraph 3(b) (i) might make an
escape clause, and so I would prefer to have here "No Member shall
be required to modify restrictions only on the grounds.....".
CHAIRMAN (Interpretation): Gentleman, we have now two
amendments before us, and I am afraid that the second amendment has
made us forget the first one submitted by Mr. Webb. We shall,
therefore, refer to the first amendment.
You remember that the New Zealand Delegation proposed to add
the words "No twithstanding the provisions of paragraph 2 of this
Article" at the beginning of paragraph 3(c) (i) of article 26.
Does Mr. Webb maintain his amendment in the light of thc explanation
supplied by the United States Delegation.
MR.L.C. WEB (New Zolaantd: 2M. Chairman, this is purely
a quastino of ,hothor a corss rcforucnc is desirablo. Mr. Bronz
has su-gcsted that rpobably such a cL ss referancc, owuld, in any
case, be cleetod by the Loeal Drafting rotmmitee, but I mcn not s
sure on that point bcoause thoeunifr= .lipouc of the Lealg Dr.lting
0Cmimttseehs anot eene to suprepss ers osrfuerceucs, utb only to
s uress nouzesarsy cross inreference nda it setsm to s utath this
is a "dsirablto vosbsrf,;roee cin view of the fac tthat there is a
principle established in para>rah p3(b) (i), and tIhink that
ripnacpl-ei s intnaeQdto apply to rapa;phra2( a) at dto this
gqaeztn oof necessity. Therefore, I think that the cross-reference
is desiraleb to mka kthat plina. In other worad, it is Cdsiraleb
to make it plain that no one can cmeo t yoou and say: V"lWl, if
you did not pursue a certain domestic policy in connection with your
economic development and full employment, then you would not need to
apply this restrictions. It seems to me that that is not p-efectly
clear frm othe toet andth, erefore, the cress-reference wo.ld be
useful. E/PC/T/A/PV/41
CHAIRMAN (Interprotation): In these circumstances,
gentlemen, are we agreed that we shall accept the New Zealand
amendment?
Dr A.B. SPEEKENBRINK (Netherlands): Could not we leave
it to the Legal Drafting Committee?
-CHAIRMAnterpretation): Tho question must be
settled here.
Two opinions have been expressed, for and against. Are
there any Delegations against tha amendment?
( fewA Delegates raised their hands).
I conclude that the others are in favour of the amendmet?
The amendment is adoted.
The amendment of the Netherlands Delegate reads: "No Mcbr
shall be required to withdraw or modify restrictions on the sole
ground," etc.
Mr. George BRONZ (United States): Mr. Chairman, want to
return for a moment to the question of the New Zaland amenedment.
I am afraid it was decided on silence by the greater part of
the Dcgtcs preeseente, and hle I diewd not want to go too far
into it, perhaps we oit to gou ag little further.
I am afraid that adding the words as proposed by the
New Zealand Delegate would involve a danger, and that is the
danger trtparagrahaph 3(b)(i) woulcbe consdtrued to mean that
oven if the restrictions are not necessary in the light of
paragrph 2(a), tahey might ncorholCe ebo impoesed.e
when
While/I commented previously I only directed my attenti
to the necessity for the words, in the light of the construction
plaed by the N. -;ala. wDelegate, Ind think it is important
to point out that there is a positive danger that oen if a
V
- 2 - E/PC/T/A/PV/41
country is not losing monetary reserves and is not in imminent
danger, or not otherwise meeting the tests of 2(a),
this additional language might. be construed to mean that
import restrictions may be maintained. It seems to me that
the amendment is dangerous in view of that possible construction
and wholly unnecessary to achieve the construction found by
the New Zealand Delegate.
CHIRMAN (Interpretation)s The amendmmen ha8sbeen carxrid.
It will be submitted to tho Lcgal Drafting Committee with the
ramraks made by the United States Delegate.
Mr. George BRONZ (United States): Mr. nCairman, in view
of the fact that only a enewjrpsitive votes were registered, I
would ask for a re-count.
OCIARAMN (Interpretation): Those in favour of the New
Zealand amendment please raise their hands.
Those against?
H.B. Z. AUGENTIHAK (Czechoslovakia): A point of order.
I think we have already taken a vote against".
OCAMVItA (Interpretation): The United States Delegate
asked that the vote should be taken again, to avoid any
ambiguity.
Those against?
The amendment is carried by seven votes to four, and will
be transmitted to the c-Leal Drafting Committee with the remarks
made by the United States Delegate.
We revert to the amendment of the Netherlands Delegate:
"No Member shall be required to withdraw or modify restrictions
On the sole ground" t,ce.
Any objeocion to this amendment?
V
- XS - - 24 -
E/PC/T/A/PV/41
Mr. L.C. WEBB (New Zealand): Mr. Chairman, I would
object to this amendment, because I think we have established
clearly that certain policies are outside the competence of
the Organisation to interfere with. It seems to me that
Mr. Speekenbrink's point is adequately covered by (c)(iii),
and also by the general process of complaint and redress
under Article 35 (2) -wherever Article 35(2) has come to rest,
because there the scope of complaint which a Member has is in
no way limited by anything in the Charter, and it seems to me
that that provides for his point quite adequately.
M. Pierre FORTHOMME (Belgium) (Interpretation): Mr.Chairman
I consider that the discussion which has just taken place
points out the extreme weakness of the means of defence against
any abuse of restrictions, and therefore I support the amendment
of Mr. Speekenbrink.
CHAIRMAN: The Delegate oof the United Kingdom.
V - 25 -
Mr. HELMORE (United Kidgdom: Mr. Chairman, I would be
reluctant to see any change in the sub-paragraph, which I know
has been discussed and re-discussed, drafted and re-drafted, in
order to give satisfaction to several -delegations who are already
reasonably satisfied with that particular point of view.
The reason why I intervened was to quote a precedent from
a document which Mr. Forthemme quoted at the beginning of this
discussion with such approval - that is the Ati-les of jAosiction
of th Ient;enational Monetary Fund. I sc. they had the same
problem in xdafting ead they saitd"shall not object to a proposed
change because of the admostic, social or political policies of
the Member proposing the change". I simpect that if they had
agreed with Mr. Speekenbrink, they would have said "solely
because" of that. They did not say that, and I suggest we
follow their example.
CHIIA'RM: The ".dlegeae of tDheNetherlanad.
Mr. SPEPKENBRINK (Netherl.ads): Mr. Chairman, I am sorry
I cannot I especially with what Mr. Webb just said, that our
policies are clearly outside the scope of the International Trade
Organisation. It increases my fear, again, of making an ieocpo
clause.
CHiLAIRi ( Interlrpretion): I therefore insist that yo
men Aedntme be taken int conosideration.
Considering that the opinions arowiedely different on this
subject, I shall ask those who are in favour of r. SMpeekenbrink's
monAmeot eto raise their hands. There are 4.
Those a,ingst? There are 9 against. Defeated.
Ly Afurther roareks on 3 (b)? 3 (c)?
The Do,.aete of the United Kingom.
E//T/2TPVA/41 G - 26 - E/PC/T/A/PV/41
Mr. HELMORE (United Kingdom): Mr. Chairman, Members of the
Committee will be aware, that this is a United Kingdom
reservation against c (ii), which refers to the question of
"importation" on which we had considerable discussion in the
Commission before this Articles was sent to the Sub-Committee.
I would like, very briefly, if I may, for the benefit of those
Members of the Commission who are not on the Sub-Committee, to
explain our reasons for this reservation.
As the United Kingdom Delegation explained in the discussion
in the Commission, we were very nearly the inventors of what is
known as the "total import" policy, and we have been applying
it since 1945. It may, therefore, be somewhat surprising to
say that we could not accept this paragraph for total imports.
The reasons are that, although the paragraph is not in the
comprehensive form which caused. considerable objection when we
discussed it in the Commiesion before, neither is it in the form
which we said was essential for us in order to accept it, namely,
that obligations which could be shown to be equal were imposed
on all Members of the Trade Organisation. In particular, the
words, "to avoid the application" seemed to us extremely weak,
and the word "unnecessarily" in the next line seems to us to
be open to a completely subjective interpretation by any Member
of the Organisation. That is to say, if this were stated by a
country to be a necessary restriction, nothing could be done about
it.
We would be anxious, Mr. Chairman, to get rid of this
reservation if some changes can be made to meet us, and I think
I should say straight away that we would, with some misgiving. G - 27- E/P C/T/A/PV/41
accept this paragraph if the words "to avoid the application of"
were omitted, and the words "not to apply to" were inserted
instead, and then leave out "which would unnecessarily", and
insert "so as to prevent unreasonably". The first part of it
would then read, in full: "Not to apply restrictions so as to
prevent unreasonably the importation" etc.
Without some such change as that we should be compelled
to maintain our reservation against this sub-paragraph. S
CHAIRMAN. (Interpretation): Gentlemen, we have now before
us an amendment submitted by Mr. Helmore which, if adopted,
would make it possible for the United Kingdom Delegation to
withdraw their reservation. Is the Commission prepared to
consider this amendment?
Are there any objections to this amendment?
Mr. J.G. PHILLIPS (Australia): Mr. Chairman, this
amendment would be acceptable to the Australian Delegation
provided there were another amendment lower down in the
paragraph the. deletion of the word "of" before "restrictions."
CHAIRMAN (Interpretation): Are there any further objections?
Is everybody agreed?
The amendment is therefore carried and the United Kingdom
Delegation withdraw their reservation.
CHAIRMAN (Unit ed Kingdom ): :ES, eS, Mr. Chairman.
CHAINRMM (Inteerprtation): Are these any further
observations on sub-paragraph (c)?
Thelee Dgate ozecf choslovakia.
HE.MrZ.AENUHALER G:UCzcechoslovakia): Mr. Chaiarm;, as
far es I deunrastnd itw,e hn eth qe;stion was discussed in
the sub-committewee iisedaaea point.W eee fl it important
that under thisdeae of minimum commercial quantities there
shoulde b an understood priority for eth import of spare
prt, thei Iport of spars parts into
a country, youa re akming it impossible for otehr countries
to export machinery. I do not wish to move an amendment ehre,
the
but only to have this on/record.
HACIMAN R(Interpret tio)n : That will be don./ S - 29 - E/PC/T/A/PV/41
Are there any further remarks?
(Agreed)
Gentlemen, I think we shall have a very heavy day and we
may have to contemplate a night meeting; therefore it is
necessary to have a races. I suggest that we adjourn now
until 5.15. This will be all the more necessary because we have
just received the Report of the Legal Drafting Committee on
Articles 26, 28 and 29, to which it will be necessary for us
to give our attention. When we meat again we shall first
take up the amendment to Article 25.
The Delegate of France.
M.BARADUC (France) (Interpretation): When you suggested a
night meeting, Mr. Chairman, I take it you forgot that tonight
India is celebrating her independence and that we have all been
invited.
CHAIRMAN (Interpretation): I have not received an invitation
and therefore did not know, there was a party.
Mr. HELLMORE (United Kingdom): Mr. Chairman, I hasten to say
that on August 15 I am no longer in a position to do anything
with the Indian Delegation to secure you an invitation. Neverthe-
less, I would very much like to suggest that we should not con-
template an adjournment for dinner but that we should work straight
on; I suggest that the absence of dinner might increased the
speed and that, with luck, we should finish by nine o'clock, I
have every reason to believe that, in addition to the more normal
refreshments at in evening party, we might find sandwich.
CHAIRMAN: The Delegate of India.
Mr. B.N.ADAKAR (India) Mr. Cheirman, I must apologis on
behalf of our Delegation for this lapse on the part of the office
of the Delegation in not seeing to it that the invitation intended
for you was delivered in time .
Chairman: We will meet again at 5.15 p.r
(The Meeting ad journed at 4.50 p.m.) ER -SC - E/PC/T/A/PV/41
(The Meeting resumed at 5.25 p.m.)
CHAIRMAN (Interpretation): The Meeting is called to order.
We shall first examine the amendment proposed. by Mr. Shackle to
paragraph 3 of Article 25, which has been circulated. Everybody
has read it. Is there any objection to this amendment?
Mr. George BRONZ (U.S.A ): Mr. Chairman, the amendment in
substance is acceptable to us. I suggest that we should save
quite a few words if we kept he first two lines as given in
the text and then struck out the rest and said instead:
" made affective through state trading operations."
Mr. R. J. SHACKLE (United -Kingdom): Mr. Chairman, that
suggestion is entirely acceptable to me.
CHAIRMAN (Interpretation): Does everybody agree to this
amendment in its now form?
The amendment is carried.
We continue now with the discussion on Article 26, paragraph
4 (a). Are there any remarks?
Gentlemen, I suggest. that from now on instead of referring
to Document 153 we continue our discussion on the basis of Document
171 submitted by the Legal Drafting Committee.
Paragraph 4 ( a) on page 7 n Are there any remarks?
Sub-paragraph (b)
Sub-paragraph (a). Are there any remarks?
Sub-paragraph (d).
Sub-paragraph ( e)
M. PIERRE FORTHOMME (Belgium): (Interpretation) Mr. Chair-
man, concerning the insertion of this new sub-paragraph (e), is it
really necessary to maintain the last sentence in paragraph 4(a), which reads: "No Member shall be required in the course of con-
sultations under this sub-paragraph to indicate in advance the
choice of timing off any particular measure which it may ultimately
determine to adopt." We would prefer here to insert the secrecy
cause.
CHAIRMAN (Interpretation): Has everyone heard the amendment
suggested by Mr. Furthomme? Could I now ask Mr. Phillips to give
his opinion on this amendment?
Mr. J.G. PHILLIPS (Australia): Mr. Chairman, I do not think
I could express an opinion on behalf of the sub-committee on this
point as I do not remember that it was specifically discussed.
Well, for my own part, as t :e delegate for Austrlia I think
that the two provisions might still be retained even though I do
agree with Mr. Forthomme's idea that they do more or less relate
to the same point, but personally I would prefer to retain both
even though tho secrecy provision has been added . There is still
some point in not, requiring a Member in prior consultation to
indicate exactly what he may do. I think the consultation is
likely to be more valuable in principle if a member does not feel
forced to disclose what he proposes to do, and when.
CHAIRMAN (Interpretation) Since Mr. Phillips enjoyed the
confidence of the sub-Committee, his opinion would reflect that of
the sub-Committee.
M. PIERRE FORTHOMME (Belgium) (Interpretation) Mr. Chairman,
may I add this: that even before sub-paragraph (e) was inserted,
I considered already that the last sentence in sub-paragraph (a)
took away most of the scope of the authorisation given on measures ER. - 32 - E/PC/T/L/PV/41
rather indeterninate, and now sub-paragraph (e) does away with one
of the real dangers that existed, and which were concentrated in
the last sentence of sub-paragraph (a). Thererefore, this last
sentence can only serve now to limit the possibility of exemina-
tion by the Organisation of measures that are contemplated in the
interests of the use of legitimate restriction I think that it
would be a good thing if the Oranisation were duly informed of
those restrictions.
CHAIRMAN (Interpretation): Does anyone else wish to speak
on this amendment? - 33 -
M. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
we would like to have both texts retained as they are at present,
because we believe that the position covered by the two
paragraphs is not the same. paragraph (e) applies to the
which is
general clause/provided f or the secrecy of Consultations, whereas
paragraph (a) simply provides that the Member will not have to
communicate in advance the kind of measures he will eventually
adopt. Furthermore, the necessary possibility is left since
paragraph (e) speaks of alternative corrective measures which may
be available.
CHAIRMAN: Dr. Speekenbrink.
DR. _..B. SPEEKENBRINK (Netherlands): Mr. Chairman, I also
have some doubts here, The particular sentence to which the
Belgian Delegate referred must also, I think, be read in
coujunction with the last part of sub-paragraph (c), where it says
"As a result of such consultations, the Organization may approve
in advance the maintenance, intensification or institution of
restrictions by the Member in question insofar as the general
extent, degree of intensity and duration of the restrictions are
concerned. To the extent to which such approvual has been given
given.....etc.", and then we are not acting contrary to the
principles, but I am wondering, if you do not say anything about
the choice or timing of any particular measure, how will you ever be
able to give approval ?
MR. J.G. PHILLIPS (Australia): Mr. Chairman, there is another
aspect of this matter, and I think it might help if I describe
briefly what sort of procedure the sub-committee had in mind under J.
the various paragraphs of this Article, or rather, the various
sub-paragraphs of paragraph 4.
Paragraph (a) provides for the prior consultation between the
Member of the Organization before the restrictions are instituted,
and very likely, we hope, before the Member has made up his mind
whether he needs restrictions at all. The prime purpose, as the
sub-committee saw it, of this first paragraph, sub - paragraph (a),
is to allow or require the Member to go to the Organization when
he thinks he may need restrictions. He would then consult with
the Organization and the Internationl Monetary Fund as to the
nature of his balance-of-payments difficulties, the alternative
corrective measures which may be available and the possible effect
of such measures on the economy of other Members. This might well
be before he had made up his mind either whether he need
restrictions or, if so, what form they shoud take. In fact,
I think I am right in saying that the sub-committee hoped that this
would be so, because there is a better chance of persuading the
Member to adopt a reasonable course of action if he has not already
crystalised his ideas about the action he should take. There is,
however, no question of approval by the Oraganization in this
sub-paragraph, it is a question of consultation only.
Sub-paragraph (b) piovides for consultation with a Member who
is already applying restrictions. Sub-paragraph (c) is a Provision
that a Member, if he wishes, may, go to the Organization and got
prior approval for restrictions which he thinks he may need in the
future, or which he wants immediately, and where he feels he has a
strong case for them; therby avoiding the risk of complaint
later on the rounds that he was not justified in applying them.
Sub-paragraph (d) is, of course, the complaint procedure.
- 34 - - 35 - E/PC/T/A/PV/41
This sentence, therefore, at the end of sub-paragraph (a)
should, I think, be retained not merely on the grounds of secrecy,
but also to suggest that when the Member consults with the
Organization under this sub-paragraph he should not be required to
have complete his plans, he should not be required to have chosen
himself what he is going to do. In fact, as I said before, the
sub-committee hoped that in most cases he would not have made up
his mind, and this sentence says that he shall not be required to
indicate particular measures which he may ultimately determine to
adopt. It is. as I said, not only a matter of Secrecy but a
suggestion that the Member need not indicate measures when
consulting with the Organization.
I think, therefore, that the sentance should be retained. V
CHAIRMAN: The Delegate of Belgium.
M. Pierre FORTHOMME (Belgium):(Interpretation): Mr. Chairman,
I have listened with great attention to Mr. Phillips' statement,
and I have found it ingenious; but I would better understand it
if sub-paragraph (a) did not contain the wards between brackets
"or, in circumstances in which prior consultation is impracticable,
immediately after doing so". In fact there is such a likeness
between (a) and (c) that from time to time one has the impression
that it is the same paragraph.
CHAIRMAN (Interpretation): Practically every Delegate who
has spoken,has spoken in favour of the maintenance of this sentence.
In these circumstances, does Mr. Forthomme maintain his amendment?
M. Pierre FORTHOMME (Belgium) (Interpretation): I do not
insist.
CHAIRMAN (Interpretation): Are there any further remarks
on sub-paragraph (e)?
Paragraph 5. Any remarks? It is adopted.
Mr. J.G. PHILLIPS (Australia): Mr. Chairman, before we pass
from Article 26 may I just refer very briefly to the fact that
there is an Australian reservation on paragraph 2(b) of Article 26?
I did not raise that at the time, because we have no amendment
to propose, and I did not wish to provoke discussion.
Our reservation does not imply that we are t-' agreement
with the general intent of the paragraph, namely, that the
severity of import restrictions should be relaxed as commitions
improve, and that they should be removed entirely when the Member's
balance-of-payments is no longer threatened. We wish to be sure,
however, that the criteria applied are not so rigid as to require - 37 -
that a Member should remove import restrictions prematurely,
before its balance-of-payments has been restored to equilibrium
on a stable basis. It is because our Government still has
some doubts as to whether the present wording gives the necessary
flexibility that we are forced to maintain this reservation for
the time being.
CHAIRMAN (Interpretation): We therefore take note of the
Australian reservation. We now take up Article 28.
M. Pierre FORTHOMME (Belgium)(Interpretation): Mr. Chairman,
may I recall that I raised a preliminary question on the whole
of Article 26, and I should like to know now whether your
decision to take up Article 28 now means that the Commission as
a whole is against this preliminary question? If this is the
case, my Delegation makes a full reservation on the whole of
Article 26 until a thorough examination has been made by the
Belgian Government of that Article within the general framework
of the Charter as a whole. This reservation extends also to
Article 28 and to the whole of Article 29.
As regards Article 28, it is said in the Report of the
Sub-Committee that the text is submitted by the Sub-Committee
Itself subject to its being examined by the Governments of the
Members of the Sub-Committee. Now, if the Members of the
Sub-Committee, who have studied this Article for a month, must
require the approval of their Governments, the other Members of
this Commission should all the more ask for a thorough
examination. For this reason too, I must lodge a general
reservation on Articles 26, 28 and 29.
CHAIRMAN (Interpretation): Note is taken of the
reservation made by Mr. Forthomme.
V - 38 -
Mr. BARADUC (France) (Interpretation): If I am not mistaken,
Mr. Chairman, we have only adopted the English text of Article 26.
In fact, we have had no time to examine the French version
submitted by the legal Drafting Committee, and it might be
necessary later in the evening to revise the French text, in
which we have found a number of mistakes which I should like to
have the agreement not only of the other French-speaking
Delegations on, but also of the Commission as a whole.
CHAIRMAN: This is agreed.
The Delegate of the United Kingdom.
Mr. HELMORE: (United Kingdom): I was going to ask you
whether you intended to ask us to approve the version submitted
by the Legal Drafting Committee of this paragraph which was
dealt with before. As far as I am concerned on the English text,
I am prepared to say that it would be acceptable with the
Drafting Amendments submitted by the Committee straight away.
I am a little bit puzzled by the intervention of the French
Delegation, since I understood that the French and Belgian
Delegations were represented on the Legal Drafting Committees and
it seems to me a bit odd that they should now say there are
mistakes in the French version they submitted to us.
CHAIRMAN: Mr. Baraduc.
Mr. BARDUC (France) (Interpretation): May I reply to
Mr. Helmore that without disavowing my colleagues (and I think
Mons. Forthomme will agree with me) neither myself nor Mons.
Forthomme are members of the Legal Drafting Committee, and
therefore we have had no time to reed these texts.
Furthermore, I have just been informed that the Legal
Drafting Committee itself has found that there were a number of
E/IC/T/A/PV/41 G
errors, and has just circulated a Corrigendum.
CHAIRMAN (Interpretation): Mr. Helmore raised another
question. He pointed out that up to paragraph 4 we worked on the
basis of the text supplied by the Sub-Committee, and then we
continued on the basis of the text submitted by the legal Drafting
Committee.
Is this Commission agreed to accept the version of the
Legal Drafting Committee for the first four paragraphs of
Article 26?
The Delegate of Chile.
Mr. GARCIA OLDINI (Chile) (Interpretation): I have a third
question to raise, Mr. Chairman. I do not consider it is normal
that a new text be circulated while a text is under discussion.
I do not see why the English-speaking Delegates should have the
advantage of being in a position to read a text beforehand, to
study it carefully and compare its drafting with another previously
existing drafting supposing they enjoy this advantage.
At any rate, as regards the French-speaking Delegations
I cannot admit that a new, text should be circulated in the course
of the discussion because we have no time to compare it with
the text that is to be found in the Report of the Sub-Committee.
Everyone knows that very frequently a change in the wording may
entail a change of substance.
CHAIRMAN: The Executive Secretary.
Mr. .WYNDHAM WHITE (Executive Secretary): Mr. Chairman, I
want to say a word or two or both texts. First of alI, I
should like to say that there is no reason why the English-
-39- E/PC/T/A/PV/41
speaking Delegations should appear to be more favourably
treated than the French Delegations, since the Report was
distributed to them at the same time as the text in French.
I do wish to place on record that this suggestion, and
similar suggestions made in Sub-Committees to the same effect,
have no foundation whatsoever. There have been certain
difficulties owing to the heavy demand on the staff here in
certain cases with the French texts, but very special efforts
have been made by local staffs to overcome this, and I think the
French Delegations were free from any discrimination in this
sense not only in this particular case, but generally.
Secondly, it is a bad policy to submit a document at
such short notice. The reason why it was done is that the
Legal Drafting Committee are working extremely long hours and
extremely hard, and have been able to produce their revisions
of the Sub-Committee Reports in almost every case in time for
them to be taken at the same time as the Sub-Committee Reports.
They have done that as an extra convenience for the Preparatory
Committee, and I have asked for the co-operation of the
Commission in dealing with its Reports as soon as they come
forward, as otherwise it may be necessary to envisage a
further sitting of the Commission in order to consider points of
drafting contained in the Drafting Committee's Reports.
If there are points of drafting which cause difficulties
to Delegations, then they can reserve their Amendments and we
will find occasion between now and the Plenary Sessions to
clarify the points.
G
- 40 - S -41- E/PC/T/A/PV/41
CHAIRMAN: The Delegate of Chile.
Mr. F. Garcia OLDINI (Chile) (Interpretation): I should
like to make it clear, Mr. Chairman, that I am very happy that
you have given the Executive Secretary an opportunity to
supply us with an explanation. I am even happier to find that
I was mistaken when I said that in the present case there
had been some discrimination, and you must not forget that
I added "if any."
Even if it was never the intention of the Secretariat
to make any discrimination - of which I am certain - in fact,
this discrimination has existed and in many cases the French-
speaking Delegations in sub-committees have had to wait
during the whole of a meeting before thay could get the
French translation of a text of four lines.
CHAIRMAN (Interpretation): In conformity with what has
been said by Mr. Wyndham White, I suggest that the various
Delegations should study carefully the first three paragraphs
of Article 26 and make any relevant remarks to the Secretariat,
which will find some means of dealing with them.
The Delegate of the Netherlands.
Mr. A. B. SPEEKENBRINK (Netherlands): Mr. Chairman,
I would like to say a few words. I am still a little worried
about that famous article 3(b)(i) and I have not had time
enough to think it over. The reason I am so worried is
because I do feel that this Chapter, like other Chapters of
the Charter, was a compromise between several points of view, -
but I'do think it is a very commenda eleffort. Nevertheless,
Just becaeus it is a compromise, I doef-el that the powers of
the Organization for consultation and even action should be as
er-at as possib.e, That is the cause of mwo zrry he.e I would therefore like to reserve my attitude with regard to this
special sub-paragraph for a few days.
CHAIRMAN: (Interpretation): Notice has been taken of Mr.
Speekenbrink's remarks.
CHAIRMAN: The Delegate of the United States.
Mr. George BRONZ (United States): With respect to the
same sub-paragraph, I have undertaken to secure the views of
the head of my Delegation and I hope to be able to say some-
thing on it, if necessary, before the close of the session
today, I just wanted to say that before we pass on from
Article 28.
CHAIRMAN: We pass now to Article 28, Paragraph 1;
Preamble, Page 14 of the Report of the Legal Drafting Committee.
The Delegate of New Zealand.
Mr. L. C. WEEB (New Zealand): MIr. Chairman, I just
wonder, in this Proamble, whether the Committee which produced
this text has not said more than it wanted to say - "to
prevent the development or maintenance of bilateral trade
patterns as an enduring feature of world trade." I think I
see the purpose of that and I think it is a commendable purpose,
which is to condemn bilateraliss, or What I might almost cell
the bilateralism of Dr. Schacht. We do not very much like the
term, because it seems to us that eetn in teh graet period of
free trade, under free trade conditions the trade of a number
of countries fell naturally into bilateral patterns. Tecerfore
it would be justifiable either to suppress this reference to
bilateral patterns or to say "bilaearal patterns of a tyep which
are restrictive to world trade," because tehre are bilateral
patterns which I think haecaen element of stability and
expansion. P
E/PC/T/A/PV/41
CHAIRMAN (Interpretation): Is there any remark on this
amendment? The amendment is either to reads-
"The Members also recognise the need for close limitation
of such departures."
or to continue: -
"..... to prevent the development or maintenance of
bilateral trade patternsof a type restrictive of
international trade as an enduring feature of world trade."
For my part, I suggest that the shorter the better. Therefore
that we should put a full stop after the word "departures" and
delete the last three lines.
Mr. George BRONZ (U.S.A.): Mr. Chairman, it seems to me
that the amendment proposed by the Delegate of New Zealand raises
a rather fundamental question of policy. The draft of Article 28
which has been presented here represents a very difficult and
delicate compromise between different points of view on the
subject-matter of the Article.
From our point of view, our insistence throughout this
Conference that we are here to formulate a Charter for a
multilateral pattern of world trade as against a purely bilateral
pattern is well known and has been expressed on many occasions.
This is the only reference in the entire Article to the necessity
for protecting what we regard as the fundamental principle of the
entire Charter - that we are headed toward a multilateral rather
than a bilateral trade. This injunction was included as a
recognition that the exceptions provided in Article 28 are very
definitely to be considered exceptions to meet unusual
circumstances as detailed in the Article, but the principle of
multilateralism as an objective of the Organization should be kept
in mind. It is therefore argued that the inclusion of the
sentence as it is is of vital importance to the balance of Art: 28.
43 44 E/PC/T/A/PV/41
CHAIRMAN (Interpretation): I wonder if the two points
of view of Mr. Bronz and Mr. Webb could not be reconciled by
a sentence in the following terms:-
"The Members also recognise the need for close limitation
of such departures ...."
and then continue:
to avoid that the maintenance of bilateral trade
patterns should prevent the promotion of multilateral
international trade."
Mr. George BRONZ (U.S.A.): I am afraid that such phrasing,
at least as given in the interpretation, suggests that we would
not condemn the maintenance of bilateral trade patterns except
to the extent that they prevent the promotion of multilateral
international trade. It seems to suggest that you can maintain
bilateral trade patterns while efforts are being made to promote
multilateral trade. I think that is rather putting multilateral
trade too far off into the distant future.
CHAIRMAN (Interpretation): It is not my part, of course,
to intervene in the debate, but this is exactly what I meant.
almost
In fact, bilateral trade is not an evil in itself and/all forms
of trade are bilateral. The statistics of the League of Nations
have shown that 75% of the whole of international trade was
bilateral while 25% only was multilateral. M. PIERRE B.R.DUC (France) (Interpretation): Mr. Chairman,
I fully understand your attitude, but I think that in fact the French
words "courrants commerciaux" are/rather unsatisfactory translation
of the English "trade patterns "because I think - I do not know if I
am mistaken - but I think that the word "pattern" implies something
systematic and artificial, while the expression "courrantss
commerciaux" in French is perfectly normal, and to condemn bilateral
commercial trends would be to condemn nature itself. But what I
think is that in the English phrase there is something which is not
to be found in the French phrase, and I suggest that the phrase
should read: "courrants commerciaux artificiels", or in English
"artificial commercial trends."
CHAIRMAN (Interpretation): I would like to point out that Mr.
Webb's amendment referred to the English text.
May I make another suggestion? "The Members also recognise
the need for close limitation of such departures as to bring about
as soon as possible that revival of multilateral international trade."
Mr. GEORGE BRONZ (United States): Could we say "so as not to
handicap the revival of multilateral international trade"?
Mr. J.R.C. HELMORE (United Kingdom): I am awfully sorry to
intervene in the discussion. I like your suggestion, Mr. Bronz,
but I have some objection to the word "revival" which in English
is associated a little bit with the Salation Army, and, in any
case, implies that multilateral trade is quite dead. I do not
believe it is.
M. PIERRE BARADUC (France) (Interpretation): I think I would
make the same remark as Mr. Helmore with regard to the word "revival"
because I think that multilateral trade is ready to revive like E/PG/T/A/PV/41
Mr GEORGE BRONZ (United States): Could we say "achievement"
instead, of revival"?
CHAIRMAN (Interpretation): I suggest that we adopt the English
version, and we shall then find a satisfactory French equivalent
because I am myself not satisfied with my own version.
Mr. PIERRE BARADUC (France) (Interpretation): Could we have
the adopted text in English?
Mr. GEORGE BRONZ (United states): "The Members also recognise
the need for close limitation of such departures so as not to handi-
cap achievement of multilateral international trade."
MR. Z.AUGENTHALER (Cechoslovakia): I have a question to ask
which I am afraid was not answered in the sub-Committee concerning the
words "substantial and widespread disequilibrium"., Is it a dis-
equilibrium in countries with whom the other respective countries have
a substantial part of their trade, or is it World-wide disequilbrium
because I am afraid that it is of little use to me if at this m ment
it is very cool on the North Pole and I am sitting in Geneva,
CHAIRMAN: (Interpretation): I think you will find a reply in
the French text which is perfectly clear. J.
H.E. DR. Z. AUGENTHALER (Czechoslovakia) (Interpretation):
It is a very good explanation, but it does not impress me.
CHAIRMAN (Interpretation): We now pass on to sub-paragraph (b).
MR. J.R. C. HELMORE (United Kingdom): Mr. Chairman, in the
Drafting Committee's version on page 15, about half-way down the
paragraph, there are some words which read as follows "from
countries, limiting imports because of balance-of-payments
difficulties". We would like to move the omission of those words
so that the relevant part of the sub-paragraph would read "depars
from the provisions of Article 27 to the extent necessary to obtain
additional imports above the maximam.....etc.". We think that
those words would be undly limiting in that they would prevent to
obtaining of additional imports from a country which was not
limiting imports itself but which, nevertheless, had a currency
which was inconvertible. It might also prevent the obtaining, of
additional imports from countries which were prepared to facilitate
it by witholding the currency of the buying country, and in any
case, we suspect that there might be some incentive to certain
countries to endeavour to continue to limit their imports because
they wish to be discriminated in favour of.
In any case, there are all the other safeguards in the Article,
and in view of the limiting effect of these words we think they
would be better removed.
CHAIRMAN (Interpretation); Are there any remarks on this
amendment?
M. P. BARADUC (France) (Interpretation): I am entirely in
favour of this amendment. 48
CHAIRMAN (Interpretation): Is everybody agreed?
The amendment is carried.
Is everybody agreed on the text of paragraph (b) on page15?
Agreed.
Page 16. Are there any remarks on paragraph (i)? (ii)?
MR. J.R.C. HELMORE (United Kingdom): Mr. Chairman, we have
an amendment which we hope will be regarded as almost entirely of
a drafting character. It has been circuaIted on a paper which has
no heading, but which has at the bottom No. M. 397/47. It reads,
in English, "The Member taking, such action does not do so as part
of any arrangement" - and here the different wording comes - "by
which the gold or convertible currency which the Member currently
receives directly or indirectly from its exports to other Members
not party to the arrangement is appreciably reduced....." - and then
it goes on as before.
We think that the words as they now stand might give some
encouragement to the undesirable practice which is existing of
payment in the gold of other countries for certain goods, and we
believe that the words which we have very carefully express ! the
intention of this paragraph, which is that countries should not be
parties to any arrangement which diverts their exports away from
markets where they can normally earn hard currency which, of course,
is available for expenditure in any party, and thus removes, to
that extent, the need for operating under this Article.
CHAIRMAN (Interpretation): Are there any objections to
this amendment?
E/PC/T/A/PV/41
J. 49
J. E/PC/T/A/PV/41
MR. J.G. PHILLIPS (Australia): Mr. Chairman, this was one
of the points on which the sub-committee had not really completed
their discussion, but I would assume that the Members of the
sub-committee would have no objection to this.
CHAIRMAN (Interpretation): Are there any objections?
M. P. BARADUC (France) (Interpretation): I have no
objection to the English text, but strong objections to the
French text which contains at least three fundamental mistakes,
but we shall, of course, revise the French text accordingly.
CHAIRMAN (Interpretation): Subject to this reservation,
Are there any remarks on paragraph (iii)?
Are there any remarks on paragraph (c)?
Are there any remarks on paragraph (d)?
Adppted. 50
V E/PC/T//A/PV/41
CHAIRMAN (Interpretation): Paragraph 2. Any objections?
(Adopted).
Paragraph 3(a).
Mr. J.R.C. HELMORE (United Kingdom): I am. sorry to be taking
up so much time, but here again is one of the amendments which
will come up on completion of the work of the Sub-Committee.
It is proposed to add some words after "prescribed" (we thought
it was going to be "specified", but I see the Legal Drafting
Committee say it ought to be "prescribed"). The words are:
"for the purpose of ensuring compliance with the provisions
of paragraph 1 of this Article, provided that the Organisation
shall not require that prior approval be obtained for individual
transactions".
Those words have been circulated, together with a motion in
French, for which I hardly dare expect any approval whatever,
prior or subsequent. The purpose of this amendment is apparent
on the face of it: that it is not intended that the limitations
which the Organisation may prescribe should go down to the detail
of requiring prior approval of individual transactions, which,
in our view, would be an impracticable '.ok and indeed a
dangerous one for the Organisation to undertake.
I might perhaps finish these remarks by venturing to express
the hope that if this amendment were adopted, it would enable
the French Delegation to remove the reservation which is contained
in Note 5 of the Sub-Committee's Report, and which suggested
the addition of the word "general" between "any" and "limitations".
I hope they will agree that this amendment has the same effect.
CHAIRMAN: The Delegate of France. 51
V E /PC/T/A/PV/41
M. Pierre BARADUC (France) (Interpretation): I entirely
agree with the amendment suggested by Mr. Helmore -of course, in
the English version- and if this amendment is embodied in the text
of this paragraph, my Delegation will be in a position to withdraw
its reservation on this point.
CHAIRMAN (Interpretation): Any further remarks?
;Y 1MEELANDER (Norway): The Norwegian Delegation would
not, I think, be able to accept the draft text as it stands here.
We would certainly feel that the British amendment is an improvement
and would for that reason be in favour of that. But, at the same
time, I think that we would be in favour of deleting paragraph 3(a)
altogether .
We feel that as the Sub-Committee's Report is of a tentative
nature, it would perhapss not be right to take any final decision
on this point, and we have decided that we will just make a general
reservation on Article 28 as a whole. Consequently, I am not
going to make any special reservation on paragraph 3(a). I
just say that I would prefer the British amendment for the text as
it stands, but that we do maintain a general reserrvation on
Lrticec 8S asae whole.
HALIMAIN (Inecpyertation):Alny observations?
H. . Z .ALUENTHALLER (Czecessovvkia): Mr. Chairman, Iwo uld
like to staeo thatI1 am in the same position as Mr. Melander, n
if it could. be allowed, I woaud like to make a general statement
at the end of the discussion on Article 28.
C'HAIRMA (Interpretation): I entirely agree.
Are there any :frther remarks on paragraph 3(a)?
Paragr-ph 3(b). 52
Mr. J.G. PHILLIPS (Australia): In my opening remarks when
I introduced the Report, I said that there was one point where
square brackets had been left in the Report of the Sub-Committee,
and where subsequent discussion by the Members of the Sub-Committee
had agreed on the proposal, which would remove the square brackets.
This is the paragraph where that proposal is made, and the
proposal to take the place of the words in square brackets in the
third, fourth and fifth lines in the English version is labelled
as a new paragraph 5 of Article 29. It has been distributed, I
think.
It is suggested that that paragraph be inserted in Article 29
and that the words "or exchange restrictions on payments and
transfers in connection with imports" appearing in this
sub-paragraph should then be deleted. 53
G E/PC/T/A/PV/41
I am sorry, the text is now
being distributed. I thought it had been distributed.
CHAIRMAN: (Interpretation): Mr. Phillips, the suggestion
made is to delete the words between brackets in sub-para. (b),
and to substitute for them a new paragraph 5 in Article 29.
Any objection to this Amendment?
Mr. SPEEKENBRINK (Netherlands ): May I ask for one
explanation, Mr. Chairman. I cannot understand the last part of
it. We say here, "If the Organisation considers, at any time,"
and so on, "it shall report thereon to the International Monetary
Fund". What happens then?
Mr. PHILLIPS (Australia): I feel that some explanation is
perhaps necessary here. The phrase that was previcusly in
square brackets in sub-paragraph (b) provided that the
Organization could in effect disallow exchange restrictions
imposed by a Member which were discriminating in a way inconsis-
tent with the exceptions under Article 28. There is, however,
or there was in the Sub-Committee, some doubt as to whether
there should be a specific provision here which would allow the
Organisation in this particular place to disallow exchange
restrictions which might have been approved by the Monetary Fund.
The solution of the problem which the Sub-Committee reached
was to propose that if the Organisation found that a Member was
achieving by exchange restrictions results which he would not be
allowed to achieve under the Charter by import restrictions,
there are two courses open. The first is the one that is
proposed in this Amendment, that the Organisation should draw
the attention of the International Monetary Fund to the fact 54
G E/PC/T/A/PV/41
that this was occurring. The second point is covered in
paragraph 4 of Article 29, which provides that a Member shall
not frustrate the intent of the provisions of the Charter by
exchange action, nor the intent of the provisions of the
Articles of Agreement of the Monetary Fund by trade action.
Perhaps that is an adequate explanation.
Mr. SPEEKENBRINK (Netherlands): My objection is that if
you say that in the Report, you do not say it might be asked for
action to be taken, or something like that. We can only "report".
CHAIRMAN: (Interpretation): Do you suggest any change in
the text?
Mr. SPEEKENBRINK (Netherlands): Yes, possibly to ask for
action to be taken, or something like that.
Mr. PHILLIPS (Australia): I can only say, Sir, that I
think the Sub-Committee felt that if the matter was brought
officially to the notice of the Monetary Fund, that was
sufficient.
CHAIRMAN: The Delegate of the Netherlands.
Mr. SPEEKENBRINK (Netherlands): If the Sub-Committee thought
that over, I am prepared to follow their judgment.
CHAIRMAN: We agree, therefore, on the Amendment suggested
by the Australian Delegate.
Agreed. S 55 E/PC/T/A/PV/41
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Arc there any further remarks on sub-paragraph (b)?
ND2 remarks4
(Agreed)
We pass on to sub-paragraph (c).
The Delegate of the United States.
Mr. BNZ (Uni.td>Sntes):- Mr.' heirman, therc has beer.:
distributed a documcnt-Su:y'sted re-wording of `rticle 28,
Pargeraph 3(c) - bearing the number, in the lower left-hand
corner, Y.399/474 This document has been agreed among a nuiber
of Delegetions on the Sub-committee, although it had not been
presented in time for a Sub-committee nectingW
To eliminate the dissgreem<nt involved in the bracketed
words "not later then" appearing in the to-Xt s reported by
the Sub-committee, what has been done in this amendment is to
include a new sentoc:,which begins on thr ccvonin of
the Ynglish text, There is also a change of wording at the
beginning. Instead of saying: "Not later than three years
after the date on Which the International Monetary Fund
began operations', we say: "Not later than March 1, 1950",
which is a shorter way of saying the same thing; and in the
next sentence, which included the, bracketed words, we have now
substituted for the bracketed words and for the phrase following
thein, including the refer-nce to the Monetary Fund, the shorter
referonc6: "On or about Mirch 1, 1952,i
The substance of the question was whether the Organization
would be free before Mrch 1, 1952 to review the question of
whether or not there is then a widespread disequilibrium, and
the resolution of tho difference is in the form of limiting the
reviyw in the second sentence of the paragraph to one "on or
about March 1, 1952," and to provide, in a new sentence which had
been added, 'If it appears at any date prior to March 1, 1952, S 56 E/PC/T/A/PV/41
that there has been a substantial and general improvement
in international trade and payments, the Organization may
review the situation at that date."
I suggest the adoption of this text.
(After the interpretation):
My attention has just beer, called to the fact that the
Legal Drafting Committee has made one minor change in the
English text and apparently it was not indicated by underlining,
At the end of the text, the text reported by the Sub-committee
read: ". . . shall cease six months after such determination."
The Legal Drafting Committee's text is entirely acceptable to
me and I therefore suggest that the new proposal should be
construed in that way.
(After the interpretation): a
Mr. Chairman, just to avoid any possible misunderstanding,
ehe words "not lctor than" would come in the last line but one
of both the suggested re-wording and the blue text; it is not
to be confused with the "not later than" clause appearing in
brackets much higher up in the text,
CHLIRMAN (Interpeetation): Arc there any objections to
the amendment proposed by the Delegate of the United States?
ac objections?
Tee Delegat. of Nrw Z.aland,
Mr. GOD.a.aWHITE (New Zenlnnd): MreChairman, I havc no
objection to that amondment, but I w-uld like to ask for
clarification - perhaps I should ask the Chairman of the Sub-
committee - concerning the last sentence of this draft. It
provides that the provisions of Paragraph 1 of this Article
shall be suspended in certain circumstances, and I would like
to ask exactly what that means. I have in mind the case that
the provisions might be suspended and then, many years later, a
disequilibrium might arise again: can Members then take action
under Paragraph 1 if it were suspended, in case a disequilibrium
were to arise at some future date, or would this mean that
Paragraph 1 would be suspended for all time ? P 57 E/PC/T/A/PV/41
Mr. J. G. PHILLIPS (Australia): Mr. Chairman, the intention
of the Sub-Committee was that the provisions of paragraph 1 should
be suspended only if and when the Organization found that another
substantial and widespread disequilibrium had commenced. You will
observe that in the sixth and following lines of the text
distributed just now the provision is made that "the Organization
shall review the question of whether there then exists such a
substantial and widespread disequilibrium, and that this shall
be done "at such times ... as the Organization may decide". That
was intended to imply that at any time the Organization could review
the question of whether a substantial disequilibrium existed, and
if it found that it did, then the provisions of paragraph 1 would
operate,
Mr. G.D.L.WHITE (New Zealand) signified assent.
CHAIRMAN (Interpretation): The New Zealand Delegate is
satisfied with these explanations.
Are there any further remarks on the new version of 3 (c)?
M. P. BARADUC (France) (Interpretation): I entirely agree
with the United States amendment as submitted in the white paper.
(Further exchange of remarks between M. BARADUC and the
CHAIRMAN not fully interpreted)
(Interpreter): The Chairman pointed out that the last
sentence had been altered to read: "... shall cease not later than
six months after such determination" and the French delegate replied
that he could only accept the existing text: "shall cease six
months after such determination."
CHAIRMAN (Interpretation): This alteration has been suggested
by a Sub-Committee on which there is a French member: p 58 E/PC/TAA/PV/41
M. P. BARADUC (France) (Not interpreted)
CHAIRMAN (Interpretation): Does the Commission agree with
the suggestion of the Legal Drafting Committee? The French
delegate thinks that the Legal Drafting Committee has slightly
gone beyond its rights. Is there any objection to leaving the
text as it was: "... shall cease six months after such
determination"?
Mr. GEORGE BRONZ (U.S.A.): I understand that the Legal
Drafting Committee had in mind that, since the Member would have
the complete freedom to choose whether to cease immediately or
to cease three months after, or six months after, there would be
no additional limitation on the Members action, and it felt that
it would be rather curious to say that the action must cease at
one precise date and not recognise that the Member might cease
such action earlier. I do not think it makes any difference
in meaning. I think the Legal Drafting Committee had a wise point
of drafting, but I do not consider it a matter of substance.
CHAIRMAN (Interpretation): I feel certain that M. Baraduc
will agree with the opinion of the United States Delegate.
M. P. BARADUC (France) (Interpretation): I do not attach
a very great importance to this question.
CHAIRMAN (Interpretation): Paragraph 4. No remarks?
Adopted.
Paragraph 5. No remarks?
Adopted.
H. E. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman,
Czechoslovakia recognises that the principle of multilateralism 59 E/PC/T/A/PV/41
and non-discrimination is desirable for the expansion of world
trade. However, she is aware of the fact, and she wishes to
emphasise, that, under circumstances of great economic difficulties
such as those prevailing in most countries at present bilateral
arrangements can contribute also to the expansion of world trade.
Further, Czechoslovakia feels that the words "substantial and
widespread disequilibrium" should be understood first of all in
the sense that it applies to countries with whom the Member has a
substantial part of its trade, as it is of little use to the
Member that in some other pars of the world there prevail
conditions of prosperity.
The Czechoslovak Delegation did not raise objections to the
Draft Charter text of Article 28, and had the approval of its
Government, as this draft aimed at the desirable flexibility of
provisions. With regard to the new draft text, however, the
Czechoslovak Delegation is unable to define its attitude until it
will be in a position to take into account which States will be
likely to join the I.T.O., to what extent their currencies will
be convertible, how large a proportion of the aggregate foreign
trade of the country will be covered by States adhering to the
provisions in question, and, if there are non-Members, how the
relations to them will be settled,
That is why we reserve our opinion on this Article which needs
the further study of our Government, especially as we were faced
with entirely new amendments presented here only during this
Session. 60
ER E/PC/T/A/PV/41
M. E.L. RODRIGUES (Brazil): Mr. Chairman, I am sorry to have
to make a reservation on paragraph 5 (b), but I could not agree with
the present text. We shall have to reserve our position on it , at
least provisionally.
M. F. GARCIA OLDINI (Chile) (Interpretation): The Chilian
delegation reserve their position on the whole of Article 28. The
final decision of the Chilean Government will be taken at the World
Conference.
Dr. A.B. SPEKENBRINK (Netherlands): Mr. Chairman, will you
allow me to say a few words with regard to all these reservations
that have now come up. I wonder what worth we can attach to the
acceptance of all these Articles especially those very technical
Article which have come to our attention in a final draft a very
short time ago. I must say that I, myself, cannot judge all the
implications thereof. Nevertheless, I am prepared to agree with
them, but I would be in a much more difficult position if this
acceptance at this moment should mean also that the Articles should
go as they stand at present to the General Agreement on Trade Tariffs
because we have definite commitments, and moreover, I think that a
at home
further study/of this problem which is so complicated before the
World Conference might lead to some argument from our financial
people who are much more qualified to judge ;:Kmthan I am. That
might induce us to put forward some arguments at the World Conference
so I think that although I entirely agree that at the World Confer-
ence we should as a rule try to keep to what we have decided here,
there should be a certain liberty - especially with these very
difficult Articles - to speak, and even support amendments if they
are of a nature to be supported. 61
E/PC/T/A/PV/41
I state this here because we can now all enter formal reserva-
tions, and I do not know what we are really going to accept at the
plenary session. I therefore would like to ask the guidance of the
Chair with regard to the real importance to be attached to the
acceptance of these Articles here, and with regard to the liberty
to be able to come forward with agreemente.
CHAIRMAN (Interpretation): Mr. Speekenbrink, you have your-
self given a reply to your own question when you said that we should,
as far as possible, keep to the text adopted here while retaining
some freedom, namely, that if after examination at home we find the
possibility of making improvements, those improvements should be
suggested. I think that this is the best reply to your own question.
As regards the second question, namely, what will be the case
of Articles on which reservations are made with regard to the Tariff
Agreement, this is a matter which Cannot be dealt with here, but
should be dealt with by the Committee on Tariff Agreements, and this
question should therefore be raised in that Committee.
Does any other delegation wish to speak on Article 28. 62
J. E/PC/T/A/PV/41
MR. J. R. C. HELMORE (United kingdom): Mr. Chairman, we have
some notes in the Report of the sub-committee, and I wonder
whether the Commission ought to look briefly at these notes for
two purposes: to see whether any of them could be suppressed, or
to see what status we intend them to have.
I do not intend at this minute to enga e on a problem which
his been exercising Dr. Holloway very much in connection with the
Technical Articles, the problem of how best to indicate that those
notes have a particular status, but I gather that we are to discuss
that separately. However, I wonder whether this Commission
ought, on these Articles, to indicate whether these Notes have a
Particular status or not, whether they are of the kind which are
necessary to record or remove a reservation.
CHAIRMAN (Interpretation): Referring to the reservations
and notes on page 18 of document E/PC/T/183, there is an Australian
reservation which has been made, then comes a Unitd Kingdom
reservation which has been withdrawn, then - Czechoslovak reservation
which has just been repeted, and two French reservations.
M. BARADUC (France) (Interpretation): Regarding the French
reservations, taking into account what has just been said by you,
Mr. Chairman, with regard to the action to be taken on these texts,
which, after all, are only a draft to be submitted to the World
Conference, the Fench Delegation withdraws it reservations.
(The CHAIRMAN read the Note to Article 28, paragraph 5, and
said that considering that 3 of Article 28 had been
adopted, this Note could be withdrawn). S3
J. E/PC/T/A/PV/41
MR.G. BRONZ (United States): Mr. Chairman, in the
sub-committee, the United States raised a considerable question
about the draft of paragraph 3. We followed the general policy
in the sub-committee of deleting references to consultation with
the International Monatary Fund in view of the new draft of
paragraph 29(2), which we have not yet reached for consideration.
However, in the case of paragraph 3 of Article 28, it was our
feeling that the deletion of reference to the Monetary Fund might
be construed to exclude consultation with the Fund on these
questions. Questions of discrimination under Article 28 do
involve financial matters, and the question was raised in the
sub-committee and the sub-committee agreed upon the text of this
note, and we feel that the note is necessary here in order to
avoid a reservation.
MR. J.R.C. HELMORE (United Kingdom): Mr. Chairman, I wonder
if I could ask the Chairman of the sub-committee to tell us what
the reservation was to that Note?
MR. J.G. PHILLPS (Australia): I do not think I can
completely answer this question, Mr. Chairman, The position was
that the Committee agreed to the terms of the Note, and, when it
was considering whether it should go into the general part of the
Report or into this part dealing with reservations and Notes, the
United States Delegate said something along the lines of what he
has just said now. In view of that, the Committee left the Note
in this part, but I do not remember that there was any specific
reservation or that the United States Deletgate expressed any
specific text. 64
CHAIRMAN: The Delegate of the United Kingdom.
Mr. J.R.C. HELMORE (United Kingdom): Mr. Chairman, I
am very sorry to make a nuisance of myself on this. I think
that the Preparatory Committee as a whole is probably going
to have a great deal of difficulty in reaching an acceptable
Solution on Dr. Holloway's point, which I said I would not discuss,
and it does occur to me that of all the possible solutions
which we may find as to a method of recording these notes along
with the text of the Charter in due course (or, I suppose, the
text of the General Agreement, although you have said that we
must not discuss that) this one would be extraordinarily
difficult, because it simply records, as far as I can read it,
the result of discussion in the Sub-Committee.
CHAIRMAN (Interpretation): But if this note is approved
by the Commission, it becomes a note presented on behalf of
the Preparatory Committee.
Mr. J.R.C. HELMMORE (United Kingdom): But what worries me
is how a note in this form is to be given any status in the
light of any of the suggestions that have been made for giving
other notes status. I do not want to labour the point now.
I would merely like to say that it may be necessary to come
to this question as to how this note is to be recorded when
we have settled the question of where we are going to put the
notos and how we are going to put the notes.
CHAIRMAN (Interpretation): Then we keep the substance
of the note and later we shall try to find out what action
can be taken with regard to the note.
article 29 - Exchange Arrangements - paragraph 1.
No remarks? (Adopted).
E/PC/T/A/PV/41
V 65
V E/PC/T/A/PV/41
Paragraph 2.
The Delegate of New Zealand.
Mr. G.D.L. WHITE (New Zealand): Mr. Chairman, on paragraph 2
we find the last sentence unacceptable - that is the sentence which
provides that the Organisation shall accept the determination of
the Monetary Fund on certain matters.
Our view is that paragraph 1 provides for consultation with
the Monetary Fund, the first two sentences of paragraph 2 provide
for full consultation and co-operation with the Monetary Fund, and
that this enables the I.T.U. to avoid setting up a duplicate
statistical and research organisation on these matters.
That, in our view, is the correct way that this matter should
be handled, and, we think that the I.T.O. should give special
weight to the opinions of the Monetary Fund; but we are not
prepared to go so far as to say that the Organisation shall accept
the determination of the Monetary Fund on the matter set out in
the last sentence of paragraph 2. We realise that the last
sentence is drafted in such a way that certain of the criteria
in Article 26, paragraph 2(a) are left to the Trade Organization,
and that the final decision in cases involving these criteria
rests with the International Trade Organisation. But if we
say that it is going to be mandatory upon the International Trade
Organization to accept the determination of the Monetary Fund
on these matters specified, it might be that we would find that
Article 26 itself was unacceptable to New Zealand.
The first two sentences of this paragraph provide for this
fall consultation with the Monetary Fund, to avoid duplication
of functions and to avoid also conflicting decisions, and in our
view that is all that ought to be provided for. We find this new
text is a major amendment of substance as compared with the New York V E/PC/T/A/PV/41
text on this matter.
We would support the wording proposed by Australia, which
would alter the words "shall accept the determination" to the
words "shall give special weight to the opinions of the Inter-
national Monetary Fund". I do not wish to enter a reservation
on this matter at this stage, because I think that the wording
proposed by the Delegation of Australia should first of all
receive consideration by this Commission.
CHAIRMAN: The Delegate of Australia.
Mr. J.G. PHILLIPS (Australia): Mr. Chairman, as is
recorded in the Report of the Sub-Committee, we disagreed
with the view of the majority of the Sub-Committee on this
point. We made a reservation, and we maintain that
reservation. I do not wish to go any further into the
reasons for our view, because we have circulated a document
(W/279) which sets them out in full.
Mr. J.R.C. HELMORE (United Kingdom): Mr . Chairman, I
have two things to say about this sub-paragraph. The first
is that I hope the Delegations of Australia and New Zealand,
on thinking further about this, may be able to come to the
view that, after all, the text put forward by the Sub-Committee
is, shall I say, "not so bad". I do not expect them to come
to the view that it is perfect, but they might come to the
view that it is acceptable.
The Orgzanization has a duty of reaching a decision on
certain criteria which is set forth in Article 26. In so
doing, it is required to accept, in the Sub-Committee's draft,
the determination of the I.M.F. on four things: what
constitutes a serious decline of a Member's monetary reserves;
what is a very low level of its monetary reserves, and what is
a reasonable rate of increase, and finally, it is required to
accept the determination on the financial aspects of other
matters covered in consultation in such cases.
66 67
Clearly it would be for the International Trade
Organization to have, so to speak, the last word on what was
a financial matter. With that definition of the matters on
which the ITO should accept a determination of the IMF, I would
regard the Sub-Committee's text as acceptable. I would, however,
very much prefer not to adopt one of the suggestions made by
the Legal Drafting Committee, which is to leave out the word
"final" in the third line on page 27. The word "final", I think,
was inserted by the Sub-Committee intentionally. I suspect the
Legal Drafting Committee, remo..ed it without appreciating the,
nuance thet was intended, to be given by using the rather less
usual phrase "final decision".
I might perhaps add that I mentioned to Dr. Gutierrez
my intention of suggesting that the word "final" was retained ,
and he said that speaking not for the Legal Drafting Committee
but as a Member of the legal Drafting Committee, he could see
no difficulty in that.
CHAIRMAN: Mr. Rodrigues, The Delegate of Brazil.
Mr. RODRIGUES (Brazil): Mr. Chairman, I fully agree with
the Representative of the United Kingdom. We should like to
have this word. "final" retained .
CHIRMAN (Interpretation): Now we have to take a decision
on the Australian Amendment, supported by the New Zealand
Delegati on.
Dr. Coombs points out to-the Chairman that this is not
an Amendment, but a reservation. Now the New Zealand
Delegate has proposed an alteration in the text, and this
alteration would be in conformity with the Australian reservation.
Therefore, if it is adopted , the Australian Delegation will be
satisfied . 68
G E/PC/T/A./PV/41
Mr. WHITE (New Zealand): Mr. Chairman, I do not wish to be
put in the position of proposing an Australian Amendment which
is not really an Amendment but which is a reservation; and my
purpose in raising this matter was to explain our point of view,
to hear the explanations of other Delegations on this matter -
and I think Mr. Helmore put his explanations - but I do not wish to
propose an Australian Amendment, and therefore what I propose to
do is to add our reservation to the Australian reservation.
CHAIRMAN (Interpretetion): Note will be taken of the New
Zealand reservation.
Mr. SPEEKNBRINK (Netherlands): Mr. Chairman, I have not so
much an; objection to accepting the determination of the
International Monetary Fund, as to what constitutes here "a decline"
and so on; but I find it a little difficult to accept the
determination of the International Monetary Fund as to the
financial aspects of other matters covered in consultation in
such oases .
That is a little bit too loose for my liking.
CHAIRMAN (Interpretation): The Delegate of the
Netherlands, do you wish to add...
Mr. SPEEKBRINK (Netherlands): Well, I would say I have
no objection to it, Sir, but I do not know what are "financial
aspects of other matters covered in consultation in such oases".
What is the meaning of that?
CHAlRMAN: The Delegate of the United Kingdom.
Mr. HELMORE (United Kingdom): Would it help, Mr. Chairman, G 69 E/PC/T/A/PV/41
if I give Mr. Speekenbrink an example.
In the previous words there is nothing about what happens
in en imminent threat case in that Article 26. That is to say,
when a Member is facing an imminent threat, there is no determination
reserved to the ITO, and it is perfectly obvious that in many
imminent threat cases matters to be taken into consideration may be
almost entirely trade questions, such as, for instance, the
imminent threat to Australian's balance of payments through the
failure of her wheat crop. I say nothing about what would happen
if all the sheep died. 70 E/PC/T/A/PV/41
Equally there might be, in the case of another country, some
financial aspect of the imminent threat on which I should have
thought the assistance of the International Monetary Fund
would be extremely useful to the ITO.
CHAIRMAN (Interpretation):
satisfied with the explanation.
I hope Mr. Speekenbrink is
Mr. SPEEKENBRINK (Netherlands): I am not entirely
satisfied with the examination, but I will not insist.
CHAIRMAN (Interpretation): Is there any objection to
Mr. Helmore's amendment to maintain the word "final" in the
third line of Page 27?
M. BARADUC (France) (Interpretation): I think it is
absolutely essential to maintain the text as prepared by the
Sub-committee, but in French it should read: "its final
decision."
CHAIRMAN ( Interpretaion):
carried,
Are there any
Paragraph 3:
Paragraph 4a
The amendment is therefore
other remarks concerning Paragraph 2?
(Agreed)
No remarks?
(Agreed)
There is a Note to Paragraph 4 of
Article 29.
The Delegate of New Zealand
Mr. B. D. L. WHITE (New Zealand): Mr. Chairman, I am
aware of the Note to Paragraph 4, but I would still like to
ask for a clarification of what is meant by frustrating the
intent of the provisions. The previous text on this subject
referred to the frustrating of the purposes of either S 71 E/PC/T/A/PV/41
Organization, I have listened to quite a lot of debate in
the Sub-committee on this matter, but it seems rather difficult
for a country which is not at present a Member of the Monetary
Frund to be asked not to frustrate the intent of the provisions
of the Monetary Fund, and I must ask for a clarification of
exactly whet these words mean in such a circumstance.
CHAIRMAN : The Delegate of Australia.
Mr. J.G.PHILLIPS (Australia): Mr. Chairman, I am not
sure that I can add much to the first sentence of the Note.
It says: "The word frustrate is intended to indicare, for
examples that infringements by exchange action of the btr
of any Article of this Charter shall not be regarded as
offending against that Article if in practice there is no
appreciable departure from the intent of the Article "
Perhaps I should add that one of the reasons why the word
"purposes" as used in the New.York text was deleted was because
that would probably have referred enly to Article 1, and the
changes in Article 1 made in this meeting at Geneva gave the
Organization, I think, only one purpose, which was, in effect,
to carry out the intentions of the United Nations Charter -
or the relevant intentions - and the other things which had
previously been purposes were named objectives.
I am not suro that I can really a dd anything to make
the point clearer,
CHAIRMAN (Interpretation): Is that explanation satisfactory
to the New Zealand Delegate?
Mr..WHITE (New Zealand): Mr. Chairman, I think it is
much clearer that way, when you are talking about exchange action S 72 E/PC/T/A./PV/41
frustrating the intent of the provisions of something in the
Charter, than it is when you are talking about the complementary
process where you are not, by trade action, frustrating the
intentoof the provisions of thactti±tles of Agreement of an
organization to which you do not have to belong. I do not
think it is at all clear in that case, but I do not press for
any further explanation,
CHAIRMAN (Interpretation): Are there any further remarks
on Paragraph 4?
The Delegate of Canada.
Mr. J.J.DEUTSCH (Canada ): Mr. Chairman, we regard the
Note to Paragraphs 4 and 8 as essential, as an official
explanation of the text, and would want the Note treated in that
way in the final disposition off this Report.
Mr. F. Garcia OLDINI (Chile) (Interpretation): I support
that suggestion.
CHAIRMAN (Interpretation): That suggestion will be met.
We pass to Paragraph 5.
Mr. HELMORE (United Kingdom): This will now be Paragraph
6, Mr. Chairman.
CHAIRMAN (Interpretation): Paragraph 5 Will become
Paragraph 6. Are there any remarks?
(agreed)
We come to the former Paragraph 6, the new paragraph 7,
Mr. HELMORE (United Kingdom): There is a consequential
alteration, Mr. Chairman, in the numbaring on Page 29 of the
Legal Drafting Committee's text. It shod read: "A special
exchange agreement between a Member and the Organization
under Paragraph 6". 73 E/PC/T/A/PV/41
CHAIRMAN (Interpretation) Former 7, new 8 Any remarks ?
Former8, new 9 and last
H. E. Z. AUGENTHALER (Czechoslovakia) Mr. Chairman, as
Article. 9, paragraphs (a) and (b), was accepted, then we withdraw
our reservationn on Article 27, but I would request that to this
Article. should be added a note in the sense that was agreed by the
sub-Committee, that is that a Member is permitted to require an
Import licence or permit to be utilised for the importation of a
product from a particular country or source, for balance-of-payments
reasons. That is the last remark, No. 8, in the comments of the
Sub-Committee.
CHAIRMAN (Interpretation): To what note do you refer,
Mr. Augenthaler?
H. E. Z. AUGENTHALER (Czechoslovakia) : Note No, 8, under
Part III, Comments of the Sub-Committee: English text pages
22 and 23.
CHAIRMAN (Interpretation); Everybody has this note. It is
on pages 22 and 23 of the English text, Document E/PC/T/163.
Mr. F GARCIA OLDINI (Chile)!(Interpretation): Has this not
been adopted, Mr. Chairman?
CHAIRMAN (Interpretation): No, we hare not adopted it. This
note should be worded in a different manner and appear, not as a
remark of your Delegation, Mr. Augenthaler, but as a general remark,
H. E. Z.AUGENTHALER (Czechoslovakia): Then I would suggest
the following :
"A Member is permitted to require an import licence or permit-
to be utilised for the importation of a product from a
particular country or source, for balance-of-payment reasons, p 74 E/PC/T/A/PV/41
CHAIRMAN (Interpretation): Does everybody agree? The
note had already been approved by the sub-Committee.
Mr. GEORGE BRONZ (U.S.A.): The text of the sub-Committee's
note is being proposed as a general note? The note as it is
given by the Sub-Committee is entirely acceptable to us, I do
not know whether the re-phrasing as suggested here might raise
other questions.
Mr, WYNDHAM -WHITE (Executive Secretary). As I understand
the suggestion, Mr. Augenthaler is proposing to amend the note
at the foot of page 22 and top of page 23 so as to express the
opinion in the affirmative - that the Member is permitted....
Whereas the note of the Sub-Committee merely receives the
communication and asks the question.
Mr. GEORGE BRONZ (U.S.A.): Well, Mr. Chairman, the
Sub-Committee's recommendation on the subject, contained in
its Report, or the note inserted by the Sub-Committee, is!
"The Sub-Committee considered this communication and felt
that the text of Article 29, paragraph 8 (ii) in its present
form took due account of the problems raised by the communication
from the Sub-Committee on Articles 25 and 27."
We discussed it at length in the Sub-Committee and it is
not my recollection that the Sub-Committee was prepared to
accept a blanket statement that"a Member is permitted to
require an import licence or permit to be utilised for the
importation of a product from a particular country or source, for
balance-of-payments reasons." Obviously if you add that as a
provision by itself it would permit discrimination in the
application of import restrictions on a whole new and simple
standard which is entirely divorced from the standard which
we have just finished writing into Article 28. p 75 E/PC/T/A/PV/41
The much narrower proposal that the Czechoslovakian
Delegation had in mind, was considered, and it was the:
feeling of the Sut-Committee - if I may take the liberty
of giving my recollection of our discussions _ that the
present text as amended did take account of the Czechoslovakian
point, that it was adequate to cover their point of a, single.
piece of paper covering both import licences and exchange
control, but it was not intended to provide a new and
sweeping exception to the rule of non-discrimination. ER 76 E/PC/T/A/PV/41
Mr. J.R.C. HELMORE (United Kingdom): Mr. hai rman, I
wonder if I could make a suggestion which I think might .olve the
difficulty quite substantially. It appears from the words in
the previous Note at which we were looking that the question was
transmitted from one sub-Committee to another and that is why it
is here in the form of question and answer. What we suggested
doing is to take the Note on page 20 of Document 163 which is
called Note to Article 29, paragraphs 4 and 9, and leave it as it
is down to where it is typed, an d then go on:
"Another example would be that of a Member who specified on an
import license the country from which the goods might be imported
for the purpose not of introducing any additional element of dis-
crimination in its import licenses but of enforcing permissible
exchange controls."
CHAIRMAN (Interpretation): Does Mr. Augenthaler agree?
Then it is agreed.
Are there any further remarks on paragraph 9?
Article 29 is therefore adopted.
Mr. GEORGE BRONZ (United state) Mr. chairman , at the
beginning of this meeting this afternoon, a New Zealand amendment
was adopted to paragraph 3 (b) (i) of article 26, You will recall
that in discussion of that amendment, I raised the question of
whether in addition to the construction given by the New Zealand
delegation it was not susceptible of another construction which
might seriously widen the provisions of article 26. I have coc-
sulted wigh my delegation and the Uaited States feel that it will
be necessary to reserve its position on this amendment unless then
can be an explanation to exclude the interpretation which, as far 77
ER E/PC/T/A/PV/41
as I understand it, nobody here considered offensive, and I would
therefore suggest that the following Note would make it possible
for us to accept the amendment as adopted earlier this afternoon.
I shall read it slowly:
"The phrase 'notwithstanding the provisions of paragraph .2
of this Article' has been included in the text to make it quite
clear that a Member's import restrictions otherwise 'necessary'
within the meaning of sub-paragraph 2 (a) shall not be considered
unnecessary on the ground thet a change in domestic policies as
referred to in the text could improve the Member's monetary
reserve position."
The phrase is not intended to suggest that the limitations in
paragraph 2 are affected in any other way. 78
CHAIRMAN (Interpretation): What is the opinion of the
New Zealand Delegate?
MR. L.C WEBB (New Zealand): Mr. Chairman, I do not want to
raise any difficulties ovecr a purely formal puint, but I would like
time to examine this Note a little more carefully. I wonder
whether Mr. Bronz would be agreeable to send this Note to the
Logal Drafting Committee with the text is a whole. The matter,
could, perhaps, be settled in that way.
MR. G. BRONZ (United States): I would have no objection to
any procedure the Chairman feels would most expeditiously dispose
of the matter.
CHAIRMAN (Interpretation): I quite realise that it would
be difficult for the New Zealand Delegate to accept this now, but
I suggest that he keeps in contact with Mr. Bronz and that both
keep in contact with the Secretariat.
DR. SPEEKENBRINK (Netherlands): Mr . Chairman, I would like
to say that, if a Note to that effect is adopted, and also in view
of your answer to my question with regard to our acceptance of the
Charter, I woulr withdraw my reservation.
CHAIRMAN (lnterpretation): Thank you.
I will now thank you all for the effort which you have made
these last two days
The meeting is adjourned.
The meeting rose at 8.50 p.m.. |
GATT Library | cm177yv5168 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Forty-Second Meeting of Commission "A" Held on Monday, 18 August 1947 AT 10.30 A.M. in the Palais Des Nations,Geneva | United Nations Economic and Social Council, August 18, 1947 | United Nations. Economic and Social Council | 18/08/1947 | official documents | E/PC/T/A/PV/42 and E/PC/T/A/PV.41-43 | https://exhibits.stanford.edu/gatt/catalog/cm177yv5168 | cm177yv5168_90240209.xml | GATT_155 | 8,448 | 51,962 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/42
18 August 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
FORTY-SECOND MEETING OF COMMISSION "A"
HELD ON MONDAY, 18 AUGUST 1947 AT 10.30 A.M. IN
THE PALAIS DES NATIONS, GENEVA.
H. E. Mr. Erik COLBAN (Chairman) (Norway).
Delegates wishing to make corrections in their speeches should addre as
their communications to the Documents Clearance Office, Room 220
(Tel. 2247).
Delegates are reminded that the texts of interpretations, which do not
pretend to be authentic translations, are reproduced for general
guidance only; corrigenda to the texts of interpretations cannot,
therefore, be accepted.
NATIONS UNIES S E/PC/T/A/PV/42
CHAIRMAN: The Meeting is called to order.
M. Suetens has asked me to apologise to you for his
absence this morning, especially as we are going to discuss
difficult and important problems.
Before opening the discussion on Articles 14, 15 and 24,
there is one other point which I should like to deal with.
It relates to Paragraph 4 of Article 38. That was passed
over previously by Commission A, because it was argued that it
was impossible to decide whether or not the paragraph should
be retained until we had discussed Articles 13 (A) and 66 (3).
These discussions have now taken place and unless there is
any objection I take it the Commission agrees that Paragraph
4 of Article 38 becomes superfluous and should be left out.
Are, there any objections to the deletion of Paragraph 4
of Article 38.
The Delegate of France.
M. ROYER (France) (Interpretation): The French
Delegation made some reservations when this question was
discussed in Commission B, and we are grateful that a delay
of 48 hours was granted to examine the question more thoroughly
and to make it possible for us to receive instructions from
our Government.
After examination, the French Delegation accepts the
deletion of Paragraph 4 of Article 38. In order, however,
to avoid erroneous interpreta ion, the French Delegation
would be grateful to the Secretariat, when a Prces Conference
takes place, if they would give the necessary clarification
to the journalists, so as to avoid any misunderstanding.
S S E/PC/T/A/PV/42
CHAIRMAN: (Interpretation): The Executive Secretary
informs me that the desire of the French Delegation will be
taken care of.
Dr. H.C.COOMBS (Australia): Mr. Chairman, I have a
slight difficulty in accepting the deletion of this clause.
Delegates will remember that in the discussion in the
Commission I drew attention to the problem which we have in
relation to certain colonial territories, the territories
of Papua and New Guinea, for which Australia is responsible. 4
E/PC/T/A/PV/ 42
We had, as I informed the Commission at that time, an
arrangement whereby while those territories have their own in-
dependent tariff which is essentially a revenue tariff which is
quite independent of Australia and to which goods from Australia
are subject, they have preferential entry into the Australian
market for their main products. So, as I pointed out, this arrange-
ment is not in any sense in Australia's commercial interests; in
fact, the contrary, but we believe it would be a good arrangement
since it is in the interests of the native population of those
territories, and we asked that this arrangement should be taken into
account in relevant parts of the Charter. You will recall that
we were assured, so far as any existing arrangement was adequately
covered by Article 14, that any possible desirable extension to this
arrangement could be granted under Article 38(4) if we made an
adequate case. We are quite content to allow any such subsidiary
arrangement to be subject to investigation, and to the report of
the Organisation, and the approval of any other country which might
consider itself interested. We are a little worried, however,
that the deletion of the reference to this provision might be inter-
preted as meaning that any extension of this arrangement would be
invalid under the Charter.
I am not quite sure whether this warrants our opposing the with-
drawal. It is clear, of coourse, that under Article 66 we could ask
for an exemption from any of the obligations of the Charter, and
perhaps it would be possible far us to act under that Article; but,
clearly, it is less obviously related to the particular problem we
have in mind, and for that reason I would like a little further
time to think about this Article. If it is the view of the Com-
mission that Article 38 should be redrafted, then I would be prepared .5
ER E/PC/T/A/PV/42
to inform my Government of that fact and week the Commission's
approval for the withdrawal of our reservation.
Mr.R.J. SHACKLE (United Kingdom): Mr. Chairman, my delega-
tion would, I think, be glad to see paragraph 4 of Article 38
deleted; that is, largely from a presentational,publicity point of view.
I am afraid it is the hard fact that the uninstructed public in the
world tends to regard many international conferences as being rather
in the nature of gibberish, and if you look you will find that it
does not mean very much. Any critic who wants to make that point
with regard to the Draft Charter would find a very fine piece of
evidence if he looked at the Article about preferences. First of
all he would see Articles 14 and 24 which talk about limiting and
eliminating preferences. He would then find Article 13(A) and (B)
which makes provision for new preferences. He would then find
Article 38(4) which makes another provision for new preferences -
unspecified preferences. And, finally, in Article 66 or Article 53
he would find still other provisions, and, putting those extracts side
by side, would provoke a nice piece of public criticism. Therefore,
we would be glad from the presentational point of view to see that
Article 38(4) should disappear. I should think that the Australian
case could equally be met under Article 66.
CHAIRMAN: The delegate for India.
Mr. S. RANGANATHAN (India): Mr. Chairman, I do not wish to
express any opinion on the merits of this question, but would it
be unduly inconvenient to the Commission if I suggest that we take
this matter up the first thing after lunch. 6
ER E/PC/T/A/PV/42
CHAIRMAN: I am rather reluctant to leave this question sus-
pended as we are approaching the end of our discussions. At our
previous meting we had a general survey of Articles 14,15,16 and
64, and the delegate of Australia brought up the same point as he
did to-day, and we all felt very sympathetic to the difficulties he
spoke about. Would it be possible that we agree to omit paragraph
4 of Article 38, it being understood that that does not prejudice
in any way the point brought up by the Australian delegate? We
believe that, at/any rate to some extent,the case as covered by Article
66, and if it is found after further consideration not to be entirely
satisfactory, the question could be taken up again on another
occasion. 7
J. E/PC/T/A./PV/42
Would that solution be agreeable to the Australian Delegate?
DR. H.C. COOMBS (Australia): Yes, Sir,
CHAIRMAN: The Delegate of India.
MR. S. RANGANATHAN (India): Mr. Chairman, I am not sure that
I should have to enter a reservation at all, but if I have to, if
you. would permit me to record a reservation in the afternoon, I
have no objection to this procedure.
CHAIRMAN: The Delegate of Chile.
M. A. FAIVOVICH (Chile) (Interpretation) I must take the
same attitude, Mr. Chairman, as the Indian Delegate. I wish to
declare here that paragraph 4 was left in a beyance because the
final text of Article 13B was not yet known and it is still not
known, because that part which relates to the Voting question has
been deterred until the World Conference in Havana. Therefore, I
cannot see how we can take a decision to delete paragraph 4, which
is necessary to us.
CHAIRMAN: Are there any further remarks?
MR. J.M.. LEDDY (Ulnited States): Mr. Chairman, paragraph 4 of
Article 38 was introduced in London with a view to meeting, if
possible, the views of the Delegate of the Lebanon, that is, the
Suggestion that there should be not merely a general provision but
a specific provision in Article 66, paragraph 3 envisaging the
possibility for economic development purposes.
Here in Geneva we have worked out an Article e dealing with that
particular point in Charter IV, and it was our understanding that, J.
that Article being in Charter IV, there was no need for repeating
an additional provision on this subject in Article 38. In deleting
paragraph 4, the substance of Article 38 is, of course, in no way
changed, but we attach considerable importance to its deletion and
Article 13B, I believe, should be maintained.
CHAIRMAN: The Delegate of the United Kingdom.
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, there is
one other point that I would like to suggest for the consideration
of the Chilean Delegation, and it is that I do not see what they
can lose from the disappearance of this paragraph 4 of Article 38,
If looked at from the point of view of the Voting provisions.
The point which has been left in suspense in Article 13B is
whether you should have a simple majority, or, at the other extreme,
a two-thirds majority of those presented and voting, or some
Intermediate solution between the two. On the other hand,
Article 38, paragraph 4 provides a tighter voting method than any
of those which are, I think, contemplated under 13 B. It
contemplates that you must have two-thirds of the Members present
and voting and, .moreover, that they must constitute a majority of the
Members of the Organization.
So , looking,at it from the engle of voting, I cannot see what
would be ine by retaining Article 38, paragraph 4 if 13B stands.
The requirement in Article 38, paragraph 4 would be,:in any case,
a tlghter requirement than that envelved in 13B.
I would like to suggest that point for the consideration of
the Chilean Delegate. 9
V E/PC/T/A/PV/42
CHAIRMAN (Interpretation): May I ask the representative
of Chile if, after hearing the declarations of the representatives
of the United States and the United Kingdom, he is ready to
accept the suppression of paragraph 4?
M. Angel FAIVOVICH (Chile) (Interpretation): There are
two aspects of the discussion. On the one hand, there is the
question of voting, which the Commission decided to refer to the
World Conference in Havana. On the other hand, there is a
question of a wider scope and which is of particular interest to
us.
While Article 13B provides for preferential arrangements
with a view to economic development, paragraph 4 of Article 38
has a much wider scope, and we are in favour of the maintenance
of that paragraph. Preferential arrangements may be necessary
for reasons that are not only of an economic nature; there may be
several other reasons. This paragraph was maintained in London
and New York, and we are in favour of its being retained.
Dr. A. B. SPEEKENBRINK (Netherlands): Mr. Chairman, is there
any objection to having a special note here saying that we have
deleted paragraph 4 of Article 38 in view of the new addition to
Article 13, and stating that while we have deleted this, it does
not mean that there cannot be new preforential arrangements,
because Article 66(3) makes it possible?
CHAIRMAN: Would that suggestion be agreeable to the
Commission?
M. Angel FAIVOVICH (Chile): No.
.CHAIRMAN: Then I have to make the proposal to put
paragraph 4 in square brackets, with a note saying that the majority 10
E/PC/T/A/PV/42
of the Preparatory Committee favour the deletion of this
paragraph.
Mr. J.M. LEDDY (United States): I propose that the
paragraph be deleted, and that the Delegate of Chile reserve
his position.
M. Angel FAIVOVICH (Chile) (Interpretation): I think that
the Chilean Delegation is not the only one and that there are other
Delegations in the same position. Therefore, I am inclined to
accept the Chairman's proposal.
Mr. R.J. SHACKLE (United Kingdom): Before we come to a
decision on this, there is one point I would like to suggest for
consideration: Surely there can never be a proposal for a
preferential arrangement which has no economic aspect or
justification whatsoever? If it has only a subsidiary
justification of this kind., it could still come under Article 13B.
It is not essential that the whole thing should be purely on
economic development grounds. The fact that economic development
is one of the justifications surely suffices.
CHAIRMAN: The difference of opinion now makes it quite
clear that we are not going to achieve a unanimous position as
to the maintenance or the deletion of this paragraph. It is
then only a question of drafting, as to how this difference of
opinion should appear. I am quite convinced that the majority
of the Commission propose the deletion, and I think that the
proposal made by the Delegate of the Netherlands is, from the
drafting point of view, better than mine - that is, that we
delete the paragraph and state that the deletion was made on the
understanding that the purpose of the paragraph was covered by
Article 13B and article 66, and then add that certain Delegates
favoured the maintenance of the paragraph. Is that agreeable to
everybody? 11
G . E/PC/T/A/PV/42
CHAIRMAN: The Delegate of Brazil.
Mr. TORRES (Brazil): (Interpretation): Mr. Chairman,
I would just like to raise a point of order. Do I understand
that the other Delegations have doubts as to the deletion of
this paragraph? I am in agreement to insert the note, and in
that case would agree to drop the paragraph altogether; because
if so I do not see why we should say "certain Delegations".
Lat the little paragraph explain the reasons, and then say one
reservation was made.
Dr. HOLLOWAY (South Africa): Mr. Chairman, on a point of
order. In the terms of Rule 21 of the Rules of Procedure,
I propose the closure of the debate.
Mr. LEDDY (United States): On the question of whether we
shall finish,Mr. Chairman, what proposal is before the Committee?
CHAIRMAN: Before the Committee now is my proposal, which
is based upon that of the Netherlands Delegate, that we delete
paragraph 4 of Article 38 and insert a note saying that the
deletion was made because we considered that the contents were
already covered by the adoption of Articles 13(D) and 66, and I
suggested we add to that "certain Delegates prefer the
maintenance of this text".
Brazil wanted the last sentence to read, "only one Delegate",
but I cannot add that, as we have to consider the position of
the Australian Delegate. We do not make any objection but after
all, when there is any reservation made, I think it is fair to
note the fact that, there are not only, one,but/ two, perhaps three,
who would prefer the maintenance of the text. 12
Does any other Delegate than the one representing India
want the maintenance of paragraph 4?
CHAIRMAN: We have a proposal by the Delegate of South Africa
to close the Debate, and I think that all who wish to speak either
for or against this proposal should now speak.
Mr. MOBARAK (Lebanon): (Interpretation): Mr. Chairman,
I wanted to say that I associate myself with the Delegate of
Chile and accept the solution proposed by the Netherlands
Delegate.
CHAIRMAN: Well, I cannot allow any more discussion on the
substance.
The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom): I think that my right course is
in a purely formal sense to oppose the closure.
CHAIRMAN: May I take it that the proposal I made, based upon
that of the Representative of the Netherlands, is acceptable to
the Commission?
The Delegate of the United States.
Mr. LEDDY (United States): We propose replacing the words
"'certain delegates" by the number of delegates who have made a
reservation.
CHAIRMAN: The Delegate of France.
Mr. ROYER (France): (Interpretation): A note was circulated
yesterday by the Secretariat asking whether it was preferred that
the names of the Delegations should be mentioned.. I think that
the majority of Delegations are in favour of this proposal, ands 13
G E/PC/T/A/PV/42
therefore I think it would be a good thing to state what
Delegations have made reservations.
CHAIRMAN: Well, that is very fine in theory; but it commits
this Delegation to a final point of view which I do not think we
will have.
The Delegate for India has just said he might consider the
question this afternoon. Australia was willing to accept, on the
understanding that the question he brought up should remain
open. So I think that in spite of the question submitted by
the Executive Secretary, we should confine curselves in this case
to'"certain Delegates." S E/PC/T/A/PV/42
Mr. J. M. LEDDY (United States): My proposal was, Mr.
Chairman, that it should read "two or three or four Delegates,"
instead of "certain Delegates".
CHAIRMAN: I do not see that very much is gained by
replacing "certain Delegates" by "two or three Delegates,"
because if we were to call on all the Delegates I am perfectly
convinced that one or two, or three or four, might abstain
and say: "We have not made up our minds; we are indifferent."
I think "certain Delegates" expresses perfectly the position
in the Commission.
Mr. LEDDY (United States): Mr. Chairman, I was under
the impression that some Delegates merely wanted time; they
did not necessarily wish to reserve their positions. There
will be some time before the Plenary meetings and I would
much prefer that my proposition should be adopted.
CHAIRMAN: I think we should adopt the term "certain
Delegates", leaving it to the United States Delegation to
raise the question again in Executive Session.
Mr. J.G.TORRES (Brazil): Mr. Chairman, I am sorry
to say I am not in agreement with the procedure you suggest.
I think we should have a faithful representation of the facts
and, if you insist upon having "certain Delegates", we should
make sure that there is foundation for such an expression.
To my mind there are one or two Delagations who are
definitely interested in having a reservation stated.
Two others are in doubt. I think we should either state
the number of Delegations who want their reservations put in
or not mention the fact at all, but I am not in agreement
with the word "certain." 15
S E/PC/T/A/PV/42
CHAIRMAN: If that is the view of the Commission, that
we should indicate that a certain number of Delegates want
to maintain Paragraph 4, the only way out of the difficulty
now is to take a vote at the beginning of our afternoon
meeting.
Is that agreed?
Dr. J. E. HOLLOWAY (South Africa): Mr. Chairman, may I
ask for a vote on my motion? I do not want this debate to be
opened this afternoon. I went to put the ruler in the hands
of the Chairman, to prevent anybody from wasting another hour.
In the last hour nothing has been said which has not been said
about a hundred times in this Conference.
I have the right to propose this and my point in proposing
it is to give the Chairman a whip in his hand with which to
whip anybody who wants to propose opening it again this afternoon.
CHAIRMAN: There is one speaker in favour of the closure
of the debate and two against. Does anybody else wish to
speak?
H.E. WUNSZ KING (China): The Chinese Delegation is in
favour.
CHAIRMAN: Is anybody against the closure?
Mr. S. RANGANATHAN (India): Provided it does not prevent
you from taking the vote which you just wanted to, I support it.
CHAIRMAN: I thought the proposal of the South African
Delegate meant to close the debate now. We have spent an
hour on the discussion. You are in possession of a quite
reasonable proposal for the solution of the question.
I- I , - 16
S . E/PC/T/A/PV/42
There are differences of opinion with regard to
whether it should be "certain Delegates" or whether we should
give the number of those who have made reservations. I
proposed "certain Delegates." That is the proposal before
you.
The Delegate of South Africa has proposed that we now
close the debate and that we pass on to the decision as to
whether or not the Commission agrees to my proposal now.
M. Moussa MOBARAK (Lebanon) (Interpretation): You
yourself, Mr. Chairman, when you were speaking as Chairman of
the Norwegien Delegation, suggested that we should avoid,
as far as possible, any votes when there were two opinions,
in order not to influence the Havana Conference,
Now we could perhaps adopt this suggestion of yours;
we are in favour of two possibilities. I would not like to
see one majority and one minority report or suggestion
on this point and I believe we could say in our Report
that there were two points of view - this one and that one
- and not proceed to any majority or minority vote. 17
CHAIRMAN: This discussion seems to me to show very much how
tired you are after four months work. I made my proposal and I
take it that the great majority of the Commission agrees to it, and
that should close the debate.
We pass on to the consideration of Articles 14..5 and 24, and
I would appeal to delegates not to discuss the proceure more than
absolutely necessary, but only the very essential problems on their
merits. You have before you Document r.en" It is the Report of
the Legal Drafting Committee on these three Articles. We have had
more than a full general discussion on these Articles. We have had
a strong sub-Committee working very hard during several weeks on
and, besides, the members of the Sub-Committee have had
private conversations, and have been in touch with practically all
of the other delegations, so I think that these Articles on the form
in which they are now presented to us have condensed the results of
all this work.
We start with Article 1. General Most-Favoured Nation Preat-
ment, paragraph 1.
There is no amendment, and no note to the firs paragraph of c
Article 14. May I take it ttha we allgree ao tyht parasraph g?
.A JGEL AIFOiI0H11C(hile) (Intepre24atoiJ): I Tssoicat3.
yself wi h theu appeal ma e by the Ccairman t- avoid an uinecessa'y
extension of the discussion. Therefore, I shall abstain from making
once more the statements which Ihave already made at the Chairman's
Committee and in the sub-Committee. May I only recall that we
have submitted an amendment to Article 14 providing for a/preferential
regime regarding neighbouring countries under certain urdetermined
conditions, and the Executive Committee decided that this amendment
was irrelevant since it would be covered by the provisions of Articles
13 and 38. Now that these Articles have been adopted, my delegation
considers that these amendment have not be en embodied in these pro-
visions. Our amendment deals mainly with the provisions of Article 14,
and therefor we must make a reservation on this Article, I prpose
to make that reservation in Plenary Session. 18
If I understand correctly, the Chilean reservation deals with
the whole of Article 14.
The Delegate for the Lebanon.
MR. M. MOBARAK (Lebanon) (Interpretation): Mr. Chairman,
this amendment having been submitted with full agreement between
our Delegation and the Chilean Delegation, we make the same
reservation regarding Article 14.
CHAIRMAN (Interpretation): I shall ask the Chilean Delegate
to contact the Secretariat with regard to the wording of the
reservation.
Are there any further remarks on paragraph 1 of Article 14?
M. ROYER (France) (Interpretation): Mr. Chairman, there is
a slight amendment to be made in paragraph 1, in the tenth line of
page2 of the French text. The word "impositions" has been
substituted for the word "taxes" in other places, and I consider
that this should be the case here.
CHAIRMAN: Are there any further remarks?
Paragraph 1 is approved.
Paragraph 2. You have a footnote on page 2 of document
E/PC/T/V18: "The Delegate for Cuba reserved his position in
relation to preferences accorded by differential internal taxes".
Is that reserve maintained?
DR. G. GUTIERREZ (Cuba): Yes.
CHAIRMAN: Are there any further remarks on paragraph 2?
The Delegate of Belgium.
M. P. FORTHOMME (Belgium) (Interpretation):
(The first remarks made by the Delegate of Belgium refer to
the French text only). 19
E/PC/T/A/PV/42
The last remark I have to make deals with tihe shape of
sub-paragraph (b), which mentions the preferences which are listed
in Annexes B, C and D of the Charter. Now, sub-paragraph (d)
refers to preferences listed in Annexes E and F of the Charter,
but it may well happen that, at the World Conference, there will
be other Member countries which may have Colonial territories, for
instance, Portugal may have to submit a list under sub-paragraph (d),
although I understand that Portugal considers its Colonial
territories as forming one customs territory with the metropolitan
country, but this general conception may change in the meantime.
Therefore, I suggest that it should be mentioned that the
list of sub-paragraphs is not exhaustive, and that it may be
modified at the World Conference.
CHAIRMAN: Are where any further remarks on Article 14,
paragraph 2?
We have a paper E/PC/T/W/290 containing a note by the French
and Belgium-Luxembourg Delegations. It refers to the exchange of
certain specified agricultural and industrial products between
Belgium and Luxembourg on the one hand, and certain bordering areas
of France on the other hand.
The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, it is
only out of honesty that the Delegations concerned have circulated
this document before the final adoption of Article 14.
May I recall that, at the end of the last war, signed an
Agreement with the Belgium-Luxembourg Union providing for an
extremely special regime for very small quotas of live animals.
certain fruits, lime and cement, which are admitted in France under
a frontier regime, either free of change or at a very reduced rate,
and these are extremely small quantities. V 20 E/PC/T/A/TPV/42
The same applies to Luxembourg for a number of articles. We
have always considered this agreement as being a frontier
agreement. We hope that the Commission will give the same
interpretation to this very limited regime.
If the Preparatory Committee considers that this arrangement
is not covered by the provisions of Article 38, we ask for the
insertion of a special provision, but we hope that the Preparatory
Committee will agree with our own interpretation and consider
this to be frontier traffic. Of course, we are prepared to supply
the Commission with any detailed data regarding the quantities
and products involved.
CHAIRMAN: I take it that the same applies to the special
regime between Belgium and Luxembourg.
M. Pierre FORTHOMME (Belgium) (Interpretation):
Mr. Chairman, it is not a regime between Belgium and Luxembourg,
but a regime in force between the Belgium-Luxembourg Economic
Union and France, with a number of reciprocal clauses as regards
Luxembourg.
Mr. Hassan JABBARA (Syria) (Interpretation): Mr. Chairman,
at a previous sitting I asked for a precise definition of the
frontier regime. I wanted an exact indication of the scope of
this term, and if it really means a "frontier regime", it should
be indicated as "a regime to facilitate, both from the point of
view of customs tariff and all formalities, the movement of
products belonging to people living along the border and who
have interests in both countries". Such a zone would naturally
be limited to a few kilometres. This point of view was adopted
generally, but now we seem to be confronted with another regime. 21
V E/PC/T/A/PV/42
I am not against the suggestion which is made, but I would
insist again that the term "frontier regime" should be exactly
defined. We should know if here it is a matter of the interests
of the inhabitants of the frontiers, or if it is another
preferential agreement.
CHAIRMAN: Any further remarks? You have heard the
explanation given by the Delegate of France, and unless any
Delegate feels doubtful with regard to the facts as explained by
the Delegate of France, I take it that we should simply note in
our records his statement, and consider a new annex to be
superfluous; but it is for the Commission to choose.
Does any Delegate wish to oppose this solution?
That not being the case, it is decided that we note the
French declaration and consider a new annex superfluous.
We now pass on to the question raised by the Delegate of
Syria. Does any Delegate wish to speak on that?
Mr. R.J. SHACKLE (United Kingdom): Is it in order to
discuss it now, because surely it arose under Article 38?
Mr. Hassan JABBARA (Syria) (Interpretation): Mr.Chairman ,
I believe that the question raised by the representative of
France really duplicates Article 38. That is why I had asked
for a definition of the meaning of the term. I said that I
was not against the interpretation that had been given, but I
wanted to know if such a procedure could be used by other
countries in the future, or if it is only intended here to
maintain an existing situation. I believe that such a definition
should be given here and that it would be useful for future
action. 22
V E/PC/T/A/PV/42
CHAIRMAN: It is difficult for me now to re-open the
question of Article 38. I have not participated in the
discussion on that Article, and I do not know very much about
it.
As to the question of the general application of a scheme
like the one explained by the French Delegate, I can say that,
for instance, we have a frontier traffic between Norway and
Sweden which falls entirely outside all kinds of customs
regulations, for the benefit of the population on the frontier.
It is entirely the same as the case of the frontier between
France and Luxembourg, as explained by the French Delegate; and
I think that most neighbouring countries have such exceptional
situations. But, of course, it is only for the benefit of
the population on the frontier, and for a very, very limited
amount of goods. G 23 E/PC/T/A/PV/42
CHAIRMAN: The Delegate of the Lebanon.
Mr. MOBARAK (Lebanon) (Interpretation): As you said
yourself, Mr. Chairman, such a frontier regime exists practically
everywhere for the interests of the populations of these border
regions; but these regimes only cover agricultural products, and
as far as we know they never cover industrial products.
Now in the French note it is indicated that cement is one
at the products that benefit from this frontier regime. I do not
understand how an industrial product like cement can be involved
in such a regime, and in this case I would rather see an Annexe G
introduced here to cover this point than leave the situation vague,
and to permit eventually some abuse due to this vagueness.
CHAIRMAN : The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom): Mr. Chairman, I do not know
whether one is in order in discussing Article 38 2 (a) here, but
apparently discussion on it is proceeding, and I can therefore
say this, that it seems to me we are very wise to leave the
term "frontier traffic" indefinite. It is obvious, I think, that
conditions vary enormously from one part of the world to
another. In countries where the population is seattered,
negotiations are difficult. Therefore I think it is very wise
not to be too specific; and that goes also for the types of
goods entering the frontier traffic. It would be better not to
specify whether they are industrial agricultural or what they
are. It would be for the Organization, when set up, to consider
any complaint that may arise; but some regine may go
beyond frontier traffic, It should be left to the Organization,
and that is how we should leave the matter now. 24
G E/PC/T/A/PV/42
CHAIRMAN: The Delegate of Belgium.
Mr. FORTHOMME (Interpretation): (Belgium): I wish to
give every assurance to the Lebanese Delegation regarding the
possibilities of abuse in connection with lime and cement,
and in this connection I shall read Article 10 of the
Commercial Agreement between the economic Union of Belgium,
Luxemburg and France.
"As a temporary concession, having regard to the needs of
the French devastated regions and the special trade conditions
formerly existing between Luxemburg and the adjacent French
departments, the following commodities originating in and coming
from Luxemburg shall benefit on entry into France by the
following duties, applicable to quarterly quotas fixed at an
average of 1,500 tens per quarter for hydraulic lime and 5,000
tons per quarter for cement:
(1) Lime: 26 centimes per quintal
(2) Cemont: 78 centimes per quintal
The lime and cement mentioned in the present Article shall
only benefit by the exceptional regime accorded to them provided
they are imp rted into France via the Customs Offices.." - and
then follows a limited list of Customs Offices through which
these articles can be imported. If it is required I can give
that list. 25
S . E/PC/T/A/PV/42
May I point out that the requirements for reconstruction
after World War I lasted in France almost to the time when the
Germans recreated new requirements for reconstruction.
CHAIRMAN: I think the statement we have heard by the
Delegate of the United Kingdom is very much to the point and,
in the light of considerations out forward by him, we should
abide by the decision which I understand we have taken on the
French proposal, not to insert the special provisions", and leave
the question of the exact definition of frontier traffic open
to be decided, in each case, by the Organization.
Are there any other remarks on Paragraph 2 of Article 14?
This not being.the base, Paragraph 2 is approved.
Paragraph 3: are there any observations?
The Delegate of Australiaa
Dr. COOMBS (Australia): Mr. Chairman, before you leave
Article 14, there are two points I would like to make - one as
Chairman of the Sub-committee which dealt with this matter, and
the other as representing the Australian Delegation.
Dealing with the first point: the position of the Sub-
committee was that there were a number of quite difficult issues
involved in these Articles and it was found necessary to refer
to a number of specific questions in the Report in such a way
as to clarify certain issues .hich Delegations had found obscure,
and the inclusion of those comments in the Report was. regarded
as essential, by the various Delegations concerned, for their
acceptance of the text.
I think it is therefore important, notwithstanding the
difficulty of time, that the Report of the Sub-committee in
respect of those items should be accepted by the Commission,
otherwise I feel a number of Delegations will regard themselves
as inadequately covered in their acceptance of the text as it stands S E/PC/T/A/PV/42
For the Australian Delegation, I do not went to make any
reservation on Article 14, but I would like to remind the
Commission that, when this matter was raised in full Commission
before, we emphasized that acceptance of Article 14 does
represent a fundamental change in the commercial policy of my
country and that, whilst we do not wish to amend it in any way,
we want it to be quite clear that the acceptance of this
principle of Most-Favoured-Nation treatment as replacing the
Imperial Preference principle which has governed so much of
our commercial policy in the past is dependent upon a satisfactory
outcome of the Charter as a whole and also of the tariff
negotiations themselves.
Therefore, the fact that we have not entered a specific
reservation on this Article must not be taken as an indication
that we are, at this stage, prepared to accept the principle
embodied in this Article.
Dr. HOLLOWAY (South Africa): Mr. Chairman, I would like
to associate the South African Delegation with the statement
Dr. Coombs has just made in his capacity as the representative
of the Australian Delegation.
CHAIRMAN : With regard to the statement of the Chairman
of the Sub-committee, I would like to say it was my intention,
after having dealt with each Article, to consider the comments
on the Article in the Report of the Sub-committee, to see whether
any of these comments ought to be retained as Explanatory Notes
or not.
S ER
Any further remarks on paragraph 3 of Article 14. Adopted.
We pass on to the Annexes. The first one is on page 5 of
Document 178: List of Territories referred to in Sub-paragraph 2(a)
of Article 14. United Kingdom of Great Britain and Northern
Ireland and all the Dependent Territories and Dominions. You have
the text on pages 5, 6 and 7. I would like to know whether there
is any delegate who has any observations to make on any of these
Annexes.
Mr. R.J. SHACKLE (United Kingdom): I have two points on these
Annexes. One is a very small point: the other one, I am afraid, is
a somewhat larger one.
The first small point is that where it says: "India" I move
we insert "as 10th April 1947". That, of course, is the opening
date of this Conference. The reason for inserting those words is,
of course, that since then the new division betweenn India and
Pakistan has come into being and if we did not insert the words the
question would arise as to whether Pakistan should be inserted or
not. Perhaps I had betwer make that point first and then go on to
the second point.
M. PIERRE FORTHOMME (Belgium) (Interpretation): I wonder if
there would be any objection on the part of the Commission to the
much simpler solution of introducing the word "Pakistan".
Mr. R.J. SHACKLE (United Kingdom): Well, Mr. Chairman, I am
no sure about what because actually Pakistan is a Customs Union with
India, and it would not be appropriate therefore to insert this word.
This is a solution which in our consideration would be the appropriate
one. I should simply say that we should insert the words: "as from
10th April 1947."
27 ER 26 E/PC/T/A/PV/42
CHAIRMAN: May I ask the delegate of India if he is in
agreement with the suggestion of the United Kingdom?
Mr. S. RANGANATHAN (India): Yes, I am in full agreement with
Mr. Shackle's suggestion.
CHAIRMAN: Well, then, we take it that the Commission agrees
to this amendment.
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman I would
like to proceed now to my second point. The second point arises
on the Report of the Tariff Negotiations Working Party which is
Document E/PC/T/158. It is the Report on Preferential Arrangements
not Effected by the Method of a Difference in Rates of Duty.
Well, now, that paper explains what the point is. The point is
that there are, we think, in the Commonwealth, a certain limited
number of places where preference is given on certain things,
bacon and meat, not by the method of tariffs but by quotas. The
point is that those arrangements shall be provisionally maintained
pending negotiation with the principal supplier of the product con-
cerned which would result in new agreements to take their place.
iin paragraph 1(b)of Art.28
"The preferential arrangements referred to/are those existing
in the United Kingdom on 10th April 1947, under contractual
agreements with the Governments of Canada, Australia and New
Zealand, in respect of chilled and frozen beef and veal, frozen
mutton and lamb,
chilled and frozen pork and bacon (and hams). It is the
intention, without prejudice to any action taken under sub-paragraph
(h) of Part I of Article 37, that these arrangements shall be
eliminated or replaced by tariff preferences, and that negotiations
to this end shall take place as soon as practicable among the
countries substantially concerned or involved." 29
ER E/PC/T/A/PV/42
The Tariff Working Party therefore made two proposals. The
first one was that paragraph 1 (b) should be inserted to Article
28 restrictions under the preferential arrangements provided for
in Annex A of this Charter, subject to the conditions set forth
therein." That was their first suggestion.
Their second suggestion was to include in this Annex -
a passage which I have just read to you which will explain what
those particular preferences are, and what it is proposed to do
about them. Well, now, the first of those changes is the addition
to Article 28 of paragraph 1(b). You will find that in the paper
E/PC/T/163 on page 14 and there appears as paragraph 5(b). The
exact words have been incorporated, as has been suggested by the
Working Party. They read: "restrictions under the preferential
arrangements provided for in Annex A of the Charter, subject to
the conditions set forth therein." This paragraph has been passed
by Commission A last week. We are now left with the remaining
part of the Tariff Working Party proposal which is to include this
in the annex here. The exact wording which is suggested for this
add it ion to the Annex you will find on page 2 of the Tariff working
Party Report. My proposal is to insert here in Annex A, that is
to say, on page 6, the passage suggested by the Tariff Working Party.
It actually would come in as an addition to the amendment of the
second paragraph on page 6 of paper 178. 30
E/PC/T/A/PV/42
DHAIRMAN: The Delegate of the United States.
MR. J.M.LEDDY (United States): The substance of this
proposal, Mr. Chairman, I think was fairly well agreed at the
London meeting. The only thing that was left open was the
question of what precisely were the products concerned. That
having been established at this meeting, I believe that we are
prepared to accept this proposal.
I should like to call attention, however, to the brackets
which appear round the words "and hams" in the list of products.
It is my understanding that those brackets are there simply to
indicate that it may be necessary to establish in tariff preference
on hams, depending upon the outcome of present negotiations.
CHAIRMAN: The Delegate for the Netherlands.
DR. A.B. SPEEKENBRINK (Netherlands): Mr. Chairman, on a
point of order, I may be mistaken, but I do not recollect that the
addition on Article 28 was formally approved by the Commission.
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, this is part
of paragraph 5 on page 14 of document E/PC/T/163; which is the
Report on Articles 26, 28,and. 29. The whole of that was passed
and the object of paragraph 5 was passed without discussion.
CHAIRMAN: The Delegate of Canada.
MR. J.J. DEUTSCH (Canada): Mr. Chairman, that part of the
Report on Article 28 was adopted by Commission A, and I remember
there was a reservation specifically moved on that Article at that
discussion by the Delegate of Brazil. 31
E/PC/T/A/PV/2 ~~~~~~~~~~~~~/ -'-U/ xI /I '2!Co
OEAIRMAi: That is correo.
Weohaveea Report by the sub-ounmittoo f.r tha insertion in the
second ,aragraph or, page 6 of our text of the text we find in
.age 2 of document 73/?2C/158. It has been agreed to by the
sub-oommittee, weth three remervations of the Delegatus of Belgiur,
erazil and Noseaye g weuld ask vhathar any of thee3 Doleoatts
wishes to withdraw his reservation?
's for as I understa-r it, at any rate, spme of them have
already made reservati.ns on .rtiolo 28. The question is whether
it is necessary to repeat the reservations hera. I leave it
.ntirely t. these Dele,ates tJ _ecae.
If no wants to sey asything about it, I take it that theae
taree Delaoaoos maintain thel: reaervEtion alsc -n this point.
The Delegate of Bel,iur.
at o. FORTIOXM2 (Bemaium) (Interpreataiun): Mr. Chairizn, the
Belgian Delegaton A hac made & General reservation x brtiole 28,
which we cunsider aspobeing sufficiont. his specific Zint here
has no partioular interest for us.
CH&IRM I: The Deleea e of Brazil.
lR. J.G. TORRES (Brazil): Mr, Chairman, this matter came to
the attention ofgehe Conference at a rather late stacs. our
ooconsidet has pot had enouWh time tj onsi>.er the -roblem. Ve
have objected to It in the Workln- arty meetings, we have Objected
to Itin .lticle 28 ond wish to repeat our objection nuw.
CEaIRMN: The Delegate for Norway.
MR. J. IELINDUR gNorway): Mr. Chairman, the Norwe-ian
DelegatiAn made a zeneral reservation on .rticle 28, and or, this
particulemapoint heee weealso prefer to rmuiin in abcyanc., so
that we maintain our reservation.
- _. Cr/,o 32
V E/PC/T/A/PV/42
Dr. H.C. COOMBS (Australia): Mr. Chairman, I do not want
to prolong the discussion; but I would just like to remind the
Delegate of Brazil that this matter was raised very early in
the discussions in London and was the subject of a very great
deal of discussion. The Report of the London Conference (page 22)
records the fact that the Committee agreed to the principle of
this, and, so far as I am aware, it was the subject of no
reservation.
CHAIRMAN: May I take it that we are all in agreement with
the text of this annex, amended in accordance with the proposal
contained in Document T/158, with the reservations of the
Delegates of Brazil and Norway?
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, before
we depart from this matter, I feel that I should give a certain
further explanation, because I want the Commission to be very
clear as to what this is really about .
The position is this, that for most of the products here
concerned, the principal supplier is not here present. It is,
therefore, not possible at this stage to negotiate the new
arrangements. That is the only r-ason why the matter is at
present in suspense in this way. We hope that before long,
though, of course, we cannot give an exact date, we shall have
an Opportunity of negotiating with the principal suppliers and
then dealing with these questions. We cannot, as I say, fix a
date for that, but we shall lock to do it as quickIy as possible,
and when we do it, we shall not forget that there are other
people interested besides the principal suppliers.
The last words Of the added paragraph in the Report read:
"and that negotiations to this and shall take place as soon as
practicable among the countries substantially concerned or 33
V E/PC/T/A /PV/42
involved". The words "or involved" are meant to look to the
case of the people who, though they have a definite interest,
have not got the principal suppliers interested in this matter.
I want to assure them that when the time comes we shall not
forget them. Taat is the general explanation that I with to
give.
Then there is one detailed point on the text: the Tariff
Working Party by accident left out a few words in the third line
of the paragraph which they suggest on page 2 of their Report.
These words are in our present text on page 6 of document T/178:
"exclusively between two or more of the territories listed in
this Annex". These words should be replaced, so that the
paragraph will road:
"The imposition of a margin of tariff preference to
replace a margin of preference in an internal tax existing, on
10th April 1947 exclusively between two or more of the
territories listed in this Annex, or to replace the preferential
quantitative arrangements... ."etc.
CHAIRMAN: The Delegate of Chile.
M. Angel FaIVOVICH (Chile) (Interpretation): Mr. Chairman,
our reservation on Articles 28 and 14 also cover the question
raised by the Delegate of the United Kingdom, and the note.
CHAIRMAN: The Delegato of Brazil.
Mr. J.G. TORRES (Brazil): I would, just like to say,
referring to Dr. Coombs' remarks. that there are two questions
here: a question of principle, and the actual problem involved.
It may be true that in London there was no reservation; but
the fact remains that it was only late at this Session that we 34
V
were really confronted with the practical problem, and I would
like to say also that in the tariff negotiations going on here
we have not always necessarily adhered to the principle of the
principal supplier.
CHAIRMAN: The remarks of the last speakers do not alter the
decision which I understood we have already taken, namely, to
approve this annex with the amendments contained in document T/158.
I take it that the decision stands; but there is a note on page 7
of document T/178: "The Delegate for Cuba reserved his position
in relation to the imposition of a margin of tariff preference to
replace a margin of preference in internal taxes". Does the
Cuban Delegate maintain that reservation?
Dr. Gustavo GUTIERREZ (Cuba): We are so rry to have to
maintain it, It has nothing to do with the system of the
British Empire;-but it is a consequential note and we have to
sustain it. 35
G E/PC/T/A/PV/42
Mr. LEDDY (United States): I think that the reservation
by the Delegation of Cuba is already covered by paragraph 2 of
Article 14, and I was wondering whether we could keep/in that
one place rather than in three places, as it is now; but I
really think that the reservation relates to possible
preferential and internal taxes that Cuba may have, and therefore
it should appear appropriately in paragraph 2 of Article 14.
CHAIRMAN: The Delegate of Cuba.
Mr. GUTIERREZ (Cuba): Mr. Chairman, I would very much
like to suppress those consequential reservations, and if I
am allowed to reconsider the matter with the Delegation, we will
try to find a way to have the text of paragraph 2 covered without a
reservation.
CHAIRMAN: Thank you. The Delegate of the Netherlands.
Mr. SPEEKENBRIK (Netherlands): Before you finally approve
this Annexe A, I would only like to say that it was with very
great hesitation that I in the Working Party agreed to the new
addition with regard. to these preferences. We did that for
practical reasons, understanding the difficulties concerning the
United Kingdom; but I did it with great hesitation. At this
moment we might speak of a rather unsatisfactory state of affairs
with regard to the whole negotiations about tariff preferences,
and the addition is a departure from this principle that we should
not continue quantitative restrictions.
CHAIRMAN: Well, we have approved Annexe A, and. we pass on
at 2.30 p.m. to the examination of the other Annexe.
The Meeting is adjourned.
The Meeting adjourned at 1.7 p.m. |
GATT Library | kn077xp9179 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Forty-third Meeting of Commission "A" held on Monday, 18 August 1947 at j'. 30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, August 18, 1947 | United Nations. Economic and Social Council | 18/08/1947 | official documents | E/PC/T/A/PV/43 and E/PC/T/A/PV.41-43 | https://exhibits.stanford.edu/gatt/catalog/kn077xp9179 | kn077xp9179_90240212.xml | GATT_155 | 16,815 | 101,248 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/43
18 August 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
FORTY-THIRD MEETING OF COMMISSION "A"
HELD ON MONDAY, 18 AUGUST 1947 AT J'. 30 P.M. IN
THE PALAIS DES NATIONS, GENEVA . -- - -
H. E. Mr.ERIK COLBAN (Chairman)
(Norway)
Delegates wishing to make corrections in their speeches should address
their communications to the Documents Clearance Office, Room 220
(Tel. 2247) .
Delegates are reminded that the texts of interpretations, which do
not pretend to be authentic translations, are reproduced for general
guidance only; corrigenda to the texts of interpretations cannot,
therefore, be accepted.
NATIONS UNIES S 2 E/PC/T/A/PV/43
CHAIRMAN: The Meeting is called to order.
We now come to Annex B to Article 14, which you will find
on Page 8 of Document E/PC/T/178 - List of Territories of
the French Union.
Does the French D-legate accept the text?
M. ROYER (France) (Interpretation): Mr. Chairman, we
do accept the text, but I would just like to draw your attention
to a few typographical errors. First, there should be an
asterisk in the French text after "Treaty Basin of the Congo",
as there is in the English text. In line 4 of the French
text we should delete the comma. There should be an asterisk
added after "Cameroons under French Mandate". It does
not exist in the English text, because it is inserted in
regard to imports into Metropolitan France. Also, in both
texts should be added "French Establishments in India."
(CHAIRMAN (Interpretation): Is there any objection to
introducing a date into the title?
M. ROYER (France) (Interpretation): We have no objection
to inserting the date of 10 July 1939, which was the date
adopted.
CHAIRMAN (Interpretation): My only idea was that the
relations between these territories and the French Republic
might be modified some time and therefore I was wondering if it
was necessary to put a date. I only wanted to ask if it
was necessary. If it is not necessary, it seems useless to
put it in.
M. ROYER (France) (Interpretation): Mr. Chairman it was
the suggestion of the Secretariat to put in the dates on which
the negotiations were based. These dates, of course, only-concern S - 3 - E/PC/T/A/PV/ 43
the tariff negotiations, but we have no objection to putting
them in.
CHAIRMAN: As there is no expressed desire on the part
of the French Delegation to put a date in, and no other
Delegation has suggested the insertion of a date, I think we
can accept the Annex without a date.
Are there any further remarks?
Annex B is approved, with the slight drafting corrections
suggested by the Delegate of France.
Asner C - is a corresponding list concerning the
Customs Union of Belgium, Luxembourg and the Netherlands.
Mr. J. M. LEDDY (United States): I note that the Delegate
of the United Kingdom has a reservation on this. Our own
position is not concerned with the Annex as it stands, but the
relation between the Annex and the statement circulated by the
Bonelux Delegation some time ago as to the new preferences
extended to overseas territories arising out of the Customs
Union between the Belgo-Luxembourg Union on the one hand and
the Netherlands on the other. On the other hand, I do not
think there is any real difference of substance; it as just
a question of establishing, to our mutual satisfaction, the
products concerned.
I think it has been discussed between us what were those
products and I believe they can go forward in connection with
the Trade Agreement. I think the wise thing would be to
approve the Annex as it is, subject to the working out of a
mutually satisfactory agreement as to the products concerned
in connection with the overseas territories.
Mr. R. J. SHACKLE (United Kingdom):
I should say that the E/PC/T/A/PV/43
object of our reservation is just the point to which Mr. Leddy
has referred. Our position, I am afraid, is that we do not
quite know what products are likely to be affected and, until
we do know, we felt we had to maintain our reservation. I
think we would be agreeable to come to an understanding such
as Mr. Leddy has suggested. If and when we are satisfied as
to the products concerned, we may be in a position to withdraw
our reservation.
CHAIRMAN: The Delegate of Belgium.
M. FORTHOMME (Belgium): Mr. Chairman, I would like to
point out that the idea of basing the acceptance of this list
on such-and-such products being included or not included seems
to introduce a form of jjuggment which has not been used in
the matter of approving various things that have been brought
up.before this Commission, such as tariff changes and other
preferential lists.
I would point out that we do not think the preferential
system which was outlined in different documents the Belgian
Delegation has circulated to this Commission is in any way
at variance with the terms of Article 14.
I would like to make a preliminary remark. The preference
only operates in the metropolitan territories in favour of
overseas territories. It is a preference which is operated
in order to give under-developed regions positive aid in their
programmes. It is not a preference aimed at giving highly
developed countries a reserved or special position in certain
export markets.
S
4 ER E/PC/T/A/PV/43
Now as to the basis of this preference. The agreement on the
Customs Union dates back to 1944. At the time it was signed in
and
1944 it was expected that it would be completely in force,/all
would be
practical details/worked out before the end of the year. It was
at. the time when the Allied Armies were surging to the liberation of
Belgium and it was expected that in a very short time the Netherlands
territory would also be liberated. Instead of that the war took a
very unexpected turn and the liberation of the Netherlands was de-
layed for several months; several months which caused the greatest
havoo in the Netherlands, destroyed much of the face of its economy,
and the result was that it has taken us three years to work out the
practical application of the agreement signed in 1944.
The contents of this Agreement U -, found among other things in
the document which we have prepared and which we have given to
certain delegations in the ocures of the Tariff negotiations, and-
I think if I read is rapidly it would explain what we mean by progress:
"The legislation -e in Belgium since 19L4 gave an all-over com-
plete exemption for all products from its overseas territories. The
customs Union concluded in 1944 between Belgium-Luxemburg and the
Netherlands implies the maintenance of free entry for all these pro-
ducts originating from all the overseas territories of the parties to
the Union.
"This is, however, qualified as follows;
(a) a great number of products, which are produced in the over-
seas territories enter the Union free of duty whatever
their origin. There is in consequence no effective pre-
ference for such products.
The interpretatio n BENELUX puts on paragraph 3 of Art.1
precludes a preference resulting in the future from the
imposition of a duty on any such products. In spite of the
legislation providing for free entry of the products of over-
seas territories, duty would be applied to them in order not
to create what, in practice if not technically, would be new
preferences. 6
(b) as a contribution towards the general elimination or re-
duction of preference margins BENELUX is prepared to
negotiate or effective margins existing for a number of
products, with a view to their reduction or even elimina-
tion."
I would add that at the very beginning of the session, at the
time the new Customs Tariffs of the Benelux Union was explained, we
indicated this question cf preferences. Tt may be that we had
a certain diffidence at the time about the extent of those prefer-
ences. We explained the principles but we remained in fairly
general terms. The reason for that is that we were at the outset
of a negotiation which was designed, in the terms of the London re-
port,towards a substantial elemination and reduction of preferences.
hest
It appeared/to us at that time to assert bluntly that we intended
to maintain the full extent of the preferences set out in the law
in 1924. It might have sounded uncompromising and it might have
given the negotiations a very inauspicious turn, In fact the minds
of our governments were open. We knew what our rights were, and
we were willing to sacrifice a good deal of them; the common
objective of freer trade and general prosperity, However, the
course of negotiations in the Charter discussions have shown that
there is a tendency here in Geneva to take a narrower view of
the undertakings to eliminate preferences. We see that as far as
practical purposes go no values seem to be attached as a concession
to the fact that most nations accepting the Charter give up the
right to create new preference except under very strict limitations.
Yet it should be borne in mind that in giving up this right we gave
up the possibility to enter into preferential arrangements which 7
ER E/PC/T/A/PV/43
would offer a wide scope for action for countries which are not
yet bound by existing preferential arrangements.
Moreover, we have found that in the tariff negotiations it
was asserted that preferences would be given a very high price.
We have also seen here persistent and very successful endeavours
to write into the Charter provisions and notes cov ering and
sanctioning every aspect of existing preferential systems. We
have even witnessed the latest of these endeavours this morning.
In these conditions it has become quite impossible for the
Benelux delegations to contemplate relinquishing any part of their
preferential system without some form of compensation. However,
under instructions from our Governments we were prepared to receive
any requestsfor the reduction or elimination of any particular
products and to negotiate them in the most generous spirit. 8 E/PC/T/A/PV/43
CHAIRMAN: I understand that the List contained under C is
approved by the Governments directly interested, and in the
circumstances I do not see that we can do anything but approve it.
MR. J.M. LEDDY (United States): With regard to the
statement by the Belgian Delegate, I do not think we would agree
that the progress of negotiations this far can be a final judgement
of what may be an ultimate result. As I said, we would not wish
--to make a formal reservation at all. The question is that it
probably relates. to certain new preferences as compared with the
preferences existing before the formation of the Customs Union, and
we understand that those preferences will relate to certain products,
and all we wish to know is what those products are, and we wish to
say that we would like to discuss that in connection with the
Trade Agreement. We enter no formal reservation on Annex C.
M. ROYER (France) (Interpretation): Mr. Chairman, we have
no reservations whatever to the List, and we have full confidence in
the Delegations which have composed this List.
We would just ask if these Delegations would agree to add in
the List concerning the Belgian Congo an asterisk and a little
Note similar to the one which exists in annex B saying "For imports
into Metropolitan countries only". E/PC/ T/A /PV/43
M. Pierre FORTHOMME ( Belgium) (Interpretation): I would
like, Mr. Chairman, to reply here to the Delegates of the United
States and France - first, concerning the list of products.
All those products are from the Belgian Congo. Of course, to
know all these products one should go very carefully through
certain scientific steps.
Concerning negotiations, I would like to say once more what
I have said already several times, that we are prepared to
receive requests on all products, and to negotiate in the most
general spirit possible; and to reduce preferences as far as
is compatible. with the mutual interests of parties and, of
course, with concessions.
At the beginning we were ready to abandon preferences
without asking for any compensation, but as we have seen,
during the negotiations, that the negotiations were product
by product, concession by concession, request by request, I
am sorry to say that we cannot act in another way. Therefore,
I would like to repeat that we would like to negotiate and are
prepared to do so, without wanting in any sense to erect any
barriers which would not allow the Charter to realize its
real aim, which is to liberate trade.
May I add a word in respect of the specific request by
the Delegate of France? We completely agree to his proposal
to add an asterisk and a note to the effect that this applies
only to the products coming from the overseas territory.
CHAIRMAN: May I take it that we agree to the adoption
of Annex C, with a note on the lines just indicated by the
Delegate of Belgium?
Dr. A.B. SPEEKENBRINK: (Netherlands): Mr. Chairman, I
9
V V 10 E/PO/T/A/PV/43
fully support what Mr. Forthomme has said. As we are faced
now with a formal reservation on one of the Annexes of
Article 14(2), I am sorry that I myself must now enter a formal
reservation on behalf of my Government with regard to Article
14(2) Annex.
Mr. R.J. SHACKLE (United Kingdom): The position is, as I
understand it, that certain preferences permit free entry, which
has been given for a long time in Belgium, and the preference
is now extended so as to apply to the Colonies, the Netherlands,
and to all the territories of the Benelux Union. That clearly
is an extension of preferences.
If we are asked to agree to that - which is the effect if
we agree to this Annex - we want to know what the products are,
and at present we do not know. That is the position which gives
rise to my reservation. I do not know what the products are,
and I do not see how I can withdraw my reservation. I am
perfectly prepared to report to my Delegation what has been said
here; what Mr. Forthomme has said and has offered to negotiate;
but I am afraid that for the moment I must maintain my
reservation. I am sorry but I do not see any other way out.
Mr. J.M. LEDDY (United States): Mr. Chairman, I think
that is really the difficulty. We just do not know what it
is we are negotiating about the preferences newly extended by
Belgium to the Netherlands overseas territories, and newly
extended by Netherlands to its own overseas territories and the
overseas territories of Belgium.
We are not questioning the need for this sort of arrangement
because of the Customs Union, because it is a complicated
situation, and it is probably necessary to carry out these V 11 E/PC/T/A /PV/43
arrangements, because of political as well as economic
difficulties. All we want to know is what the products are
that we are negotiating on, and I think it is only reasonable
to ask what they are. We did not want to make a formal
reservation on this Annex, because we do not quarrel with the
principle; but we just would like to have agreement that the
products concerned would be established in connection with
tariff negotiations. 12
CHAIRMAN: I repeat my question, is the Committee in
agreement with the text of Annexe C with the additional note
accepted. by the Delegations of Belgium and the Netherlands.
Mr. LEDDY (United States): I think, Mr. Chairman, we
would like to add our reservation on this matter provisionally.
Mr. SHACKLE (United Kingdom): That is our point of view, too,
Mr. Chairman.
Mr. FORTHOMME (Belgium): Mr. Chairman, I would like to
point out three things. The first thing is that we do not
estimate that there is an extension of preference at the base
date. The agreement dates from 1944, but a series of fortuitous
circumstances has made this agreement difficult to put into
practice until now. That is, if we considered extending
preferences at this present base date because of these
fortuitous circumstances, again a case of what I have already
protested against several times in this Conference - that what
exists is unconditionally approved, and what happens not to
exist but only to exist virtually is immediately scrutinised.
The second thing I have to say is that as to the products
which are liable to negotiation, we cannot give a list, because
as I say they are all the products of the Belgian Congo;
and thirdly, we do not see the interest of that, as we say
that we are bound to negotiate any product that any Delegation
at any time wishes to nominate as a product it wants to
negotiate on. I do not think it is possible to define more
widely the scope of a negotiation.
The other point I want to make is that it is very
difficult and I think impossible to negotiate on preferences
while there is a reservation on the list of territories to which
this preference applies. 13
CHAIRMAN: The Delegate of the United States has made a
provisional reservation and the United Kingdom modified his
reservation in the same sense. With these two provisional
reservations, is Annex C agreed?
Mr. SPEEKENBRINK (Netherlands): I will make mine
provisional too.
CHAIRMAN: The Netherlands reserve applies to the whole of
Article 14 rolled into paragraph 2.
Mr. SPEEKENBRINK (Netherlands): It admits an Annex
CHAIRMAN: We pass on to annex D, page 10, List of
Territories of the United States of America.
The Delegate of Cuba.
Mr. GUTIERREZ (Cuba): Mr. Chairman, the Cuban Delegation
withdraws the reservation at the end of Annex D as well as
Annex A on the understanding that it is covered by the
reservation we have made on -rticle 14, paragraph 2.
Just to correct the translation, not only here but in
Annex. 4 also.
CHAIRMAN: Well then, only the reserve on page 2 of Doc.
T/178 remains.
Mr. GUTIERREZ (Cuba) : UI to now.
CHAIRMAN: May I then take it that Annex D is unanimously
approved?
On page 11 there is Annex E: List of Territories covered
by preferential arrangements between Chile and Neighbouring
Countries. The Delegate of Chile. 14
G E/PC/T/A/PV/43
Mr. FAIVOVICH (Chile) (Interpretation): Mr. Chairman,
I would like to complete the text. There has been an omission
and Argentine and Bolivia should be added.
CHAIRMAN: You have heard the statement of the Chilean
Delegation. Is there any objection? Annex E will contain then
Chile, Argentine and Bolivia. The Delegate of the United States.
Mr. LEDDY (United States): I think this applies to the
arguments already heard in respect of Articles 13B and 38, para.4.
It was argued that the arrangements should be subject to the
procedures set from in 13 B or 66, paragraph 3.
And may I point out that the Delegate of Chile has already
reserved his position on Article 14, which covers the Annexes.
CHAIRMAN: Is there any other Delegate who is in favour of
the addition of Argentine and Bolivia in the list of Annexe E.
Mr. TORRES (Brazil): Mr. Chairman, I would like to ask the
Delegate of Chile whether the preferential arrangements between
Chile and Argentine are already in effect. 15
S E/PC/T/A/PV/43
M. Angel FAIVOVICH (Chile) (Interpretation): I am
rather surprised at the observations made by the representatives
of the United States of America and Brazil. What we are
dealing with here are preferential exceptions already in
affect and we do not touch on the these which we have
defended somewhere else on the future situation. Here we
are covering only agreements in force at the date of April
10, 1947 between these three countries.
Mr. J.G.TORRES (Brazil): Am I to understand, Mr.
Chairman, that the reply of the Chilean Delegate means that
the preferential arrangements between his country and
Argentina and Belivia are in force at this time?
M. VAIVOVICH (Chile) (Interpretation): That is exactly
what I indicated.
CHAIRMAN: The Delegate of the United States.
Mr. LEDDY (United States): Does this mean that the
arrangements were in force at April 10, 1947, or at the date
established for the negotiations? If they were in force on
April 10, 1947, we cannot accept them as a basis for
negotiations with Chile.
CHAIRMAN: I am afraid I do not know anything about
the existence or non-existence of these preferential arrange-
ments, so I must ask Members of the Commission whether, in
the light of the declaration made by the Delegate of Chile,
they agree to the insertion if the words "Argentina and
Bolivia" in Annex E.
I would remind you that the United States Delegate has
already referred to the fact that the Chilean Delegate has made
a general reservation on this Article, which will, of course,
. , _ , _ 16
S E/PC/T/A/PV/43
enable his Delegation to bring the question up at a later date,
with full particulars as to the arrangements between Chile
and Argentina and Bolivia.
It is only a tentative suggestion on my part, but
perhaps the Chilean Delegate would, on the basis of his
general reservation, be content to take the list as it stands
in the Legal Drafting Committee's Report and include Argentina
and Bolivia in his general reservation, so as to bring it up
later on with the necessary particulars - I repeat this -
concerning the agreements entered into between his country and
Argentina and Bolivia, which would enable the Members of the
Commission to see clearly how the matter stands.
CHAIRMAN (Interpretation): This would be especially in
order to permit the Chilean Delegation to submit at Havana more
precise information on the arrangements concluded by Chile
with Argentina and Bolivia.
Are we agreed on Annex E in its present form?
Mr. TORRES (Brazil): Mr. Chairman, are your suggesting
that with the reservation of Chile a Note be inserted in the
Report, stating the reasons for the reservation?
CHAIRMAN: No. I do not want to limit the free action
of the Chilean Delegation. I think the Chilean Delegate must
be entirely free to submit all kinds of considerations on
Article 14 at Havana
Mr. TORRES (Brazil): And Annex E remains as it is?
CHAIRMAN: - and in his considerations explain the
arrangements entered into between his country and Argentina
.and Bolivia, as a basis for discussion at Havana. 17
ER E/PC/T/A/PV/43
CHAIRMAN: I take it that Annex E is agreed.
Annex F. List of Territories covered by Preferential
Arrangements between the Oyro-Lebanese Customs Union and neigh-
bouring Countries. Are there any observations? It is
agreed.
You will remember that the Chairman of the Sub-Committee
directed our attention to the Report containing considerations
of some importance to certain delegations. We should now briefly
go through the Report with regard to Article 14. As far as I
can see myself we have already adopted in our text everything of
material importance in the Report. There is a point at the bottom
of page 4 and on page 5, the sub-Committee says: "In order to
paragraph 3 was ended
make this perfectly clear / . . and so on. In other words, as
far as I can understand it the doubts that have been- expressed in
the sub-Committee have been cleared away, and I do not think that
anybody would disagree if we do not insert any note on this point.
Dr. H.C. COOMBS (Australia): Mr. Chairman, we agree that it
is not necessary to record this text in full, but we would wish
the Commission to record the interpretation given to this text by
the sub-Committee.
CHAIRMAN: You have this text of the Report in your hands
I, myself, read it very carefully, and I think that the conclusion
to which the sub-Committee arrives is perfectly correct, and unless
any member of the Commission objects we would state in our report
that we have approved of that interpretation. Approved.
May I ask the the Chairman of the Sub-Committee whether there
is any point on Article 14. I do not think myself that there is.
Dr. H.C. COOMBS (Australia): It has been suggested, Mr. Chair-
man, that it might be desirable to add to the text of this Report,
on page 4,the fact that in the second paragraph reference made 18
ER E/PC/T/A/PV/43
to the fact that other annexes may be required to meet the cir-
cumstances of countries who will be present at the World Confer-
ence but are not represented here. apart from that I see nothing
in Article 14 on which any action is required by the Commission.
CHAIRMAN: I think that is a good suggestion. It is
evident that some of the delegates may have come with their lists
already before our meeting. I added that point to my list, but
it seems to me that that point could be understood. Are there
any objections?
Mr. J.M. LEDDY (United states): In the report which came
Legal Drafting
to us from the / -Committee that point was taken care of by a
very small provision in sub-paragraphs (b) and (d) of paragraph 2
of article 14. Sub-paragraph (b) states "preferences ...... which
are listed in Annexes B, C and D. of this Charter." The same
thing was done in sub-paragraph '(d).There is no need for such a
provision with re ard to Annex A or with regard to the preferences
under sub-paragraph(e). I wonder whether we could not just go back
to the report of the Sub-Committee to make it quite clear
CHAIRMAN: I take it that we are all in agreement with this.
We pass on to Article 15. You will see that there is a note
on page 12 by the Legal Drafting Committee: "On the assumption
that the omission of the title of this Article ...... occurred
inadvertently, the Legal Drafting Committee re-inserted the title
contained in the New York Report." Are there any objections to
the maintenance of that title, which is "National Treatment on
Internal Taxation and Regulation." J. 19 E/PC/T/A/PV/43
MR. A.- FAIVOVICH (Chile) (Interpretation): Mr. Chairman,
the Chilean Delegation made a reservation on the text of
paragraph 1 of this Article. We made a reservation waiting for
the text of Article 25 on Quantitative Restrictions. As
Article 25 of Chapter IVwas not satisfactory to us, we have to
maintain this reservation on Article 25, and in order to be
logical we must also make a reservation here on the second part
of paragraph h 1 starting with the word "Moreover" to the end of
this first paragraph.
While we are on this, we would like also to indicate that we
reserve our position on paragraph 3 of this Article.. Later on,
perhaps, when the technical services of Chile have been able to
study the implication of this text, we bright be able to withdraw
the reservation.
CHAIRMAN: There is also a reservation from the Delegate for
China. He reserved his position on paragraph 1 provisionally and
proposed the deletion of the second and third sentences. I
would like to ask the Delegate of China whether he can forego this
reservation?
H.E, DR. WUNSZ KING (China): Mr. Chairman, the Chinese
Delegation maintains this reservation.
CHAIRMAN: We have a third reservation: "The Delegate for
Cuba reserved his position and proposed a new paragraph permitting
the exemption of domestic products from internal taxes for
development purposes". That proposal is contained in document
E/PC/T/W/280, and you will find, it on page 2:- "The Cuban
Delegation considers it necessary to introduce a sub-paragraph to 20 3
J. E/PC/T/A/PV/43
the new paragraph 1 of Article 15 along the following lines,....",
and then you have the proposal.
I would like to know whether there is any support in the
Commission for the inclusion of this, or whether it should remain
as part of the Cuban reservation on paragraph 1. Does any Delegate
wish to support the Cuban proposal?
(Interpretation): In these circumstances, I believe that
the only way to deal with the Cuban suggestion is to consider that
it is covered by the reservation indicated on page 13 of
document E/PC/T/178, Note 3, reading "The Delegate for Cuba
reserved, his position.....", and so on. I hope that this will
satisfy the Delegate of Cuba.
MR. H. DORN (Cuba): Thank you, Mr. Chairman.
CHAIRMAN: We now have three reservations. May I take it
from
that a part/that we are in agreement with regard to the text of
paragraph 1 of Article 15?
The Delegate for Norway.
MR. J. MELANDER (Norway): Mr. Chairman, the Norwegian
Delegation finds it necessary to make a general reservation on
Article 15. W-e find that not only Article l5, paragraph 1, but
also paragraphs 2, 3, 4 and 5 are not satisfactory. There are :
eeeoaly two aspects of the *prblem which is to be- dalt with
by, Articl15e , which we feel are not solved here at the Geneva
Conference. :
I do not want to hold up the Commission in going into detail.
I would just mention that the first point is the question of price
regulation. We feel that, in order to satisfy the requirements
of the Charter and in order to conduct an economic policy for full J. E/PC/T/A/PV/43
employment and increasing standards of living, it will also be
necessary to take measures to control or stabilize prices on a
reasonably stable level. To meet those objects, it will be
.necessary to have a price control system in many countries, and in
order to be able to conduct that price stabilization policy, we
feel that Article 15, paragraph 1, will have to be altered.
Secondly, we also feel that in many countries - in Norway
especially - it will be necessary to regulate production on lines
which are not quite in conformity with the present draft of
Article 15, paragraphs 2, 3 and 4. Here, also, we do niot want to
make any specific proposals at this stage, because we feel that
the measures we have in mind require some further considerations
In any case, however, the Norwegian Delegation will produce a
document setting out in more detail the objects we have in mind
and the methods which we feel can be applied to solve these
problems, and we hope that at the Havana Conference it will be
possible to reach a more reasonable and practicable solution. CHAIRMAIN: The Dlelegate of Belgium.
M. Pierre FORTHOMME (Belgium) :(Interpretation): I should
like, Mr. Chairman, to point out that our acceptance of.
Article 15, in its present text, is based on the fact that it is
a compromise. Should this Article be discussed again and
re-arranged, we reserve our right to ask that it be studied on
the basis of the amendment submitted by the Benelux Delegations
in Document W/92.
CHAIRMAN: Any further remarks on paragraph 1?
Mr . J.G. TORRES (Brazil): Mr. Chairrman, I would only like
to ask the Commission for its views on the following problem:
There care countries have taxes which they apply on imports
and exports totally on a non-discriminatory basis, and merely
for fiscal purposes. I would like to be enlightened as to
whether these taxes are to be considered under Article 15 as
internal taxes, or whether they fall urer Article 24, subject
to negotiation.
CHAIRMAN: As a general reply, I might perhaps mention
that under article 15 the internal taxes mentioned there are
also subject to negotiations on the same principle as those
applicable to customs tariffs under Article 24, so it is
perhaps not absolutely vital to draw a scientifically correct
line between these internal taxes and customs tariffs.
I ought to add that article 24 does not only talk about
tariffs but about "tariffs and other charges" That was
something to which the Executive Secretary drew my attention
just now.
Mr. J.G. TORRES (Brazil): Mr. Chairman, I am sorry to V E/PC/T/A/PV/43
insist upon this point; but we in Brazil have certain taxes
which we apply on imports for social security purposes, and
they apply to every product of every country. We are, however,
at a loss to interpret Article 15, because we do not know
whether those taxes would be considered as internal taxes, and
if so, could continue subject to negotiation; or whether they
are not a matter to be considered under Article 15, but instead
under Article 24.
If they come under Article 24, they are not considered to
be internal taxes and the position is clear. But if, on the
other hand, they are deemed to be internal taxes, I would like
to have the views of the Commission, because in that connection
we would have to see just what our position would be vis-a-vis
Article 15.
CHAIRMAN: The Delegate of Canada.
Mr. J.J. DEUTSCH (Canada): Mr. Chairman, is not this
the position: that where these internal taxes apply to a
commodity which has been bound during the negotiations under
Article 24, that internal tax would either have to be bound as
part of the tariff rate or, if it is not so bound, it would be
ruled out by Article 15. In cases where the tariff rate is
not bound, then the internal tax in the sense mentioned by
t:he Brazilian Delegate, could be continued. Article 15 would
not affect it.
CHAIRMAN: On the basis of general application?
Mr. J. J. DEUTSCH (Canada): That is right; but where
the tariff rate is bound, then you cannot maintain an internal
tax over and above the bound rate. Article 15 would rule it
Oùt.
? 24
G E/PC/T/A/PV/43
Mr. DORN (Cuba): May _- I ask ona s. question in order to
clear up the legal situation envisaged by this question.
scee this text concern imports levied on domestic
products, or not?
CRLANML;: Yes, thma MFy be products produced in the
country.
Mr. DORN (Cuba): In that oase I think Articie 15 would
apply, because that is a question ^f whether it is possible or
not to have an internal tax on imported products only, exempting
at the same time the corrospsng d;- omestic product.
That wax e:aytll, the satu-tion we hae bcfore, and therefore
m vr very interested in the answer to the question, ifit is
possibloppe maintain these special taxes on imported. products
only.
Mr. LEDDY (United Sss)taWe: ithga drtoer the statemeont f
the Delegate of Canada, I think thAat rticle 15 does not lay down
any rule as to binding on internal taxes, but only requires
that they be no higher on imported, products than domestic
products. I doubt my ability to agree heore n a complete
legal definition of what is an internal tax, buto twcthings are
perfectly clear. One is, ifethc tax is cecleotod after the goods
leave the customs, that is an intaln02 tax, and its influence
must be non-discriain&tory. cSesondly, if the tax is cleared at
customs and has no relation to the tax imposed do onmestio
products, that is an import charge and not an internal tax.
CLMAIIF I hope the Caanpdan Delegate will speak very
briefly.
Mr. DEUTSCH (asnada): It sem-s to me that it all hinges
on whether or not the tariff with the tax has been bound, and
whether or not the binding included. the tax. The point ist)hat E/PC/T/A/PV/43
you cannot nullify a binding by an internal tax. That seems
to me the essence of this article. If the item is not bound,
then an internal tax which operates in the same way as a customs
duty is not bound at all, and it seems to me it just hinges on
whether it is bound, and how it is bound: Whether we are
including or excluding the tax.
Mr. DORN (Cuba): Would it be possible to put as an
interpretive note the explanations given by the Delegates of US
and Canada to the text of the Charter?
CHAIRMAN: I hope the Commission will not try to give any
ruling on this subject. I have my own very definite opinion but
I am not going to tell you, because it is so easy to fix one's
mine, on some aspect of the case, instead of having clearly before
one the purpose of the process in Article 15. As I said at the
beginning, in practice it does not seem to be very important
whether you calliit internal duty or customs duty, as in both
cases you are liable to negotiate for the reduction at the request
of the Organization.
Mr. TORRES (Brazil): Mr. Chairman, in Article 15, in the
last sentence we only speak of negotiation for those taxes
referred to in the preceding sentence. It is my impression
that we are not subject by the internal taxes to this process
of negotiation. The interpretation of the US Representative
as given is perfectly satisfactory to us, because these taxes
I have referred to are collected at the time the product is
received, and that would be perfectly satisfactory to us, because
it would then be understood that they are on an equal footing
with the import duty, and would come under Article 24.
- 25 - E/PC/T/A/PV/43
The reason why I raise this rather difficult question is
we wish this matter to be fully understood and not to be
requested tomorrow that these taxes are to be dropped
automatically under article 15.
CHAIRMAN: After all, Article 15 has as its main purpose
the treating of national goods and imported goods on the same
footing, I think it is practically impossible to come to
any exact legal definition of the difference between all the
cases in which you have before you an internal tax and the
mases in which you have before you a customs charge, and I
hope we may leave this discussion, which has disclosed, at
any rate, en interesting and important point.
The Delegate of France.
M. ROYER (France) (Interpretation): I do not desire
-to prolong the discussion, but I think it would be useful if
the Commission clearly stated that the interpretation given
by Mr. Leddy is not an authoritative one. Mr. Leddy has said
that whatever is collected at the customs can be construed
as being a customs duty, and this would tend to assimilate
all French taxes to customs duties. For instance, in France
we have a tax on turnover and a luxury tax; these are
collected by the customs authorities, but they are, however,
internal taxes. This might lead to some confusion,
As regards Brazil, I do not know what the position is
exactly, but either we have to deal with an internal tax at
the same rate on both nationally-produced. and imported articles,
which I think is not the case with Brazil - unless I am
mistaken, or with some additional charge on the imported
product, and in these cases I think there may be some con-
fusion with customs duties.
..
S -27 - E/PC/T/A/PV/43
CHAIRMAN: I would like to ask the Delegate of Brazil
whether, particularly in view of the very interesting remarks
just made by the Delegate of France, he finds he has go
sufficient clarity on the problem.
Mr. TORRES (Brazil): Mr. Chairman, the debate has
taken a course which shows there is some difficulty with the
interpretation of this Article, and we would be rather worried
if this discussion were to be closed after these conflicting
statements have been made, because, if the opinion of the
Commission is that these taxes to which I have referred - which
are mainly for social security purposes and are revenue taxes
which are collected from every country, and which are not
discriminatory, in the sense that they are collected from every
country - are to be dealt with under Article 24, subject to
negotiation, we are perfectly in agreement.
If, however, there is some question that they may be dis-
criminatory and they have to come under Article 15, we would
be at a loss to see our position very clearly.
In this case, you seem to have indicated in your statement
that these taxes, in any case, were all subject to negotiation.
I do not think Article 15, as it stands now, authorizes that
interpretation, but, if that is also the view of the Commission,
then I think it would be necessary to make a slight drafting
amendment to say that all existing internal taxes are subject
to negotiation, and not refer merely to those taxes relating
to products which do not have a substantial home production.
CHAIRMAN: I take it we all agree that if the tax is
imposed without discrimination upon imported goods only and
not on internal production, it comes under Article 24. That
ought to give satisfaction. There cannot be any doubt about that.
Mr. J.J.DEUTSCH (Canada): I just want to say, Mr. Chairman,
that I agree with your interpretation.
Mr. LEDDY (United States): Adding only thing; that it is
collected at the time of importation and not afterwards. ER 28 E/PC/T/A/PV/43
CHAIRMAN: I do not think that would make any real differ-
ence. It would not perhaps be collected at the time of the
importation, but if, for administrative reasons, it took place at
once I take it that as long as we do not import the national pro-
duct in the same way ,it still como under the clause of Article 24.
1 think we can close the disc ssion now. May I take it that with
the reservations already made we can now approve Article 15, para-
graph 1. Agreed.
Paragraph 2, on page 14 of Document 178: there are no notes
and no reservations. Is it approved? approved.
Paragraph 3: there is a footnote on page 15: "Several
delegates not members of the sub-committee reserved their position
regarding this paragraph, pending settlement of the outstanding
issues on Chapter IV." Now Chapter has been disposed of, and
I would strike out this reservation unless any Member of our Com-
mission wants to make any further reservations. But evidently the
general r' reserves already eod-- cover this as well. The question
is only whether there are any additional reserves on paragraph 3
I hope there are none. Paragraph 3 is approved.
We pass on to page 16, paragraph 4. I have nd te here that
in Document 175, Sage 3, that is tRepoPOPrt of the Sub-Committee
dealing with films, that they suggest that there should bet:. following
amendment to the beginning of parapragh 4 Aof rticle 15: "Any
internal quantitative regulation relating to cinematograph film and
meeting the requiremenoftA article 15-B". You will see that as
it Stands it is approved as ujobJectionable. The question whether
we agree itoit depends on what we think of 15-B. ER
We find at the bottom of page 3 of document 175, 15-B. We
have had this in our hands for several days, and I would like to
know whether any delegate has any remark to make.
Mr. R.J. SHACKLE (United Kingdom): The solution proposed
in this Paper is one which on certain points still requires some
further discussion on our part with some countries, and I am
afraid that it is not possible that the discussion of those details
should be concluded in time for us to have this text ready before
the Charter is to be published. At the same time we are working
very hard on points of detail, and we are hopeful that they will
be settled soon, and that is really all I can say about it.
I should perhaps have made clear that my remarks related to
Article 15-B.
29 . 30 E/PATPL./2V/43
M. P. HJFMOROME (Belgium) (Interpretation): Mr. Chairman,
we have no direct interest in the discuss ion,which still continues,
in connection with Article 15B, but I have one remark to make.
It will be impossible for us to accept this Article, whatever its
final wording,if it contains certain provisions such as this;
"If any Member establishes or maintains interQqQnluantivtatie
regulationsrelatio in n on to cinematograph films. etc.", because this
formula covers,w as ell, non-exposed films, while the Article
is intended,fint, acuc vo ofer exposedmfilis intended for actual
showing in cinema theatres, Therefore, we suggest the following
amendment:- "If any Member establishes or maintains internal
quantitative regulations relating to exposed, positive
cinematograph films".
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, I should
have no difficulty in accepting Mr. Forthomme's suggested amendment
although, in fact, I really think that it is clear that this
applies to exposed, positive films at cinemas, because it is
certain that no screen quota could be imposed on unexposed films,
because nobody would want to see them.
DR. COOMAS (tustralia): Mr. Chairman, the essential word
does seem to me to be "exposed". I am not sufficiently
familiar with the technical part of this to be sure that all films
that are imported would be positive. I suggest that we just
refer, therefore,"to Iexposed cinematograph films".
MR. R.J. SHACKLE (United Kingdom): I think my previous remark
reaapy enplies to the showing of negative cinematograph filws, vhich
I am sure w noldnot be vplpoer .ular E/PC/T/A/PV/43
DR. H.C. COOMBS (Australia): That is not the point,
Mr. Chairman, May I presume that, for some reason, films might
and
be imported under one form/converted to another. I am not qaito
sure how this could be done, but it night be necessary to control
both negative and positive. It may not be, but it may be. I
do not want to leave the Article inadequate, if it is necessary for
the purpose contemplated to have it applicable to both.
CHAIRMAN: I wonder whether we could not agree to insert
Article 15B in the text of the Charter in square brackets with a
commentary saying "subject to revision of the text", or something
like that.
The Delegate for the United States.
MR. J.M. LEDDY (United States): I wonder whether we could
not take up article 153 after we have finished the rest of
Article 15, Mr. Chairman, because these changes in Article 15B
depend upon the decision taken on Article 15.
CHAIRMAN: I think that we should have a short break for tea
until 5.10. E/PC/T/A/PV/43
(The Meeting resumed at 5.40 p.m.)
CHAIRMAN: Will the delegates please take their seats,
We have had a long discussion about Article 15-B. There
was a question that we should postpone further consideration of
it, but unless the delegates feel strongly about it I would
very much prefer to finish the discussion so as not to lose
the benefit of the observations which have already been made.
I think we all agree with the suggestion made by one
delegate and agreed to by several others, to insert in the
second line of the now draft Lrtiole 15-B the word "exposed"
before " cinematograph films".
I would like to know whether there is any observation on
the rest of the text of Article 15-B. I quite agree that it
may be difficult for certain delegates to make up their minds
but, after all, they have had this paper already for three or
four days so I do not see any reason which we should not be
able to deal with it.
Is there any Delegate who disagrees with this text?
Mr. R.J. SHACKLE (United Kingdom): I do not disagree
at all with adopting the text, and I shall not have to put on
a general reservation - I hope it will be strictly temporary -
for the reasons I explained.
CHAIRMAN: It would be a provisional reservation?
Mr. R.J. SHACKLE (United Kingdom): Yes.
Dr. A.B. SPEEKENBRINK (Netherlands): I am in the
position that there are some difficulties at the moment for the
Netherlands with regard to screen quotas, and so on. I
32
V E/PC/T/A/PV/43
understand that there is some discussion going on in diplomatic
channels that might solve this problem, but for the moment I must
reserve my position.
Mr. Z. AUGENTHALER (Cz ..choslovakia): Mr. Chairman, I make
the same reservation as Mr. Shackle and Dr. Speekenbrink.
CHAIRMAN: Any further remarks? May I take it that the
Commission is in agreement with the proposed text, while these
three Delegates provisionally reserve the position of their
Governments? In this case, I do not see any objection to
mentioning the three Delegates.
I consider this new sub-paragraph (a) of paragraph 4 of
Article 15 approved, and also the text of Article 15-B to
which that new sub-paragraph refers.
At the same time, I would draw your attention to another
proposal on page 3 of document T/175, relating to Annex A which
we have already adopted. At the end of the Annex we read:
"The film hire tax in force in New Zealand on 10 April 1947
shall, for the purpose of this Charter, be treated as a customs
duty falling within Articles 14 and 24".
The Sub-Committee on film questions proposed the following
text:
"The renters' film quota in force in New Zealand on
10 April 1947 shall for the purposes of this Charter be treated
as a screen quota falling within Article 15-B."
I take it that we leave it to the Delegate of New Zealand
to decide which wording he prefers.
Mr. J.P.D. JOHNSEN (New Zealand): The text as it already
stands refers to film hire tax. The amendment in Part II refers
to film quota. They should both be in.
33
V V 3
CHAIRMAN: That would be an addition to Annex A.
No objections? It is approved.
After having inserted a new sub-paragraph (a) in paragraph
4, we must slightly alter the old sub-paragraph (a) and call
it (b) and say "Any other measure of internal quantitative
control," etc.
Are there any further remarks on paragraph 4 of Article 15?
I am reserving the various notes - I shall come back to them.
M. F. Garcia OLDINI (Chile)(Interpretation): With reference
to sub-paragraph (b) of paragraph 4, I think that the meaning
ought to be made quite clear. I find the present wording rather
ambiguous. It reads "(b) any internal quantitative regulation
applied by any Member having equivalent effect to any import
restriction permitted to that Member under paragraph 2(c) of
Article 25".
34
E/PC/T/A/PV/43 G 35 E/PC/T/A/PV/43
Now we have interpreted paragraph (b) in two different
ways. Either it refers exclusively to those Members who can
use the provisions of paragraph 2 (c) of Article 25, or the
reference is only made in an illustrative way as an example,
and any Member may apply quantitative internal regulations
equivalent to those of paragraph 2 of Article 25. I should
like to know tho opinion of the Rapporteur on this point.
CHAIRMAN: Well, the Rapporteur is not present.
My own view is that it refers only to such Members as
might have used paragraph 2 (c) of Article 25. That is how I
road the text as it stands.
Mr. G GARCIA OLDINI (Chile) (Interpretation): In that case,
Mr. Chairman, considering that under paragraph (b) the scope
of the provisions of paragraph 2 (c) of Article 25 is wider, and
since we do not accept those provisions, we must make a
reservation.
CHAIRMAN:
The same objection as now made by the Delegate of Chile
was made according to the Footnote on page 17 also by the
Delegates of Canada, Belgium and Brazil, I wonder whether
any one of them is prepared to withdraw that reservation.
Mr. TORRES (Brazil): Mr. Chairman, the brackets were put
into this sub-paragraph pending the drafting of the pertinent
provision of Article 25. We are of the opinion that Article 25
should give ample suggestion to the countries interested in
this measure, and we see no reason why it should be repeated
here, and the reason why we objected is clearly stated in note 3.
I would like very much to suggest to the Commission that
we dren this paragraph altogether, because it is superfluous,
and even in fact a little dangerous, and I would like also to
indicate the position of my Delegation that if this paragraph
is not suppressed we will have no alternative but to maintain G E/PC/T/A/PV/43
our reservation.
Mr. DEUTSCH (Canada.): Mr. Chairman, I wish to support the
proposal of the Brazilian Delegate to delete this paragraph.
CHAIRMAN: The DeIegate of Belgium - is he of the same
opinion?
Mr. FORTHOMME (Belgium): Yes.
CHAIRMAN: Is there any Member of the Commission who
favours the maintenance of sub-paragraph (e).
CHAIRMAN: This not being the case, I take it that the
Commission decides to omit that sub-paragraph.
Agreed.
We have taken Footnote No. 3 first. We go back on page 17
to No. 1. The Delegate of New Zealand proposed a certain
Amendment, and I think he has considered the matter further and
has given me the following facts.
Delete the words "shall not be modified to the detriment
of imports", and that is what you have on page 17; but he then
says, add the following sentence;
"Subject to any modification which may have been made as
a result of negotiations prior to entry into force of the
Charter, no action will be taken to modify any such measures
to the deteriment of imports, unless the principal suppliers of
the goods concerned have been notified of the proposed. action
and given full opportunity to negotiate thereon."
CHAIRMAN: It is, of course, up to the Commission to define
its attitude to such a proposal beforehand; but nevertheless I
would like to know if there is any Delegate who immediately feels
that he would oppose it. Is there any Delegate who disagrees
with the general idea of this Amendment? S 37 E/PC/T/A3/PV/43
CHAIRMAN: The Delegate of the United Kingdom has asked
that the text be read once more, The second half of the new
sub-paragraph (b) will be similar to the provisions of Paragraph
3 of this Article: "subject to any modification which may have
been made as the result of negotiation-prior to entry into
force of the Chart-r, no action shall be taken to modify
any such measure to the detriment of imports unless the
principal suppliers of the goods concerned have been notified
of the proposed action and given full opportunity to negotiate
thereon."
The Delegate of Canada.
Mr. J. J. DEUTSCH ( Canada): Mr. Chairman, I have not got
the text before, me but I do not like the sound of the whole
thing and therefore I would oppose the general idea.
Mr. J.P.D. JOHNSON (New Zealand): Mr. Chairman, if I may,
I will take the opportunity of explaining the background for this
proposal. I regret it was not possible for me to circulate the
text, which is a little different from that shown in the document
before us.
The idea in connection with this amendment is that it alloys
of existing measures not only to be retained in their present
form but also for some intensification of them, subject of
course to negotiation.
It might help to clarify the situation if I refer to a
particular product which affects New Zealand. It is only the
one product; that is, the growing of tobacco - I think I have
mentioned it before, and possibly most of the Delegates are
familiar with it.
The position there is that we have found that to provide
the necessary protection for the local industry - that is,
growing tobacco leaf - it has not been possible successfully E/PC/T/A/PV/43
employ a tariff and the most appropriate means has been
by requiring the manufacturers of tobacco to use a certain
proportion of locally-grown leaf.
Under the text as it stands, that procedure is approved
of, but it provides that the measure shall not be modified to
the detriment of imports. In order words, there would be no
possibility of utilising such measure, even though it is more
suitable than other measures and less restrictive of trade than
other measures, and we think it could not be justified within
the principles underlying this Charter.
It might be said that you can have recourse to Article 13,
but I do not think it was intended that Article 13 should cover
a situation such as that. I think article 13 is concerned more
with the nature of particular measures. I do not think it would
cover a case where you are using, say, 30 per cent of a domestic
product and you want to increase that to, say, 40 per cent. I
think that would be outside the scope of the Article.
One notices, on looking at Paragraph 3 of Article 13, that
that
it provides/, where the Organization concurs in principle in any
proposed measure or modification thereof, it shall sponsor a
system of negotiation with the Member whose trade is substantially
affected, and if, as a result of those negotiations, a satis-
factory basis is worked out between the Members concerned,
then that basis is acceptable to the Organization.
In other words, it all goes back to a matter of negotiation
and we would submit it is reasonable that the same provision
should be made in connection with the Article which we are
discussing. For that reason, and to make sure that no
Increase should be made in the extent to which an existing
measure might be utilized without negotiation, we have suggested
the modification which you have just read.
S
38 S E/PC/T/A/PV/43
I would submit, Mr. Chairman, that, having regard to the
position which it is intended to cover, such a provision is
justified.
CHAIRMAN: If I understand it rightly, the New Zealand
Delegate's proposal is now only a more elaborate draft of his
original proposal, which simply said that we should strike out
"shall not be modified to the detriment of imports". I would
like to have the views of the Commission on. that proposal. ER 40 E/PC/T/A/PV/43
Mr. J.P.D. JOHNSEN (New Zealand): Mr. Chairman, that also
covers the additional sentence.
M. PIERRE FORTHOMME (Belgium): Mr. Chairman, I think that
this new text shows exactly how very unsatisfactory has been the
development of this whole article. When the sub-Committee started
work on this article we had two main lines along which we could
pursue our work. One of the lines we had proposed in the Benelux
amendment and which in essence, first of all ,would have prohibited
all measures of this kind whether existing or new, and, secondly,
would have allowed certain of these measures if they were less
restrictive than other forms of protection; and, thirdly, would
have introduced a method of gcuging this less restrictive effect
in the negotiations with the interested parties.
The other possibility than the one which was explored was the
possibility of prohibiting any new restriction and sanctioning all
existing restrictions. I think that by now the Commission would
be well aware that I object very much to sanctioning the old, and
frowning on the new, especially in the Charter which is designed to
provide for the future, and I find now that with the proposal to
reintroduce the idea of being able to increase the restrictive
effects of mixing regulations by negotiations, we have got to the
highest degree of discrimination between those who have forestalled
the Charter and those who, having been-reasonable, have waited, or
would wait until the need for such a measure became evident.
I think that a proposal of this kind is absolutely inacceptable
in these terms. I do believe that negotiations with the interested
parties is an excellent measure of the nuisance or value of a measure;
but to reintroduce it in favour of only certain privileged users
seems to me the height of inequity. 41
CHAIRMAN: Are there any other delegates who wish to speak?
Mr. J.P.D. JOHNSIN (New Zealand): Mr. Chairman, I would just
like to make one observation in regard to the remarks of the
delegate of Belgium. I would just like to ask him whether I heard
him correctly when he said that action has been taken to forestall
the Charter. I would like to assure him that no action of such a
nature has
been taken by New Zealand. The measure that I referred to has
been in operation for some years.
M. PIERRE FORTHOMME (Belgium): Mr. Chairman, I would like to
make it quite clear that the use of the word "forestall" did not
imply in my mind any idea of some rapid manoeuvring on the part
of this or that delegation. What I wanted to indicate was that
by the fact of having this measure in force at a certain date,
luck, if you like, has given certain countries - and as a matter
of fact it includes Benelux - the privileged position in comparison with the
position of other countries which do not have that kind of measure
in force.
Mr. J.M. LEDDY (United States): I would agree with the
delegate of Belgium that it would be inequitable to provide in this
Article that Members who have mixing Regulations may alter them to
the detriment of imports and at the same time that Members who do not
have mixing regulations can put them into force. On the other hand,
I think that the one case which the delegate of New Zealand has in
mind is adequately covered by Chapter IV. It would be a new measure
on the ground of economic development, and I see nothing in Chapter
from
IV which would prevent New Zealand from applying through the Organisation
for a change in mining regulations, and with the approval of the
Organisation or of the Members interested, if there had been
negotiation on the subject, to alter the Regulation. The provision ER 42 E/PC/T/A/PV/43
that we read out, I think, has covered that case. Therefore I
would oppose the proposal by the delegate of New Zealand.
.~~~~~~~~~~h
thCHAIMAI: Does th legale the United States give
atisfaction to the delegate of New Zealand?
Mr. J~p.JOIWNSe ZMrealand): I am sorry, .W. ChOairn,
Is am grateful for the obervation made by the delega-e of the
United Staces, but I am afraid I Gannot accept it. It seems to
mecthet this is purely a oasb for negotiation with the Members
principally interested. I cannot see that any purpose is being
covered in bringing the case to the Organisation. *en if it is
co.peAent to deIlandth it. is far as 1 caa see all we could do
is te refer the matter to Mombers and accept what decisions they
have re ciec. I think in theh.ipoumstances it is more oracticable,
~nd quite peasonabne, to inclAde clovisiors in this .rtiG e, deal-
ing with the situation, I would like, if possible, to have the
amvndcent which I have ad-anoed, accepted. J. 43 ~~~~~~~A/PPCT/.L/FV//43
MR. J,M. LEDDY (United States): Mr. Chairman, this subject.
was discussed at considerable length in the sub-committee on
Article 15, and I think that the view at the time was that the best
thing to do was move the approval of the provision as it stands,
with the reservation of the Delega Ze of NewZealand.
CHAIRMI Before doing that, I would like to ask whether
any Delegate wants to speak in favour of the New Zealandenamendmnt?
MR. C.E. MORTON (Australia): Mr. Chairman, it is with a
certain amount of reluctance that I speak in favour of the
amendment of the New Zealand Delegation, because I am not really
in favour of the principle which the amendment would appear to
advocate. cn the oase of a country with a small and perhaps
inefficient primary industry, there is no other way in which you
can satisfactorily bring about its development than by insuring a
quantitative protection for it. Australia had the unfortunate
experience concerning a product which was not protected by
quantitive regulation, with the result that the protection of this
Article is decreased, and it js now Just a shadow of its former
self.
I am sorry that my support of this amendment cannot be more
wholehhearted, but I feel that it is a shame to let it go without
a single friend.
NHAIAMWi: Lre there any other remarks?
MR. F. GARCIA OLDINI (Chile) (Interpretation): If I
understand the point correctly, Mr. Chairman, there is no rigidity
in the idea of applying quantitive restrictions in the present
cace, This is mainly a matter of procedure. According to the J. 44 E/PC/T/A/PV/43
United States Delegate, the procedure that should be applied is the
procedure provided for in Article 13. Now, under Article 13,
there is a procedure which world lead to negotiations through a
road which is long, complicated and rather difficult. Therefore,
I see no disadvantage in avoiding the use of such a prooedure, and
reaching the end contemplated, by establishing negotiations along
the lines suggested by the New Zealand Delegate in this particular
case.
CHAIRMAN: Are there any further remarks?
This not being the case, I must sum up my impression of the
discussion, which is that three delegates have - one with some
reluctance - supported the New Zealand proposal, and three have
expressed themselves very strongly against it. I have asked twice
for further support, so I must conclude that the great majority of
the Commission does not support the New Zealand proposal. The
way of settling the question, therefore, is to maintain the Note
which is on page 17 of document E/PC/T/178, perhaps with some new
wording. I will leave it to the Delegate of New Zealand to came
to an agreement with the Secretariat on the wording of this new
Note. V
CHAIRMAN: Then we have the second footnote on page 17 of
T/lRS: "The Delegate for Norway proposed that 'the date when the
Charter is open for signature' should be. substituted for '1 July
1939 or 10 April 1947' " . Does the Delegate of Norway maintain
that proposal?
Mr. J. MELANDER (Norway): Yes, Mr. Chairman, it is included
in our general reservation. I would propose that the Commission
take a stand on this particular point right away. It is a proposal
which is before the Commission. If the Commission agrees - well,
so much the better.
CHAIRMAN: I will follow the same procedure here as in the last
case. I will ask whether there is any Delegate who will support
the Norwegian proposal on this point?
M. F. Garcia OLDINI (Chile)(Interpretation): I support this
proposal.
CHAIRMAN: Any further remarks? There being no remarks,
I think we might also in this case maintain the note, unless the
Delegate of Norway finds, as he has already indicated, that he is
covered by his general reservation on article 15. I leave it to
him as to whether we have a special reservation here.
Mr. J. MELANDER (Norway): Mr. Chairman, we do not think
it is necessary to have a special reservation on this particular
point - a general reservation on the whole Article is sufficient.
CHAIRMAN: Then before we finally approve paragraph 4 of
Article 15, I will draw your attention to the note by the Legal
Drafting Committee, on the bottom of page 16:
"The Commission may wish to consider whether the exceptions
contained in paragraph 4 are to be exceptions to paragraph 2 as E/PC/T/A/PV/43
well as to paragraph 3. Paragraph 3 begins "In applying the
principles of paragraph 2", and paragraph 4 begins "The provisions
of paragraph 3 of this Article shall not apply", so as far as I
am concerned, I think it is all right to keep the text on which
the Sub-Committee has agreed; but I must ask whether any Delegate
feels that it would be safer or wiser to say "The provisions of
paragraphs 2 and 3 of this Article shall not apply to".
Mr. J.J. DEUTSCH (Canada): Mr. Chairman, it appears to me
that if we add "provisions of paragraph 2" it will have the effect
of widening considerably the paragraph 4, and I do not think that
was intended. Therefore, we. should keep the language as it is,
namely, "The provisions of paragraph 3".
Dr. H.C. COOMBS (Australia): Mr. Chairman, it is quite
clearly not the intention of the Sub--Committee that this should
extend to paragraphs 2 and 3.
CHAIRMAN: Then I take it that we maintain the text proposed
by the Sub-Committee and the Legal Drafting Committee. Now,
having disposed of all the notes and reservations, I take it that
we agree to paragraph 4 with the amendments already approved,
including the supp-zsaion, of course, of the old sub-paragraph (b).
On page 18 of document T/178 you have the old paragraph 5.
As we have already dealt with and approved a provision concerning
films, this paragraph 5 is to be omitted. The same applies to
the two notes on page 18.
We pass on to paragraph 6 (that will be paragraph 5 now).
The note of the Legal Dafting Committee says: "It is the opinion
of the Committee that the word 'governmental' is not open to
misinterpretation in the English text; it comprises all government
bodies including local authorities. The French wording has
V
46 47
therefore been adjusted accordingly". This note is an answer
to a query put to the Legal Drafting Committee by the Sub-Committee.
I would ask-the Chairman of the Sub-Committee whether he
considers it desirable to insert an explanatory note to cover
the point, or whether that is superfluous.
Dr. H.C. COOMBS (Australia): It seems to me, Mr. Chairman,
that there is no doubt that the comment of the Legal Drafting
Committee is satisfactory so far as the English text is concerned.
I would not presume to offer any judgment on the French text,
but I understand from my Belgian colleague that, in his opinion,
it is adequate.
E/PC/T/A/PV43
V E/PC/T/A/PV/43
CHAIRMAN: Then I take it that we .leave it to the note by
the Legal Drafting Committee. You have at the bottom of page 19
that "The Delegate for China reserved his position provisionally
and, proposed to delete the words "or use in the production of
goods for sale."
You find that in the fifth and. sixth lines in the English
text. Does the Delegate of China maintain that reservation?
Mr. WUNSZ KING: (China): Yes.
Mr. GARCIA OLDINI (Chile): The remark made by me only
refers to the French text, as submitted by the Legal Drafting
Committee.
CHAIRMAN: The Delegate of Chile suggests that the text of
the Sub-Committee be adopted. instead of the text of the Legal
Drafting Committee.
Mr. FORTHOMME (Belgium) (Interpretation): The note of
the Legal Drafting Committee shows clearly the reasons for this
change. The English words "governmental agencies" covers more
than the French words "organismes d.'etat", because it also covers
municipal or provincial bodies; and therefore-I think that the
change here is justified..
Mr. GARCIA OLDINI (Chile) (Interpretation): In that
case I see no inconvenience in keeping the text submitted. by
the Legal Drafting Committee.
CHAIRMAN: The Delegate of France.
Mr. ROUX (France) (Interpretation): The French Delegation
thinks that the remark made by the Legal Drafting Committee in
48 G
49
E/PC/T/A/PV/43
the note is quite relevant, and the French text as it now
stands is entirely in conformity with the idea expressed in
the English text, namely, that the provisions of the Article
shall not apply to the procurement by governmental agencies
of products purchased for governmental purposes, and therefore
the Chilean Delegate could consider himself as fully satisfied.
Then there are various clerical errors which only affect the
French text.
CHAIRMAN: May I take it that after these explanations you
approve the text of paragraph 6 (now paragraph 5) of Article 15?
Approved.
Now we should persevere with article 14. We will look at the
Report of the Sub-Committee, and I would ask the Chairaan of the
Sub-Committee whether there is any point on that Report to which
he wants to draw particular attention.
Dr. COOMES (Australia): I think there seum to be a number
of points which do amount to an interpolation by the Sub-Cornittee,
and I think it would be chesir-able if they were confirmed by the
Commission. The first appears at the top of page 7 in the first
paragraph, where it says, "Since the present paragraph 2 relates
solely to the question of differential treatment between
imported and domestic goods, the inclusion of the last sentence in
that paragraph should not be understood to give sanction to the
use of artificial measures in the form of differential transport
charges designed to divert traffic from one port to another". P 50 E/PC/T/A/PV/43
CHAIRMAN: May I take it that the Commission approves of
that remark?
It is approved.
DR. H. C. COOMBS (Australia): And the second point, I
think, Mr. Chairman, is on the same page, in the second paragraph:
This is referring to charges on imports in connection with a point
raised by the International Monetary Fund. The essential part,
I think, is the statement that; "The Sub-Committee considered
that if such charges are imposed. on or in connection with imports
or exports as such, or are imposed on the international transfer
of payments for imports or exports, they would not be internal
charges and, therefore, would not be covered by Article 15; on
the other hand, in the unlikely case of a multiple currency
technique, which takes the form of an internal tax or charge, such
as an excise tax on a particular product, then that technique would
be precluded by Article 15. It may be pointed out that the
possible existence of charges on the transfer of payments insofar
as these are permitted by the IMF is clearly recognized by
Article 14"
CHAIRMAN: Does this interpretation meet with the approval
of the Commission? No objections?
Approved.
Dr. H. C. COOMBS (Australia): The third point, Mr.Chairman,
is on page 8, in the second paragraph, which reads as follows: -
"The Sub-Committee is of the opinion that paragraph 3 as now
drafted would not prohibit the continuance of a tariff system
which permits the entry of a product at a rate of duty lower than
the normal tariff rate, provided the product is mixed or used with
a certain proportion of a similar product of national origin. E/PC/T/A/PV/43
The Sub-Committee considered that such a provision would not
be regarded as an internal quantitative regulation in terms
of this paragraph for the reason that the use of a percentage
of the local product is not made compulsory nor is the
importation of the product in any way restricted."
CHAIRMAN: Does this opinion meet with the consent of the
commission? No objections?
Dr. A. B. SPEEKEYBRINK (Netherlands): May we ask one
questions we only speak here of tariff rates, but we can have
other charges on imports, Are they not included?
Dr. H. C. COOMBS (Australia): Mr. Chairman, the only
thing I can say is that the only point which was raised in
the Sub-Committee was the precise question of differential
tariff duties, tariff items, themselves, and I am not sure,
therefore, whether this would apply in the case of other
charges on imports; but presumably, since we hae identified
charges on imports with tariffs elsewhere, I see no reason
off-hand why the same provision should not apply if the charge
is, in effect, a duty.
CHAIRMAN: Does this give satisfaction?
Dr. A. B. SPEEKENBRINK (Netherlands); Definitely.
CHAIRMAN: May I take it, then, that we agree to the
remarks made by the Sub-Committee on this point?
The Delegate of Norway,
Mr. J. MELANDER (Norway): Mr. Chairman, I would like
also to have included the next paragraph after the one we
P P
are Just discussing now; that is, at the bottom of page 8 and
the top of page 9. It refers to the mixing of butter with
margarine.
Dr. H. C. COOMBS (Australia): I was just about to make that
my next point, Mr. Chairman. Is it necessary for me to read the
paragraph?
CHAIRMAN: No, I take it that we are in agreement with that
statement by the Sub-Committee. No objections?
Agreed.
Dr. H. C. COOMBS (Australia): Then on page 9, Mr. Chairman,
in the third paragraph, there is a further statement to the effect
that it was agreed by the Sub-Committee that the word "governmental"
etc.... I think that point has been covered in what has been
agreed to so far, and I do not think it is necessary therefore to
deal with it.
CH.AIRMAN: Now, as to the remark by the Delegate of Norway,
that he wants to have also this point included, I would just make
it clear what is my conception of the thing: that is, that we have
gone through all these Explanatory Notes by the Sub-Committee, not
in order to annex them to the Charter, but in order to have it
recorded in our Minutes that we have gone through them, and that
the Commission has expressed its agreement with the views of the
Sub-Committee on each one of these points,
I am not quite certain whether I saw the Delegate of China
asking to speak, or not. E/PC/T/A/PV/43
H. E. Mr. WUNSZ KING (China): Yes, Mr. Chairman. With
your permission, I would like to say that I am reminded by my
colleague on the Sub-committee that the Chinese Deleeation made
a reservation on Paragraph 3 but that reservation was withdrawn.
I have no intention whatsoever off renewing that reservation,
but I would simply like to point out that the Chinese Delegation
still has some doubts as to whether it would be proper to use
the words "competitive or substitutable" in sub-paragraph (b)
of Paragraph 3 on Page 15, inasmuch as our first reservation
to Article 15, that is to say, the reservation to Paragraph 1,
was and is still based, among other things, on our objection to
these words. But, Mr. Chairman, this short comment is only
intended to be a short comment, pure arid simple.
CHAIRMAN: Before passing from Article 15, I would ask the
Delegate of France if he has any suggestion to make on the
film problem.
M. ROYER (France) (Interpretation): In connection with the
film question, I have just been informed by the competent
technical services in Paris that they have not had the time
necessary thoroughly to study Article. 15 (b) and therefore my
Delegation associates itself with the reservations already made
by the United Kingdom, the Netherlands and the Czechoslovakian
Delegations, more particularly with regard to the duration of
the quota system mentioned in sub-paragraph (a) of Article 15 B.
CHA.IRMAN: We will take note of that declaration.
We no: start the examination of Article 24 - Reduction
of Tariffs and Elimination of Preferences. Are there any
remarks on the introduction to Paragraph 1?
Then that is agreed, at any rate provisionally. We can
adopt it finally Then the whole Article has been examined,
S E/PC/T/A/PV/ 43
Sub-paragraph (a). of Paragraph 1: on.Page 21 you have a
Notes "There was an equal division of view among the Members
of the Sub--committee on the question whether the words in
square brackets should be deleted or retained. The Delegates
of Belgium, Norway and the United States favoured deletion,
those of Australia, Cuba and the United Kingdom retention of
these words. The Delegate of the United States considered
that complete deletion of sub-paragraph (6) would be the best
course."
I will call upon the United States Delegate, who has made
the most sweeping proposal, kindly to explain it.
Mr. LEDDY (United States): The difficulty arose, I
believe, in regard to the promise language of the provision.
It was our view that the provision was not necessary, that it
was already covered by the basic commitment to negotiate.
In order to remove any doubts, we have today distributed
a mimeographed sheet suggesting that, in connection with the
deletion of sub-paragraph (a) of Paragraph 1, there be included
an Explanatory Note in the Report.
CHAIRMAN: The Delegate of the, United Kingdom.
Mr.SHACKLE (United Kingdom): Mr. Chairman, we are agreeable
to the proposal contained in this paper. There is just one
thing I would like to say. I would like to call attention to the
word "starred" in the third line. That refers, of course, to
the practice in certain Sub-committees of affixing stars to those
Notes which ought to go forward so as to become part of some
king of official commentary on the final text. I will accept
S E/PC/T/A/PV/43
this proposal conditional or. that word "starred" being deleted.
Subject to this, we are quite in agreement.
CHAIRMAN: You have the text of the United States proposal
before you.
The Delegate of Cuba.
Mr. H. DOEN (Cuba): On behalf of my Delegation, I wish
to sey that the Cuban Delegation could agree with the deletion
of sub-paragraph (a) of Paragraph 1 of Article 24 in the case
that the Note proposed by the Deblegate of the United States
were not only to be inserted in the report but annexed to the
text of the Charts ., giving it thereby the character of a
binding condition of Paragraph 1 of Article 24, in its intro-
ductory part, in connection with the actual Paragraph 1(b).
CHAIRMAN: I take it that the desire of the Cuban Delegation,
now put forward, is to treat this Explanatory Note in the same way
as we treat other Explanatory Notes; that they are put in on
the same page as the Article to which they refer. It will
appear as a part of the document itself, but, of course, it
will not be part of the Charter. We have omitted a certain
clause, but it will have the full :interpretative value.
S 56
M. H .DORN (Cuba): M. Chairman, may I only ask one question.
Are there other notes which are ann..z:.d to the Charter in order to
give the Charter a special interpretation, or is that the only
existing form in which a note can be given/an official interpretative
character?
CHAIRMAN: We have a small number of such interpretative
notes, and we discussed them the other day. The delegate of South
Africa very strongly maintained that the Charter itself should con-
tain some clause stating that this interpretative note could have
a full binding valle. Whether we shall fix. adept it I
cannot tell because I do not know. It may be taken up at another
meeting, but this note will be treated as well as any other inter-
pretative note.
M. H. DORN (Cuba): In this case I would agree with the note
under the condition that the South African amendment will be
adopted later on.
CHAIRMAN: Well, that condition, of course, car only be made
the
under a mental reserve because we cannot decide here wh-` /heads
of delegations in the Preparatory Cormittee and in Executive Session
may find as a result.
Mr. R. J. SHACKLE (United Kingdom): I think, Mr. Chairman,
there were plenty of precedents in the past for interpretative
texts attached to an agreement, but they are not necessarily part
of that Agreement. I think there/were many such cases in the past,
and we shall find a satisfactory method.
CHIRMAN: After this discussion which really was a kind of
deviation from the text before us, I take it that the Committee is
in agreement with the proposaI of the United States delegate to omit
sub-paragraph(a), and instead of that,to insert the note of which he
has given us the text. 57
Are there no objections? That is agreed.
Then on the top of page 22 we find a note by the Legal Draft-
ing Committee. That has been settled already. We come to sub-
paragraph (b) which will now be sub-paragraph (a). Where is a foot-
note: "The Delegate for Cuba wished to have it recorded that the
Cuban agreement to the inclusion of this sub-paragraph is contingent
on the retention of sub-paragraph 1(a) in its entirety."
May I take it that the delegate of Cuba is satisfied with the
insertion of the note that We have just discussed?
M. H.DORN (Cuba): I mentioned a reserve before in this
connection because we believe that there exists between (a) end (b)
a possibility of doubt which we want to exclude.
CHAIRMAN: But I hope that the question now is satisfactorily
settled and that we can strike it out.
M. DORN, (Cuba): Under the condition which, as I have been
told, is a mental one.
CHAIRMAN: Are there any remarks on the different sub-paragraphs
namely, the new sub-paragraph (a) i,ii.,iii, and iv.?
Mr. J.M.LEDDY (United states) in .the Sub-Committee's Report,
Mr. Chairman, it is stated that: "One member of the bub-Committee
suggested that the words land no new contractual right to preferences
shall be created" should be added after the word increasedr at the
end of sub-paragzaph (iv).'1 'he Sub-Committee thought that this
condition should be reserved for the consideration of Commission
That was our proposal, Mr. Chairman,but we do not wish to con-
sider that at this late stage of the discussions. We think that
while there may be a tactical gap here, it would be wise not to take
it up now as this would start a complicated technical discussion,
and we should prefer to let it stand for the time being.
E/PC/T/A/PV/43 58
E/PC/T/A/PV/43
CHAIRMAN: May I take it that we approve sub-paragraph (b),
now sub-paragraph (a), points (i), (ii), (iii) and (iv)?
The Delegate of France.
(M. ROYER (France): made a. remark which does not apply to the
English text, and which was not interpreted)
CHAIRMAN: I do not think there is any objection to this
improvement.
We therefore agree on the new sub-paragraph (a).
We now come to the former sub-paragrap h (c), now
sub-paragraph (b) on page 23. Is there any objection?
M. ROYER (France) (Interpretation): Now that it is suggested
to have only one word, I prefer the French word "consolidation"
rather than the words "Le maintien conventionnel".
CHAIRMAN: Are there any further observations?
This clause is, therefore, adopted.
The Note by the Legal Drafting Committee is disposed of by the
remarks of the French Delegate.
We pass on to the old sub-paragraph (e), now sub-paragraph (c).
In document E/PC/T/W/270 we have an amendment submitted by the
United Kingdom.Delegation. You will see that the United Kingdom
Delegation proposes to omit the whole text and to insert in its
place a new sub-paragraph (a). You will have noted that the
United Kingdom proposal took the form of an amendment to a paper
submitted by the Tariff Negotiations Working Party in document 136.
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, I think that
the substance of this amendment has already been taken into account
in the version of the Legal Drafting Committee. In sub-paragraph (e)
J. E/FC/T/A/PV/43
on page 24 of the Legal Drafting Committee's text, you will see at
the end the words "and thereupon the parties to such negotiation
shall become contracting parties to the General Agreement on Tariffs
and Trade, if they are not so already". That replaces document
E/PC/T/W/270.
There is only one thing that I should add, and that is that
there is a corresponding passage to this in Chapter VIII, which
refers to the Tariff Committee, and I think. we have got to be rather
careful that the drafting of these two passages harmonises.
It is, I think, clear that the parties to the negotiations
would only become contracting parties to the General Agreement if
the existing parties to the General Agreement themselves agree to
that happening. I think that is implied by the text here, but
that is the essential point to be brought out, and I think it is
already brogght out in the text of the relevant Article in
Chapter VIII - I am sorry, but I have not got it in front of me
now.
CHAIRMAN: Is there agreement on the text you. have on page 24
under the heading (e), which will now become (c)?
There is only one slight remark that I might, perhaps, dare to
make with regard to the words signedd at Geneva on". Be do not
know that it will be signed at Geneva, although I have no objection
to leaving it in.
MR. R.J, SHACKLE (United Kingdom): We could put dots in
instead of the word "Geneva".
CHA IRMAN: Is that agreed?
Then we pass the text of this Paragraph.
59
J . 60 E/PC/T/A/PV/43 .
We now pass on to paragraph 2 of Article 24. There is also
an amendment suggested by the United Kingdom Delegation in the
paper I referred to, that is, document E/PC/T/W/270.
MR. J.M. LEDDY (United States): Mr. Chairman, I think that
that is already taken care of in the Drafting Committee's Report.
CHAIRMAN: That is so.
Are there any other remarks on paragraph 2?. 61
Mr. J. LEDDY (United States): One very small point: we
notice the deletion of the words "by the Organization" at the
end, and in the French I see there is some reference to notice
being directed to the Directer-General of the Organization. I
wonder what the difficulty is there. I believe that throughout
the whole substance of the Chapters we have referred only to
the Organization as such, and not to any particular part of the
Organization. I think that the English text, without the
reference, is the Preferable one.
CHAIRMAN: Has any other Delegate an opinion about this?
Then we maintain "by the Organization", and in the French text
"le mise en application de la mesure en question et sur preavis
adressé par écrit à l'organisation, e ?.-ci l expiration..."
Is that agreed?
M. ROYER (France) (Interpretation): I think that it is
at the end that the words in brackets should be retained - "the
date on which written notice of such withdrawal is received by
the Organization".
CHAIRMAN: We must strike out "Director-General" from the
French. are we now in agreement on this text?
(agreed).
Paragraph 3. Any observations? Agreed.
There is a footnote on page 20: "The Sub-Committe- agreed
that the text of Article 24 as drafted would not prevent Members
of the Organization from concluding new, or maintaining existing,
bilateral tariff agreements which were not incorporated in the
General Agreement on Tariffs and Trade, provided that the
concessions provided for in such agreements were generalized to
all Members in accordance with the terms of Article 14."
E/PC/T/J,/PV/43
V E/PC/T/A/PV/43
On this explanatory note there is a Norwegian proposal to
make it a new paragraph 4 of Article 24.
Mr. J. MELANDER (Norway): Mr. Chairman, the reason why
we have produced this amendment is that the history of the texts
leading up to the agreement so far achieved, by the Preparatory
Committee would make it useful, in our view, to have this
explanatory note in the form of a new paragraph.
You will remember that the United States draft proposal,
the London agreement and the New York text of Article 24,
paragraph 1, refer to the obligation of each Member, upon the
request of any other Member or Members, to enter into these
negotiations. Now Article 24(1) has been altered to read that
each Member shall, upon the request of the Organization, carry oat
such negotiations as the Organization may specify. Also, in
the new paragraph 1(e) it is expressly said that the results of
the negotiations shall be incorporated in the General Agreement
on Tariffs and Trade.
Further, the second paragraph of the New York text,
according to which the Members should inform the Organization
about the progress of their negotiations, has been deleted in
the new text.
It is for these reasons that we feel it would be useful to
have it expressly stated - although it is generally agreed by
everybody - that paragraph 1 in Article 24 does not exclude
bilateral tariff agreements; of course, on the assumption that
the concessions under such agreements will be made for the
benefit of everybody by virtue of Article 14 of the Most-
Favoured-Nation clause. It is our view that, especially
because of the history which has led up to this, so to speak,
last-minute change in this important provision, it would be very,
useful to have expressly stated in a paragraph the point covered
in that note.
V 63
Mr. SHACKLE (United. Kingdom: I would like to make
a suggestion that instead of putting this paragraph into the
text of the Article we should try in some way to treat it as
we have just treated. the question' f the United. States
Delegation. In other words, it could, be marked with an asterisk
and sent forward as one of the notes which would be qualified
to go into the final form. The reason why I suggest that
is that I think these two notes should have the same status,
one having no higher or lower status than the other.
The reason is that I have. the feeling that somebody may
think one overrides the other. I am sure it is not the intention
to do this. If we add. this particular note we are now discussing
in the text, somebody would say that bilateral tariff agreements,
of which the results are not generalized. under the most-favoured-
nation clause, would be, as it were, rendered totally illegal.
That could. not be the intention, because clearly there will be
certain particular preferential arrangements remaining which
are sanctioned, subject to the provisions, by this Article.
I feel if we were to put this paragraph into the text of
the Article,owhile leaving the other merely a note, we might
give rise to some such interpretation as that.
For these reasons I suggest we give an asterisk to this
note, and keep it on the same footing as the note in
explanation of the former paragraph 1 (a).
Mr. LEDDY (United. States): Mr. Chairman, we would support
that suggestion of Mr. Shackle's, with just one small Amendment.
The proviso at the end we should like to read as follows:
are with
provided. that such agreements/consistent / the principles of
the relevant Article, and. that the concessions arising out of
such agreements are generalized to all members in accordance
with .Aticle 14".
E/PC/T/L./P7/43
G E/PC/ T/A/PV/43
CHAIRMAN: Any further remarks.
Hon. L.D. WILGRESS (Canada): Mr. Chairman, the Canadian
Delegation also supports the suggestion of Mr. Shackle.
CHAIRMAN: What does the Norwegian Delegate say to the
drafting Amendment?
Mr. MELANDER (Norway): Accepted.
Dr. COOMBS (Australia): Does the United States Delegate
consider including the words "relevant principles"?
Mr. LEDDY. (United States): The proposal is consistent
with the principles. I wonder whether the word is really
needed.
CHAIRMAN: The Delegate of New Zealand.
Mr. JOHNSEN (New Zealand): There is just one point
Mr. Chairman, on which I am not clear. There is some reference
to Agreements being extended to all other States-Members. In
the case of bilateral agreements made between Members by virtue
of a preferential system, I would just like to be sure that
there is no obligation to extend these concessions to all
Members.
CHAIRMAN: In so far as under the most-favoured-nations
principle it concerns them, these bilateral agreements will
bring in all Mernber States; and in the bilateral agreements
you can enter the number of things that do not directly concern
tariffs, and it is an open question to what extent they will
have to be shared with all other Members of the ITO.
64 E/PC/T/A/PV/ 43
Mr. R.J. SHACKLE (United Kingdom): I would think
that the point mentioned by the Delegate of New Zealand is
covered by paragraph 2 of Article 14. It is a question, as
in that Article, of independent agreements. I do not think
there should be any inconsistency. That is why I propose
that we retain this as a note and not as part of the text of
the Article.
Mr. J. MELANDER (Norway): Mr. Chairman, in view of
what has been said by the United Kingdom Delegate I agree
with the proposal that we should make this particular note
one of these interpretative notes on the same standing as
the ones referred to by the United States Delegate, instead
of making it part of the substance of the Article itself.
CHAIRMAN: Is there any divergent opinion? Then we
agree to the adoption of an explanatory note of the standing
previously laid down and to the following redraft of the
Norwegian proposal:-
"The provisions of this Article should not prevent
Members from concluding new or maintaining existing
bilateral tariff agreements which are not incorporated
in the General Agreement on Tariffs and Trade provided
that such Agreements are consistent with the principles
of Article 24 and that the concessions arising out of
such agreements are generalised to all Members in
accordance with Article 14." E/PC/T/A/PV/43
CHAIRMAN: The Delegate of Czechoslovakia.
H. E. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
would like to make my reservation on the proviso of the United
States Delegate, because he says provided that they are consistent
with Article 24. If it means actually that they should be
mutually advantageous - well, I may be negotiating, and some third
party can come and say to me that it is not mutually advantageous.
I think if I am giving, unilaterally, to some country reductions on
tariffs , and I am extending it to all Members, that is only my
business.
Dr. J. E. HOLLOWAY (South Africa): Mr. Chairman, this is one
of the cases where nobody would take Dr. Augenthaler to lawl
CHAIRMAN: Does the Delegate of the United States feel very
strongly the need of this proviso - that such agreements are
consistent with Article 24?
After all, all the Members of the I.T.O. are committed to
observe the principles of Article 24 and it seems rather a hint
that when they are negotiating bilateral agreements they might do
something wrong, something inconsistent with the obligations to
which they have subscribed. Would it not be more reasonable to
have confidence that they are observing their commitments?
Mr. J. M. LEDDY (U.S.A.): Mr. Chairman, it was our view
that tariff negotiations between members of the ITO would proceed
in accordance with certain rules laid down in Article 24, and I
refer specifically to the rule set forth in new sub-paragraph (a)
of paragraph 1. If we had no note, we would have very little
difficulty, but since we have a note and it is inexact, we should
just like to have that deficiency repaired.
I really do not think anybody is going to have any difficulty
P
66 P 67 E/PC/T/A/PV/43
with the kind of Agreement Mr. Augenthaler is talking about.
If two countries agree, it is, after all, mutually
advantageous, or they would not agree, But we do attach
importance to the other principles particularly.
Dr. H. C. COOMBS (Australia): I think, Mr. Chairman,
there is something to be said for leaving in the word
"relevant"; even though I agree with the Delegate of the
United States that the words "consistent with" implies
that,lit polutes only to the relevant clauses, I think
if you include the word "relevant" it does emphasise the
idea that there are provisions of Article 24 which are, so
to speak, special, because of the particular negotiations we
have got in mind, and they would not necessarily have anything
to do with - would probably not refer to - other negotiations
which might be entered into as contemplated in this note.
I think there might be some advantage in leaving in the word
"relevant". I think that might cover the point, for
instance, raised by the Czechoslovakian delegate, and he
might reply "Well, that position is not relevant to these
particular negotiations."
CHAIRMAN: Is this Australian suggestion accepted by the
United States of America?
Mr. J. M. LEDDY (U.S.A.): I take it that our minds
meet on this point; that we agree that the relevant
principles pertaining to Article 24 are those which appear
in paragraph 1 (a)
Dr. J.E. HOLLOWAY (South Afraca): Mr. Chairman, I
hope Dr. Augenthaler will withdraw his reservation, because,
if he is riqht, the South African Delegation has already in
the course of these negotiations broken the rules by giving
concessions in a particular case without getting anything
back! E/PC/T/A/PV/ 43
CHAIRMAN: May I take it that we are now all in agreement
on the Note in the text I read out, with only the addition
of the word "relevant", so that it would read: "with the
relevant provisions of Article 24." Is that agreed?
(Agreed).
M. FORTHOMME (Belgium) (Interpretation):
The Belgian Delegate made a suggestion with regard
to the French text of the last sentence of Paragraph 2 which
does not affect the English text.
CHAIRMAN: I think we would all agree that is a great
improvement.
Now I must once more bother the Chairman of the Sub-committee
Dr. COOMBS (Australia): `I have much pleasure in saying
that, so far as I amaware, there are no comments of-inter-
pretation by the Sub-committee dealing with this Article
which require determination.
CHAIRMAN: This brings to an end Commission A.
The Meeting rose at 7.45 p.m.
6S
S |
GATT Library | qt524rh1996 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Fourteenth Meeting of Commission A held on Thursday, 19 June 1947 at 2.30 p.m. in the Palais Des Nations, Geneva | United Nations Economic and Social Council, June 19, 1947 | United Nations. Economic and Social Council | 19/06/1947 | official documents | E/PC/T/A/PV/14 and E/PC/T/A/PV.13-15 | https://exhibits.stanford.edu/gatt/catalog/qt524rh1996 | qt524rh1996_90240099.xml | GATT_155 | 7,924 | 49,111 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PVI/14
19 June 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE.
UNITED NATIONS CONFERENCE ON TARADE AND EMPLOYMENT.
VERBATIM REPORT
FOURTEENTH MEETING OF COMMISSION A
HELD ON THURSDAY, 19 JUNE 1947 AT 2.30 P.M.
IN THE PALAIS DES NATIONS, GENEVA .
M. MAX SUETENS
(Chairman)
Delegates wishing to make corrections in their speeches
should address their communications to the Documents Clearance
Office, Room 220 (Tel.2247).
NATIONS UNIES
(Belgium) L. 2 E/PC/T/A/PV/14
CHAIRMAN (Interpretation): The meeting is called to
order.
We will proceed with our Agenda and take up Articles 31, 32
and 33,
This is an extremely important section covering state trading.
In connection with paragraph 1, there are two amendments; The
first moved by the Ozechoslovak delegation and the second by the
delegate of the United States. I will oall-upon-both-dalegat ions
to speak to their amendments. E/PC/T/A/PV/14
H.E. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, Gentlemen,
during the discussion on the statement of the Belgian delegation I
had the honour to point out three aspects connected with state-
trading operations.
The first was that it is a mistake to consider state-trading
as opposed to free-trade and that in our view the opposite of
free-trade is protectionism, as state-trading actually may be
either protectionist or tending to an expansion of world trade.
SecondIy, I pointed out that we are living in a period when
entirely new forms of economic life develop and that is is
extremely hard to make precise provisions for something which up
till now has no definite form and which operates under entirely
abnormal conditions.
Thirdly I remarked that the whole issue is obscured today by
certain considerations which in their substance have nothing to do
with state-trading itself but which are just an expression of
abnormal post-war circumstances such as are shortages of commodities,
scarcities of freely convertible currencies, disequilibrium in
balances-of-payment and so on, all cases for which there are
special provisions in the Charter.
I suppose that the provisions of Article 31 and 32 - I have no
definite feeling as to Article 3 - are intended to come into force
only when the special difficulties I mention above, that is, the
disequilibrium of balances-of-payments and shortages of commodities,
disappear and when the state-trading countries will be faced by a
situation in which their exports could freely flow into some
markets of other countries and when all com itions will exist in
the state-trading countries for removal of restrictions on
import or export.
J.
- 3 - E/PC/T/A/PV/14
Now as to state-trading operations themselves, not only you,
but also we, find it extremely hard to work out a very precise
definition of rules which would apply in the same way to every
specimen of state-trading. Many countries have entirely
different forms of state-trading and most of them are functioning
in entirely different ways.
As sea-faring countries represented here.know very well, it is
customary to baptise ships by breaking a. bottle of champagne
against their sides. I doubt that the same procedure is suitable
for baptising babies.
I think that it might be of some use if I explain what kind
of state-trading we have in Czechoslovakia and how it works, as
all this might help us in our state-trading discussions.
First of all, we have monopolies established and operated
mainly for revenue purposes or for purposes of health and
security. Some of them are centuries old such as, for instance,
the tobacco and salt monopoly or the monopoly for explosives.
There were never any troubles with their functions and :I do not
see any necessity for some new provisions in this respect.
The second group of state-trading enterprises is especially
intended to maintain stable prices for some primary commodities,
mainly foodstuffs, and to assure the farmers of a certain degree
of stable incomes. In these cases there is actually no single
organization but more or less a kind of association of producers,
mills, distributors, and so on, with an obligation to buy from
the farmers for some fixed prices and to sell at fixed prices,
too. The imports and, in the end, the exports, if there are any,
are done on a strictly commercial basis. It goes without
saying that purchases or sales abroad are in direct connection
with the results of home-crops. There is a tendency of the
Czechoslovak Government to plan Czechoslovak home production
- 4 - J.v ~ E/PC/ 5 -T/A/PV/14
incecoordanoe with the recommendations of FAO which means that we
have no intention to increase production or to afford some special
protection to these products for which there are no natural
sondttione in Czechoslovakia. That is, for instance, why our
plan intends to reduce the oreage c ult ivaaedforwhett and some
similar transformations of this kind.
There is a third category of what yca might oPll state-
trading enterprises in our country, but I sometimes doubt very
much if this category falls under the definition of state-trading
at all. Under this category falls what we call nationalized
enterprises, that is, mines and large key industriese Theso
enterprises actually work in exactly the same way as private
enterprises. The state has no control over their commercial
activities. Now you may ask me, what exactly may be the
difference between these enterprises and private enterprises, and
here we come to a point which is only superficially dealt with in
the Charter, namely, economic planning. The sense of this
planning is, expressed in an extremely simplifiea form, thet the
enterprises themselves inform the planning centre about their
production possianlities "Id how they envisage their work.
on
Afterwards the need of raw materials and/so available in the
production is beang calouleted. If it becomes evident that for
instance the requirements of industries producing luxury goods are
toc large and that we would be unable to procure all the materials
required by them, because they are neither available in the
country nor, eor balanco-of-payments rnasons, cam be supplied from
abroad.,pand that tossibily we would be faced with a situation
that we would not have sufficient raw materials for the production
of some essential goods, then the suppmy of aaw nateripls for
non-essential purposes is cut down even if, for instance, the
-E - 6 - E/PC/T/A/PV/14
production of some luxuries would be more profitable than the
production of some essential articles. This is the task being
given to the industries but from that moment on the state
administration interferes in no way with their commercial
activities. These industries are buying and selling according to
their own criteria and are obliged by their very statutes to work
according to commercial considerations.
These enterprises, also, are not controlled as to their
exports. As to imports the only means of control are those used
for balance-of-payments reasons and if there is a plan for imports
it is a very flexible one, based on the requirements of state and
private enterprises and actually consisting only in an equitable
distribution of foreign currencies available at any moment. I
think that this is nothing particular to state-trading, as every
country which finds itself in balance-of-payments difficulties has
to proceed in exactly the same way. That is why we suppose that
what is actually called here state-trading, will become effective
and will be clearly defined only in a few years,when the
reconstruction period will be over, and that only at this moment
will it take a precise shape.
When I said. yesterday that in our opinion the rules of state-
trading in connection with the international markets should be
worked out in the same way as customary law in the Anglo-Saxon
countries is created, there was neither a lack of goodwill from
our side nor a tendency to defer the whole problem.
In the years to come we see actually no practical difference at
all as to the working of economies of other countries in balance-
of-payments difficulties and ourselves and we would need no
special provisions as to state-trading whatsoever.
I hope that these few remarks may be of some use when we
consider articles 31 and 32 about which, I repeat, we feel rather
doubtful. But we are trying to do our best to put the Charter
into force and I hope we will succeed in our work here. G. -7 - E/PC/T/A/PV/14
Now when we were working on our Amendments, we noticed
that some of our Amendments are very close to those presented
by the United States.
In certain Amendments may be there are differences, but
we would be obliged if we can have an opportunity to discuss
this matter with the U.S. Delegations, and to see, if possible,
how to present a common Amendment for Articles 31 and 32. E/PC /T/A/PV/14
CHAIRMAN: The Delegate of Czechoslovakia.
H.E. L. AUGENTHALER (Czechoslovakia) (Interpretation): Mr.
Chairman, during the interpretation of my speech, the English
word "controlled" was interpreted into French by the same word.
Personally, I do not think that this interpretation is quite
correct. We had in mind rather the words directed" or "guided"
CHAIRMAN: I call upon the Delegate of the United States.
Mr. John W. EVANS (United States): Mr. Chairman, before
discussing our amendment, I should like to express our appre-
ciation of the spirit of co-operative-ness and openmindedness
with which the Czechoslovak Delegate has approached the study
of our amendments. I hope with him that we can agree between
ourselves on a text which might not be too far from either
of those already presented, particularly in the case of
Article 31 in which I think the approach of the two Delegations
was quite similar, although there are differences in detail.
With that in mind, I will not attempt to discuss the
detailed differences between these two texts, but I believe
I owe it to the other Delegates present to present at least
a brief explanation of what the United States had in mind in
its proposals for the redrafting of Paragraph 1 of Article 31.
For the most part, we consider these changes to be strictly
drafting changes, even though they may appear to be rather
far reaching. We have attempted to improve what seemed a
somewhat cumbersome text, particularly the rather difficult
reference to the countries in which the enterprise was located
(which got us into some rather complicated grammatical problems)
and we think we have worked out a formula which does precisely
what the original draft did in that respect, but states the
rule in a very much simpler form by use of the phrase "affecting
international trade".
- 8 -
V - 9 -
Our second main change was one that had to do entirely with
eliminating what had been criticised at times as an economic
anomaly in the previous paragraph. I think it was clear that the
operative phrase of the previous paragraph was that enterprises
which came within the scope should carry on those operations in
international trade' according to commercial principles, but because
that had been introduced by a phrase which referred to: "treatment
no less favourable than" it raised the question as to whether we
were implying that commercial principles in the case of a monopoly
necessarily meant that exactly the same price would be offered or
that the goods would be offered for the same prices in different
have simple
markets. In order to avoid that implication, we/made a/change of
recasting the first requirement in terms of the general principle
of the Most-Favoured-Nation treatment, parallel with the provision.
of Article 14 with respect to the operation of privately owned
enterprises, and have kept as before the operative provision, the
provision for purchases and sales under commercial considerations.
The only substantial chance, in our opinion, that we have
is
introduced/to provide a mechanism -whereby the criterion of
"commercial considerations "may have an oppertunity truly to operate, is
in the final phrase "through public offers or bids or otherwise,
shall afford the enterprises of all members full opportunity to
compete for participation in such purchases or sales". We have
tried to reflect in a short phrase, a general principle which does
if it is to remain in existence.
and must control the operations of a commercial enterprise/.
That, Mr. Chairman, I think, is all I can add to the
explanations in the annotated agenda, unless other members of the
Commission would wish to raise any particular questions with regard
to it.
E/PC/T/A/PV/l4 - 10- E/PC/T/A/PV/14
Mr. J.A.MUNOZ (Chile): Mr. Chairman, as we see it the
fundamental change in the amendment proposed by the United States
delegation, consists in replacing the provision of the previous
text which said that. "State trading enterprises shall accord to
the commerce of the other members "treatment no less favourable
than that accorded to the commerce of any country ...."etc.by a new
provision which says that these enterprises shall"act in a manner
consistent with the principle of general Most-Favoured-Nation
treatment". We agree with the United States delegation that this
is not a modification of substance from the New York text, and as
it is explained in sub-paragraph (b), must be interpreted as meaning
that such enterprises, in making their external Purchases or sales,
must be guided solely by commercial considerations. If this is its
true interpretation, we would have no objection to the United States
delegations amendment. We would, Mr. Chairmaun, however, at this
point wish to refer to the comments made by the United States
delegation to the effect that the modifications to this paragraph,
apart from simplifying the language, have, as their object, to
eliminate the possible inference that Most-Favured-Nation treatment
by state enter rises might require the fixing of identioal prices
to buyers and sellers in different markets.
You will recall that, at the request of Dur delegation, the Drafting
Committee in New York placed on record in its Report on page 27:
"that the charging by a state enterprise of different prices for its
sales of a product in different markets, domestic or foreign, is not
precluded by the provisions of Article 31, provided that such
different prices are charged for commercial reasons, to meet.
conditions of supply and demand in export markets".
We understand that the new text proposed for this paragraph
by the United States delegation confirms this interpretation, and
we would therefore request that, in the Final Report of this
Preparatory Commission, this interpretation goes on record - that
is that the fixing of different Prices in different markets for
reasons of competition is included in the expression "commercial
considerations". - 11 -
CHAIRMAN: Mr. Shackle.
Mr. R.J.SHACKLE (United Kingdom): Mr. Chairman, I would
like to deal with two of the points Mentioned by the United
States Delegate. The first is the one to which the Delegate
of Chile has just referred; that is, the substitution of the
phrase about the principle of general Most-Favoured-Nation
treatment for the previous text, which referred to treatment
no less favourable. On the face of it, it seems to us that
that is not in itself an extremely explicit change. It does
not fully explain just what the underlying difference is, and
I entirely agree with the Chilean Delegate that it does remain
very necessary to keep on record what is stated in the note
at the foot of Page 27 of the New York Report, namely, "that
the charging by a State enterprise of different prices for
its sales of a product in different markets, domestic or
foreign, is not precluded ... provided that such different
prices are charged for commercial reasons, to meet conditions
of supply and demand in export markets."
I quito agree with the Chilean Delegate that that
explanation ought to be placed on record in conjunction with
this paragraph.
My second point relates to the words which have been
introduced at the end of (b), namely, "... through public
offers or bids or otherwise, shall afford the enterprises
of all Members full opportunity to compete for participation
in such purchases or sales. " Our feeling is that that
wording is too narrow. It seeks to tie up the State trading
enterprise in a tighter way than the private trading
B/PC/T/A/PV/141
S - 12 - E/PC/T/A/PV/l4
enterprise. The private trading enterprise will have a
wide variety of methods at its disposal. Although it
cannot seek public tenders, nor follow the methods of a
public auction, it will have many more strings to its bow,
so to speak, and we fell that the State trader should have
Just as full opportunity in the methods it employs, so
long as they are truly commercial, as the private trading
enterprise.
For that reason we suggest a somewhat less tight
form of words, to go like this: "and shall afford the
enterprises of all Members fair opportunity to participate
in such purchases or sales." That appears to as to get
the essential underlying idea without tying up too closely
the exact methods which the State trade is expected to
follow. L.. - 13 - E/PC/T/A/PV/14
Dr. T.T. CHANG. (China): I would like to say a few words
concerning what we think of paragraph 1 of Article 31; after that
I would like to explain cur attitude to the comments of the United
States delegation.
Although the Chinese delegation has not introduced an amend-
ment on paragraph 1of Article.31, we do think that the text is
insufficient. Our main objection is to the first part of the
second sentence which reads:
"to this end such enterprise shall, in making its
external purohases or sales on any product be Influenced
solely by commercial considerations, such as price, quality,
marketability",etc
The text does not cover cases in which international loans are
involved. Where an international loan is Involved, it is not
always possible for a country or a srate-trading enterprise in
making its external purchases and sales to be influenced solely by
commercial considerations. China has a loan arrangement with
certain foreign countries, and cannot therefore support the text
entirely.
As to the amendment proposed by the United States delegation,
we oppose it inconnetion with certainFirstly
we oppose it in connection with certain terms. We fear that the
use of the term "general most favoured nation treatment" may lead to
confusion or to undesirable lnflueences. This possbility is also
recognised by the United States delegation in its own comments at
the bottom of page 3 of the annotated agenda (W/198). The United
States delegation has even found it necessary to propose a supple-
mentary paragraph to avoid confusion. We wonder whether confusion
can be entirely avoided, and whether the term ''non-disoriminatory
treatment of state favoured-enterprises"is not sufficien for our
purpose here. We thereafor have thei intention of supporting the
phrasing used in the text. L.
- 14 -
Secondly, the amendment does not cover oases in which inter-
national loans are involved, and in such cases state-trading enter-
prises may not be able to make purchases or sales solely in accord-
ance with commercial considerations.
Thirdly, we are wondering whether the matter can be altered,
partioularly when a certain product is urgently needed and which
should be disposed of in a short time, or when tle policy of a
country is concerned.
For these reasons we cannot agree with the amendment intre-
duced by the United States delegation.
Mr. JOHN W. EVANS (United States): I should like to answer
some of the remarks made by the delegate of China. The first point,
dealing with the problem created for the countries who are the
recipients of international loans, was, I believe, covered in the
Report of the first meeting of the Preparatory Committee. On page
17, section E note no., the statement is made:
"The view was generally held that a country receiving
a loan would be free to takes this loan into account as a
commercial consideration' when purchasing its requirements
abroad. The position of countries making such'tied loans'
was another question."
It was our own feeling when we considered this possibility
that that is the correct interpretation, and I think the delegate of
China has nothing to worry about at least in that respect.
The second point made by the delegate of China has to do with
the interpretation of the most-favoured-nation principle. I would
point out that our reference to "confusion" in our comments dealt
with the confusion created in the earlier draft. We do not think
there is any confusion in our amended draft, because the amended draft
makes it much clearer than the original draft that the requirements:
of commercial considerations is in fact the operative requirement.
E/PC/T/A/PV/14 J. /PC T A/ 3B/~~~~~~~~~~EC/1T/A /PV/1 4
- 15 -
It makes it very clear that that is the interpretation to be
placed on the most-f- vouradnatioa treatment, whereas the connection
between the two in the earlier draft was, I think, much less clear.
I also want to say wish respect to our added wording - this
may be partially an ansurer io both the United Kingdom delegation
and the Chinese delegation - that we did riot provide that "public
offers or bide" was to ropresont the only incans whereby a Member
migWe comply with this general proviLion. li added the words "or
otherwicel in ordcr to tcko carc of the quite obvious fact that
business enterpriees do not always do thir business on the basis
of public offers or bids.
CKAIRICN (Interpre'ation) The delegate of France.
MM C. IGONCT (France) (Inrerpretauion): Yr. chairman, I
would like to make two remarks conlurning the statement made by
the represnctative of Czechoslovakia, which will irnlude, at the
same time, remarks concerning the statements made by the delegate
of China and the dclugate of the United Kingdom.
First, where the sta-emunt of the representative of
Czechoslovakia is concerned, I would like to extend my full support
to it since we are in a similar situation, and we believe that the
drafts of Article 31 and 32 should specify that during the
transitional period when a scheduled programme of exports is
established, provisions should not apply which arc normally
appuicable to a state enterprise, It is q;ite obvious that in
oases, especially during the transitional period, when the external
trade is, ruled by fixed programme, the volume of this trade cannot
be influenced by references to prices nor by the sources of the
purchase. Therefore, during the transitional period, the necessary
exceptions should be made from the cases which are provided for by
the Charter for a state enterprise )nnd the restrictive measures
which are provided for by the Charter for state enterprises should
not apply to them during the transitional period. E/PC/T/A/PV/14
- 16 -
My second remark aims at the statement that a State
enterprise should be considered in the same light as a private
enterprise. That is, that if State enterprises are not allowed
any extra privileges they Whould not bear any additional burdens
- and if private enterprises are allowed a certain discrimina-
tion in their purchase discriminations, which are provided f or
by the Charter, and which make allowances for commercial consider-
ations, loans, and even for a long-range commercial policy, these
same discriminations should also be allowed to a State enterprise
which ought to be considered exactly in the same light as the
private enterprises are.
CHAIRMAN: The Delegate of Canada.
Mr. DEUTSCH (Canada): Mr. Chairman, I listened with much
anxiety to the remarks of the Czechoslovak Delegate and the
remarks just made by the Delegate of France.
I appreciate the particular difficulties that some
countries faced during the transitional period, but I am not
clear that that has any relevance particularly to what we are
now discus sing.
It seems to me that the problems of countries during the
transitional period will be dealt with in the sections dealing
with the balance of payments, and where there are import
programmes, presumably those import programmes are based on an
adequacy of exchange resources, and those programmes would be
carried out under these provisions of the balance of payments,
and I do not think there is any need to make any revision in
the State-trading section. So I do not think that there is any
need here in these provisions to take care of shortages of
exchange which exist during the transitional period. - 17 -
With reference to some of the remarks of the Delegate for
Czechoslonakia, he suggested that we should not try and formulate
rules at this stage, or at least not particularly detailed rules,
but that we should wait for experience.. I think there is a good
deal in that, but I am concerned that the State-trading
enterprises sould not be allowed such greater freedom and scope
that they assume a dangerous position in relation to countries
which are organised on a private enterprise basis.
The Charter does lay down rules for trade that is conducted
on more or less a private enterprise basis, and the rules that
are laid down for State enterprises should not be in general more
loose or provide wider scope than those rules; and therefore
I think we must lay down certain rules here.
I do not maintain that we now know in detail everything they
should provide for; but we must have certain general principles
and rules that must apply to them, otherwise the Charter will be
seriously out of balance.
Therefore, I think we cannot simply accept statements here
that do not provide for some rules.
CHAIRMAN: The Delegate of Brazil.
MIr. RODRIGUES (Brazil): Mr. Chairman, I want to express
our views about the last part of sub-paragraph (b) in the Amendment
added to paragraph 1 by the American Delegation.
We should like to see the words "trough public offers or
bids or otherwise" deleted, because we do not think that this
way of dealing with this matter could be workable.
CHAIRMAN: The Delegate of China.
Mr. CHANG (China): Mr. Chairman, although it is mentioned in
E/PC /T/A/PV/14 G. - 18 - E/PC/T/A/PV/l4.
the London Report that the view was generally held that a
country receiving a loan will be free to take this loan into
account as a commercial consideration to implement its
requirements abroad, we do not think that it is quite
competent that that commercial consideration should cover cases
in which loan arrangements are involved; so we would like to
see the text as it stands here clarified. V - 19 - V1%
CHAIRMAN: The Delegate of Czechoslovakia.
H.E. Ar. Z. ."UGENTHLLkR (Czechoslova~ia): Mr. Chairman;
I think I owe some explanation to the Delegate of Canada. I
hope it was not understood from the remarks I made here that we
do not want any rules at all. You have seen, from our own
amendments, that we are in favour of certain rules. What
I thought practical was that we should not have too many
detailed rules because the period is too uncertain: the
functioning of state enterprises is not yet clear, as the
issue. is confuoed to-day as t. what actually is the substance
of these state enterprises and what is only the consequence
of the balance of payments difficulties. That is one point.
The other refers to the transitional period. For the
same reason, i think that foe a certain timn nobody will
even notice that there is a certain difference between
state enterprises and non-state enterprises, because if
they are acting according to commercial considerations there
can be practically no difference so long as there are
restrictions on exports or imports for reasons of balance
of payments difficuliieser Tho d.iff-xence may only be seen
later and that is why we thoughtbthat it would 'e practicable
to make very detailed rules after wafde when the dilfcrences
come to light.
Now, as to the notion of commercial considerations,
it is in our laws that state enterprises have to act according to
commercial considerources. Of c in this case, they
should not ither for idered,e'_.:r -advantages or disadvantage,
in another way. They have to act as private commercial
enterprises, so they must have the same rights as private
- I-e Jm I t //1 A
O - 20 -
E/PC/T/A/PV/14
commercial enterprises. It means that they. should not be
submitted to some special rules which would discriminate between
them and private enterprises. Let us suppose, for example,
there is a state enterprise in one, country and a private
enterprise in another country which imports wheat. Now,
I could not go to the private enterprise and say, "Why did
you buy the wheat, at what price did you buy it, were you
guided by commercial considerations or not?" because they
would probably say "Mind your own business "' But we feel
that there should not be a door open so that any competitor
might come and say, "Well, you are a state enterprise. You
have to always give a full account of why, what and where you
are buying". I think it would be a discrimination as against
private enterprises, and as we are here to abolish general
discrimination, so I would request the same treatment for
the state enterprises. ER
- 21 -
M. C. IGONET (France) (Interpretation): Mr. Chairman, may I
Support my Czeahoslovakian colleague by Giving two examples which I
think illustrate what he had in mind. First of all, let us take the
example of a French company which has a monpoly of electrical power
in our country. This company has to buy equipment, and it may call
upon foreign corporstions to supply this equioment. Now, if the
French company has to be guided solely by comercial considerations,
it might be argued that it should buy at equal quality the equipment
which will be offered at the lowest price, and which could be
suplied in the shortest possible time. However, there are
other considerations which might influence the decision taken by the
company, just as it might have influenced the decision taken by
private corporations In the same juncture. For instance, we may
want to buy this equipment in Switzerland because of certain
facilities of payment which may be given to the Frenoh State Company
by the government of this country. For instance, there may be a
provision for the supply of elctrical power at a later date. This
is why, in certain cases, just as a private corporation would, so
a state trading enterprise of this kind might be prompted to accept
a bargain which perhaps could not be construed as being a deal
dictated by a strictly commercial consideration.
Again, we might take. the example of a French refining company
-in
which buys oil from other corporations/which it may have, for instance,
a certain financial interest. Perhaps, in such a case, the French
refining corporation wouId be prompted not to buy at the lowest
possible price, but from another corporation in which it holds an
interest, so that the deal might prove profitable to both, and in
particular to the French corporation. In this case oil would be
perhaps bought, not at the lowest possible price, but for other
reasons which in the end would - as in the case of a private - 22 - E/PC/T/A/PV/14
In this case
corporation - prove beneficial to the company concerned../ We do
not want it to be objected to the company in question, that
because it is a state trading enterprise it should not be allowed
to do so, and should be compelled to buy at the lowest possible
price leaving aside all other considerations which might influence
its decision.
These are two examples which I think clarify the position.
Mr. J.J. DEUTSCH (Canada): Mr. Chairman, I am grateful to the
French delegate for stating in greater detail what he had in mind.
I agree with him, that the examples which he has giver do not
necessarily require the state enterprise to buy at the lowest price,
I do not think that commercial considerations should be defined in
such narrow terms. I do not think that "comercial considerations"
is intended to mean simply the lowest price. I think it means all
the considerations that might influence any commercial transaction,
and I think the case cited by the French delegate, in which he
:explains that there are other considerations than low price, are
perfectly legitimate,and I think any enterprise would take all these
things into account, and I certainly would agree myself that all
those considerations must be taker into account. We must not simply
interpret "commercial considerations"' as meaning lowest price.
The other point to which he referred was the case where the
company could prefer to buy in Swltzerland because of the possibility
of making payment in Switzerland, whereas there is no such possibility
elsewhere. It seems to me that the rules that should govern in that
case are ones that are to be laid down in the balance-of-payments
section of the Charter, and presumably this section would take care
of the situation, or should take care of it, if that is considered
desirable. I do not think the rules of state trading should
ER 23 - EC/PC/T/A/PV/14
include the provisions having to do with balance-of-payments
difficulties. It seems to me that the rules regarding balance-of-
payments difficulties should apply equally to state trading
enterprises as they do, to private enterprises, and what can be done
under the one, can be done under the other equally.
But we should not confuse the issue by having balance-of-payments
considerations in two places of the Charter. They should be dealt
with solely under the balance-of-payments provisions. E/PC/T/A/PV/14
CHAIRMAN (Interpretation): The Delegate of New Zealand,
Mr. L.C.WEBB (New Zealand): Mr.Chairman, I wanted to
raise a point in connection with the suggested change of title
which the United States Delegation has made. It is not merely
a point of wording. It is proposed to change the title from
"Non-discriminatory administration of State-trading enterprises"
to "Most-Favoured-Nation treatment by State-trading enterprises,"
It seems to me that the change gives a sort of precision
to the title which, in fact, is not present in the text, because
the text says: "... act in a manner consistent with the
principle of general Most-Favoured-Nation treatment which is
applied in Article 14 ...". In other words, we are not
precisely requiring Most-Favoured-Nation treatment by State-
trading enterprises; we are requiring State-trading enterprises
to act consistently with the principle of Most-Favourd-Nation
treatment.
I would suggest that possibly the best title for this
A rticle would be: "The administration of State-treading enter-
prises," and on that point I must confess that I find some
difficulty in discovering, for myself what exactly is meant by
the application of Most-Favoured-Nation treatment to
State-trading enterprises.
A minute ago there seemed to be some agreement here that
the term, commercial considerations, which is referred to in (u)
of the United States draft, does imply that State enterprise is
required to buy or sell at the bast price. But if that is the
case, is that altogether consistent with what generally
regard as Most-Favoured-Nation treatment?
There are one or two other points which I would make in
connection with the United Sates re-draft, which are perhaps
more a request for information than anything else.
S
-24 - S - 25 - E/PC/T/A/PV/14
I find the expression "such enterprise shall", and I
wonder whether that is a permissible wording, seeing that it
is not the enterprise which is the Member of the International
Trade Organization but the State concerned, and it seems to me
that it is necessary to go back to the original text and
refer to the Member concerned rather than to the enterprises
There is also a significant difference between the United
States text and the New York Draft, in that the United Stats
re-draft eliminates the last phrase of Paragraph 1 of article
31 of the New York Draft - 'having due regard to any differential
customs treatment maintained consistently with the other
provisions of this Charter,"
It seems to me that, having regard to the reasons which
led that phrase to be put in in the first place, it is
probably still necessary that it should remain there.
I would like also to associate the New Zealand Delegation
with what has been said against the inclusion of the words
"through public offers or bids." It is true that "or other-
wise" occurs, but it seems to me that the specific reference
to public offers or bids is inappropriate, and particularly
inappropriate when we come to consider the scale of operations
of many State enterprises.
I would finally agree with Dr. Augenthaler that we should
beware of attempting to legislate too precisely to meet the
case of State enterprises, not out of any feeling that State
enterprises should be put in a privileged position, but rather
from the fueling that the first essential of sound legislation
is that we should be thoroughly familiar with what we are
legislating about. S - 26 - E/PC/T/A/PV/14
I think it is true that most of the countries represented
here have had a somewhat limited experience of State trading
and therefore it is not easy to understand precisely the
natural of the problem with which we are dealing, and I think
Dr. Augenthaler has made very well the point that we may very
easily impose a greater degree of restriction on the activities
of State enterprises than we are imposing upon the activities
of private enterprises. L. - 27 - /A//Tlt/,,PV/14
CHAIRMAN (Interpretation): The delegate of the United
States.
N r. JOB W. EVANS (United States): I feel that several
points made by the New Zealand delegate should be answered. The
first matter raised was in connection with our prchosed diange in
the title of this ArtiWee. go do not feel atroll stmtngly about
the change, but we thought it was a logical change in view of our
redrafting of the Articlee in tho wey tee Axprcssion"most-favoured-
nation" was used. For our part we should be perfectly happy to
Go back to the title in the New York draft if it is preferable to
the other delegations
I 4o not believe that the wording proposed by the New Zealand
delegate would be avemmpro'rsent, because the strocture Of section
B now seems to bn one ii which two relajed sube cts are discussed;
the first is the question of the obligation of the most-favoured-
nation principle to the operofions Or State enterprises, and to
balance a similar principle in connection with privately owned
enterprises. The second is in article 32 an eftort Io balance
to some extent the obligatioe on thofpart cC some countries to
negotiate in connection with the expansion ef trado. Whatever titles
are used they should make clear theedieferonco between these two
conc3ptions.
With regare to ohp socand pnint raised, we difmake a change in
the wording in omihting toe words "haeine aud rcg rC. to such
differettialment,atr so ands-Iforth.Jt aslour be3ief.that that
wording was unnecessary as it was included coic the noept of commer-
cial consideratioes. Wo mro be w ang about that.
Another point made bewthe ao Zealernted dezto has b do with - 28 -
the use of the wording "such enterprise shall", instead of the words
originally proposed. Actually that is not as radical a change as
he seems to think, because in the New York draft the words "such
enterprise" were the subject of the second sentence. We would have
no objection to an effort to recast the paragraph in such a way that
the member becomes the subject of the obligation, but that would
require a number of other drafting changes.
The most important point and the one on which I feel much more
strongly than any of those I have mentioned so far, was made by the
New Zealand delegate who felt we might be going too far in legislat-
ing to cover the operations of State trading enterprises at a stage
when we do not know too much about those operations. In the first
place, I do not feel that the New York draft or our proposed amend-
ment did go very far towards legislating for the operation or State
enterprise, but it seems to us it went at least in the direction of
the balance which is absolutely essential to providing some means
whereby the members who have State trading enterprises can live up
to the same obligations which members who carry out their trade by
other means are going to observe. A number of delegates have
referred to what seems to them the imposition in this draft or more
rigid requirements than those applied by the Charter to private enter-
prises. That is based on a misunderstanding of one of the purposes
of section E:when we compare the obligations placed upon an individual
privately owned enterprise and the obligation placed on a State enter-
by
prise in this Chapter, we have/no means completed the comparison
which is operating - the comparison between the obligation of the
member who deals through private trading end the obligation of the
member who deals wholly or in part through State enterprises.
E/PC/T/A/PV/14
L J.
- 29 -
E/PC/T/A/PV/14
The Members who carry out their trade through private firms
will have accepted in Chapter V obligations with respect to the
negotiations on tariffs, obligations with respect to-quotas-which
are completely inapplicable in the case of a state enterprise,
because a similar undertaking by the Member carrying out its trade
through state enterprises would necessarily be meaningless, and
that is the reason why there must be rules in this section applied
to state enterprises which do not apply to private enterprises in
other parts of the Chapter.
I think that is all I have to say, Mr. Chairman.
CHAIRMAN: Dr. Holloway.
DR. J.E. HOLLOWAY (South Africa): Mr. Chairman, there are two
points involved in the drafting which might have the special
consideration of the Committee to which no doubt these Articles
will be referred.
I think on the whole it is probably an improvement to refer in
this Article, as the United States suggest, to Article 14. It
does, however, at the stage at which we are now, produce difficulties
of interpretation, difficulties of understanding where we are,
because it refers to measures which may be taken under Article 14;
article 14 again refers to measures which may be taken under
Article 15; and Article 15 again refers to measures which may be
taken under Article 24, so ne does not know just what the limits
of one's commitments are, and I would suggest that the Drafting
Committee might, before they deal with it in the manner suggested
by the United States which seems to have certain advantages, just
link up with what the Committee on Article 14 has done in the draft
to that Article. J.- 30 - E/PC/T/A/PV/14
The second point is likewise one of drafting,
one
but/in which the change of drafting may make a very considerable
change in substance. It is in paragraph 2 of the Article. In
the New York Draft, there would seem to be a mis-print somewhere,
because in line 2 we read 'purchases of imports", in the next line
purchases or imports", and lower down again "purchases or imports".
The Czechoslovkian amendment has eliminated the words "purchases or
imports", and the United States amendment has kept the words
"purchases or". It seems to me that the United States amendment,
dealing as it does with an Article dealing with the most-favoured-
nation treatment. (or, if we take the Now York Draft with non-
discrimination), is the correct one. I would like to draw
attention to the essential difference which comes in if we take
either the New York Draft or the Czechoslovakian amendment.
In both these cases we are departing, then, from the main
subject of this Chapter and I suggest that might also be considered
by the Committee which deals with the Article. G . - 31 - E/PC/T/A/PV/14.
CHAIRMAN: The Delegate of Norway.
Mr. OFTEDAL (Norway): Mr. Chairman, the Norwegian
Delegation finds the New York Draft of Articles 31 and 32
satisfactory, except may be for one point.
In paragraph 4 it is stated that due regard shall be had to
the fact that some monopolies are established, and operated
mainly for revenue purposes.
The Norwegian Delegation believe that this paragraph
should bc extended also to include monopolies of social,
cultural and humanitarian purposes, and we have proposed an
Amendment to that effect. What we have specially in mind is
the sale of alcohol or liquors. After the last war we had
just like the United States prohibition against the sale or
consumption of alcohol. This was given up when the sale of
alcohol was converted to a monopoly, which uses a price policy
as part of a regulatory machinery. This monopoly has worked
Very well, according to our opinion, and it has become an
integral part on the social welfare policy of the- Norwegian
Government, and the Nerwegian Government would be extremely
reluctant in changing this policy, which it considers very
successful
We believe that before that monopoly is established, both
these purposes should be excepted from the provision of
Article 32.
CHAIRMAN: The Delegate of Czechoslovakia.
Mr. AUGENTHALER (Czechoslovakia): Mr. Chairman, I have
the feeling that we are a good way on to reaching an agreement.
That our points of view are not so far away each from the
other's; and, of course, there are very important questions
which we have discussed, and I think that we would need two G. - 32 - E/PC/T/A/PV/14
hours to think that out, and that is why I would like to move
the closure of the Debate for to-day, just to afford the
Members the opportunity of reflecting on all that has been
spoken t o-day.
CHAIRMAN (Interpretation): I think, Gentlemen, that we
would have everything to gain by accepting the Czechoslovak
proposal, since it would afford him an opportunity of
consulting with his U.S. colleague with a view to presenting
a draft amendment.
CHAIRMAN: The Delegate of the United Kingdom.
Br. SHACKLE (United Kingdom): I would like to say this,
that the U.S. Amendment extends considerably beyond Article 31,
and I had some large Amendments to Article 32, and I cannot
help thinking that the Amendments to Article 32 are linked
with the others, and it may be desirable to consider Article
32 as well.
I feel, therefore, that it may be well to take in
Article 32 before we re-consider Article 31,
-32 - V. E/PC/T/A/PV/14
CHAIRMAN (Interpretation): May I ask a question of
Mr. Augenthaler? Does he intend in his new amendment to cover
only Article 31, or to cover also Article 32?
H.E. Dr. Z. AUGENTHALER (Czechoslovakia) (Interpretation):
Mr. Chairman, I only had in mind Article 31. I meant that
,rticle 32 should be discussed perhaps tomorrow or at some later
date.
CHAIRMAN (Interpretation): In that case, gen lemen, I think
we can adjourn the meeting now, it being understood that we will
take up tomorrow the new amendment which is to be presented by
Mr.Augenthaler and the representative of the United States, and
we will resume the discussion of Article 32.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I would like
to ask whether it would be possible to have an opportunity of
considering the new text beforehand? It is rather difficult to
discuss a text one sees for the first time at the meeting.
CHAIRMAN: (Interpretation): I have the same wish as yourself,
and it is just with a view to being able to receive the text before
the meeting that I am suggesting the adjournment of our meeting now.
The meeting stands adjourned.
(The meeting rose at 5.10 p.m.) |
GATT Library | cc153gw1695 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Fourteenth Meeting of the Tariff Agreement Committee Held on Tuesday, 9 September 1947, at 2.30 p.m. in the Palais Des Nations, Geneva | United Nations Economic and Social Council, September 9, 1947 | United Nations. Economic and Social Council | 09/09/1947 | official documents | E/PC/T/TAC/PV/14 and E/PC/T/TAC/PV/12-14 | https://exhibits.stanford.edu/gatt/catalog/cc153gw1695 | cc153gw1695_90260050.xml | GATT_155 | 14,898 | 90,104 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/TAC /PV/14
9 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT.
FOURTEENTH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON TUESDAY, 9 SEPTEMBER 1947, AT 2.30 P.M. IN
THE PALAIS DES NATIONS, GENEVA.
Hon. L.D. WILGRESS (Chairman) (Canada)
Deleates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247).
Delegates are reminded that the texts of interpretations, which do
not pretend to be authentic translations, are reproduced for
general guidance only; corrigenda to the texts of interpretations
cannot, therefore, be accepted.
NATIONS UNIES -2- E/PC/T/TAC/PV/14
CHAIRMAN: The Meeting is called to order.
We will resume our discussion of the General Agreement on
Tariffs and Trade by taking up Article XXV and the Articles
following.
On Article XXV - Withholding or withdrawal of Benefits - we
have a proposal by the Czechoslovak Delegation, which is given on
Page 7 of Document W/312, in which they propose an amended
wording for this Article.
Are there any comments on the Czechsolovak proposal?
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman, as far
as I can see, there is no substantial difference of meaning here
at all; the amendment is purely one of wording. As far as I can
see, it makes the passage resd rather more clearly. The only
point at issueis the substitution of the word "State " for the
word "Government." As Dr. ..::nthaler no longer feels strongly
about this, and as we have not in any case used the word "State"
bafore in this General Agreements I would like to suggest wo
retain the word "Government; " othrerwise I have no particular
remark to make.
CHAIRMAN: The Delegate of Czechoslovakia.
H. E. Mr. Z. AUGENTHALER (Czechoslovakia): . Mr. Chairman, as
we stated yesterday, we have no objection to the word "Government"
remaining.
Mr. J. M. LEDDY (United States): Mr. Chairman, there is one
substantial point in the suggestion; that is, the deletion of
the provision whereby it would be the contracting Committee which
would determine whether a particular contracting party had a
substantiel interest in the product concerned. We attech no
S
- 2 - S - 3 -E/PC/T/TAC/PV/14
particular importance to keeping that provision.
CHAIRMAN:Are there any other comments on the Czechoslovak
proposal?
Does the Czechoslovak Delegate attach importance to the
deletion of the words "the; Committee determines to have"?
H.E. Mr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
would prefer these words to be deleted, because as it stands now
it maans all the contracting parties. There is no question of an
Executive Board, as for the Charter. It is quite natural that
these contracting parties which are interested will come forward
and approach the other countries, so I do not see why there should
be special mention of the Committee.
CHAIRMAN: Are there any other comments on the Czechoslovak
proposal?
Does the Committee agree to accept the Czechsolovak proposal,
with the substiation of the word "Government" for the word "State"?
Dr. COOMBS (Australia): I just wanted to raise one question,
Mr. Chairman. In what way would it be done? How is the
Committee to determine whether the contracting parties have a
substantial interest in the matter?
C HAIRMAN: Would Mr. Augenthaler like to answer that
cuestion.
H.E. Mr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, as
the country would have the obligation to inform all contracting
parties, and would also have the obligation to enter into
negotiations upon request, it means That any interested country
would come forward. E/PC/T/TAC/PV/14
CHAIRMAN: Are there any other comments on this proposal?
I take it then thst the Czechoslovak proposal, with the
substitution of the word "Government" for the word "State", is
approved.
(Agreed) .
Article XXVI - Modification of Schedules. The United
Kingdom Delegation suggest that the word "Modificastion," in . the
title should be deleted and replaced by "Variation".
Mr. SHACKLE (United Kingdom): And, similarly, Mr. Chairman,
in the last line but two, where ,w suggest substituting the word
"vary" for "modify. " The word "modify" seems to us rather
inappropriate; it seems to suggest there should be a further
reduction, whereas this may be a change either way. '"Veriation"
can cover either increase or reduction, whereas "modification"
seems to us rather to mply reduction. That is the reason
why we suggested the change;.
CHAIRMAN: The Delegate of C ine.
Mr. D. Y. DAO (Chine): Mr. Chairman, there is just a
point on which I should like some clarification. May I refer
back to Article XXV?
CHAIRMAN: Yes, but -
Mr. D. Y. DAO (China): With reference to the words ''at
any time"; does this refer to any time after the entry into force
of the Agreement or any time after the provisional Application of the
Agreement?
CHAIRMAN: I think the words "at any time" -,-ply to any time
the A reement is in force, whether provisionally or definitively; that
is, a contracting party could withhold concessions from another
country Or withdraw con at any time it saw fit, even at the
aiving effectto provisional ap pliction
tlme of giving effect to provisional rpplication.
S P.
Mr. D.Y. DAO (China): Mr. Chairman, according, to the present
paper there will be an interval of about six months probably
between the provisional anpplication of the Agreement and the
definitive entry into force of The Agreement. It does not mean
that during, the six months any contracting party who has applied
provisionally can withdraw or withhold benefit?
CHAIRMAN: If a country has not become or ceases to be a
contracting party, then the countries which are applying the
Agreement, whether. provisionally or definitively, could withold or
withdraw concessions which they negotiated with that country . I
take it that that is the meaning, of that Article.
M.ROYEM (France) (Interpretation) Mr. Chairman, the remark
I want to make concerns only the French text, The words "which
has not become or has ceased to be, a contracting party" in the
English text have been translated into French by a sentence which
means "A government which has not in the following period adhered.
to the Agreement" and this provision then would seem to be covered,
not by the provisions of the Articles mentioned before, but by the
provisions of Article XXXI. Therefore I think we have to modify
the French text to put it into harmony with the English text.
CHAIRMAN: Due note will be taken of the remarks of the French
Delegate in preparing the French text.
Mr. Dorn.
Mr. H. DORN (Cuba): May I only ask one guestion. Does this
refer also to the time during which the Agreement is open to
signature? That I think is something which must be settled, be cause
there is a time in . which one part of the Governments, of the States,
have signed, and the Agreement is open for signature up to a fixed
date, and the question is whether in the meantime this right to
resort to withdrawal is legally possible. 6 E/PC/T/TAC/PV/14
CHAIRMAN: I think the meaning of the Article is quite clear
because it says "Any contracting party shall at any time be free to
withhold or to withdraw", so it does cover also the period when
the Agreement is open for signature.
The Delegate of the United States.
Mr. J.M. LEDDY (United States) I should like to suggest-
if the suggestion has not been already made and agreed to - that
we should have for this Agreement a Legal Drafting Committee, such
as we had in regard to the Charter, to go over it very carefully;
we could then refer to the Legal Drafting Committee such questions
as to whether the phrase in Article XXVI should be "'modification"
or "variation". I have some difficulty with the word "variation"
and I do not have any with "modification". It seems to me that
clearly means modifying in any way, and this was used in other
Articles of the Agreement, for instance in that dealing with
Emergency Action.
But I would like to stress the advisability now of agreeing
upon a Legal Drafting Committee, to which we could, perhaps, refer
some of these questions which we have just dealt with and which are
difficult for us to decide here.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I do not
want to press this suggestion to change "modify" to "vary". I
think it is a matter of the same words meaning different things to
different people. To me, "modify" implies that you have something
extreme; you tone it down and make it less extreme. That is
modification. To take something which is already moderate and
make it extreme is not, in my mind, modification. Still, that is
merely a question of taste, and I am not prepared to press my
suggestion. P. 7 EPC/T/TAC/PV/14
CHAIRMAN: I would like to say a few words with regard to
the suggestion of the United States Delegate to set up a Legal
Drafting Committee. It had been my intention to bring this
question before the Committee but I thought that the proper time to
do so would be when we had completed our second, reading of the
Draft Agreement and the Secretariat had then prepared a clean text.
I do not think there would be anything, for the Legal Drafting
Committee to work on until that stage had been reached. I would
therefore suggest that discussion on this question be left over to
another occasion.
The Delegate of the Lebanon.
M. Mouesa MOBARAK (Lebanon) (Interpretation): Mr. Chairman,
I am not competent to discuss the substitution of the word "vary"
for "modify", but I know that in French if, instead of "Modification"
we had 'changement' this would not be good French and anyway there is
a difference of meaning between those two words, I would like to
have the opinion of the French Delegation on this question.
M. ROYER (France) (Interpretation): Mr. Chairman, is seems
that the tendency within the United Nations is, when a draft is
"modified" in English to "modify" the French text accordingly, even
if the Frenoh word which is used after that is not the correct one.
And the only correct word in French which could appear in this
draft is the word "modification".
Also, I would beg the Secretariat to Change or to modify the
word in French which has been translated from "Schedules" in
English. The word in French appears to be "barème", but "barème"
is, in French, something corresponding to what is known in English
as "quick reckoning method" and therefore we prefer the word
"liste". P. 8 E/PC/T/TAC/PV//14
CHAIRMA.N: The Delegate of Norway.
Mr. J. MEKLANDER (Norway): Mr. Chairman, with regard to the
Legal Drafting Committee for this Agreement here, I agree that it
is too early for the Legal Drafting, Committee to start work, but I
suppose most of us hope to be able to go home on Sunday, and it
might perhaps be useful to consider the establishment of the
Committee so that the Members could be prepared to work rather
quickly and so that, when we come to the stage when we can let them
work., they can work immediately.
CHAIRMAN: It is because I wish to complete the consideration
of the General Agreement as quickly as possible that I wanted to
avoid a debate at this stage on the setting up of a Legal Drafting
Committee. Perhaps it might satisfy the Committee if we were to
approach the Tariff Negotiations Working Party to consider this
question and then they might be able to suggest the composition of
the Legal Drafting Committee, which would save us from having to go
into this matter in detail here.
The Delegate of Cuba.
Mr. H. DORN .(Cuba) Thank you so much, Mr. Chairman.
CHAIRMAN: Is that suggestion approved?
The Tariff Negotiations Working Party will therefore consider
this question their meeting tomorrow with a view to making their
report subsequently to the Committee.
The Delegate of the United Kingdom.
Mr. R.J. SHAKLE (United Kingdom): There is not very much
left for me to say, Mr. Chairman. I quite agree to the
suggestion about the Legal Drafting Committee. As to my amendment,
I have already "modified" it by withdrawing, it. P . E/PC/T/TAC/PV/14
CHAIRMAN: We hare another amendment of the United Kingdom
Delegation in which they suggest that the words "on or after
November 1, 1950" should be replaced by the words "after three
years from the date of provisional application of this Agreement".
The Czechoslovakian Delegation considers that mention of a date
should be avoided. 10
V E/PC/T/TAC/PV/14
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I presume
we shall need to name a period if we do not name a date, and
I take it that to say "three years from the date of provisional
application" is probably the right sort of sense. I suppose
if we definitely decide that provisional application is to take
place on 1st January, than 1st January 1951 is the date we would
name, but if it is preferred to say three years from the date of
provisional entry into force, that is what we suggested.
CHAIRMAN: I should like to point out to the United Kingdom
Delegate that there appears now to be some difficulty in
referring in the text of the General Agreement to provisional
application, as that is no longer part of the General Agreement.
It is going to be covered by a separate Protocol, and therefore
as we have more or less agreed that the date for provisional
application shall be January 1st, perhaps the simplest thing
would be to change the date November 1st to January 1st 1951.
Mr. R.J. SHACKLE (United Kingdom): Quite agreeable.
CHAIRMAN: The Delegate of Czechoslovakia.
Dr. Z. AUGENTHAIER (Czechoslovakia): Mr. Chairman, we
propose the deletion of the first words. We are an exporting
country and we are greatly interested in the stability of customs
duties and so on; but, on the other hand, we recognize that
today we are living in a world which is changing extremely
rapidly. We have been negotiating on certain presumptions
which may be entirely different in one year's time, so that is
why we wish to keep open the possibility of negotiations taking
place between the interested countries any moment they wish, even
before the date 1st November 1950. 11
V E/PC/T/TAC/PV/14
CHAIRMAN: The Czechoslovak Delegation has proposed the
deletion of the words "On or after January 1st 1951. Are there
any comments on this proposal?
Mr. E.L. RODRIGUES (Brazil): Mr. Chairman, I believe that
Article XVIII will give to any country
the possibility of avoiding the difficulty of which the Delegate
for Czechoslovakia has spoken. I believe that by using this
Article in such an emergency, there would be no necessity for
changing the date.
CHAIRMAN: Are there any other comments on the Czechoslovak
proposal?
Mr. J.M. LEDDY (United States): Mr. Chairman, it think
it would be preferable to keep this paragraph of this Agreement
intact during the first three years or its life, and I think
that the amendment proposed by the Delegation of Czechoslovakia
would be a rather serious one if the Committee should adopt the
amendment which has been put forward by the Delegation of
Australia, which would permit a country to withdraw the
concession if it failed to reach agreement.
In the circumstances which would confront many countries
during the next three years, I wonder if there is going to be
any real need to enter into tariff adjustments at the time that
Dr. Augenthaler mentioned. I should suspect that many of the
countries will, in any event, be influencing restrictions for
in
balance-of -payments reasons, and that/many countries, the tariff
will not be a substantial factor in trade. I should like
therefore to support the Delegate of Brazil in keeping the
paragraph as it is. E/PC/T/TAC/PV/14
CHAIRMAN: Are there any other comments? Are there any
other Delegates supporting the proposal of the Czechoslovak
Delegate? Then I take it that the sense of the Committee is
that the words "On or after January 1st 1951"should remain.
There is another proposal of the Czechoslovak Delegation,
which suggests the deletion of the words "...and subject to
consultation with the other contracting parties which the
Committee determines have a substantial interest in the trade
in the product concerned...".
Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, this
suggestion is the same as we made concerning Article XXV,
because we thought that whoever is interested will cry out loudly
enough. It is not necessary for the Committee to put some
nails on his chair!
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I think
that after the modification which was made in Article XXV, we
ought to modify Article XXVI on the same lines and adopt a
formula similar to that which we have now adopted for Article XXV.
In fact, if we were to support the words which the Czeohoslovak
Delegation suggests, then the Article would mean that the
modification could occur through bilateral agreement between the
two parties, and that the other Contracting Parties which have an
indirect interest would not be able to be heard. Therefore, I
think that we ought to adopt a formula similar to the one that
we have adopted for Article XXV and state that other Contracting
Parties, upon request, will be able to consult with the
Contracting Parties which have a substantial interest in the
product concerned.
V
12 E/PC/T/TAC/PV/14
CHAIRMAN:. Would that suggestion meet with the approval
of the Czechoslovak Delegate?
Mr. H. DORN (Cuba): May I only draw attention to the fact
that in this case the legal situation would be that when a
country thinks it has a substantial interest and is not
approached, Article XXI would have to be applied? I only
draw attention to the fact because I think you must know that
before you decide about the modification of the wording. In
order to avoid all these difficulties, the words "the Committee"
have been inserted. Without these words, the real situation
would be that the country which has a substantial interest and
is not approached would be entitled to invoke Article XXI. I think
that interpretation is correct.
CHAIRMAN: Are there any other comments on the proposal of
the Czechoslovak Delegation, as modified by the French Delegetion?
Mr. J.M. LEDDY (United States): I wonder whether a
solution could be found simply by deleting the words "which the
Committee determines" and changing the word "have" to having"?
There is a difference between Article XXVI and Article XXV.
Article XXV permits a country to take action first: in other
words to determine that a particular concession it negotiated
with a country which does not become a Contracting Party will
be withheld. In the case of Article XXVI, the intention is,
I think, that consultation shall precede the withdrawal of the
concession - that is to say, the modification of the concession.
The action will not be taken first and consultation later.
Therefore, I think that it would be better to adopt the
amendment as suggested.
V
13 14
CHAIRMAN: Are the Czechoslovak and French Delegations in
accord with the suggestion of the Delegate of the United States?
M. ROYER (France) (Interpretation): Mr. Chairman, could
the United States Delegate read out again the proposal he has
just made?
CHAIRMAN: It is to suppress the words "which the Committee
determines" and to change the word "have" to "having", so
that the sentence would read "and subject to consultation with
the other Contracting Parties having a substantial interest in
the trade in the product concerned".
Dr. H.C. COOMBS (Australia): Mr. Chairman, we would not
wish to see those words omitted. The purpose of this particular
part of the paragraph is to limit the right of other countries
to hold up or delay or prevent the withdrawal or modification of
the Sohedule between the countries with which they have been
negotiating. It is necessary to recognize that negotiations
are sometimes conducted with one country where a number of other
countries -perhaps one, or a larger number - have as substantial
an interest in the commodity as the country with whom the
negotiations were completed, and in our opinion, other
Contracting Parties who have a substantial interest are entitled
to be consulted before an item is withdrawn from the Schedule,
but we believe that that right should be limited to those
countries which have a substantial interest.
Now, in the absence of any method of determining finally
what countries have a substantial interest, the procedure involved
might be unduly protracted. It would be possible for any
country to claim that it has a right in any concession, with
E/PC/T/TC/PV/14
V E/PC/T/TAC/PV/14
whoever it was negotiated, because under the multilateral system
of recording the results of these negotiations, those concessions
are granted as a matter of right to all the participating
countries. Therefore, any country can claim that it has an
interest in any item in any Schedule, and if they wish to be
difficult, it would be possible for them to hold up a modification
of the Schedule by claiming an interest in a commodity, their
interest in which was exceedingly remote.
We were anxious , therefore, that there should be some
method of setting an end to the claims of so-called interested
parties, to prevent their holding up a concession of this sort,
and it seemed to us that the obvious thing to do was to give
the right of decision to the Contracting Parties, acting
together, so that if a country claimed an interest and the
country which had granted the concession did not think that that
interest was sufficiently significant to give the country the
right to be consulted, then it could be settled by majority vote
of the Committee and you could get on with the business. We
think it is important, therefore, that there should be in this
paragraph a way of determining whether, in fact, a country
claiming a substantial interest has an interest sufficiently
substantial for the purpose of this paragraph.
V 16 E/PC/T/TAC/PV/14
CHAIRMAN: The Delegate of India.
MR. B.N. ADARKAR (India): Mr. Chairman, it seems to us that,
in addition to the reasons just given by the Delegate for Australia,
there is one further reason why the words: "which the Committee
determines" should remain in Article XXVI.
The situation dealt with in this Article is very similar to
that dealt with in paragraph 3(a)of Article XVII, the Article which
deals with Adjustments in Connection with Economic Development.
Both these provisions deal with the procedure to be followed when a
Member wants to vary, or modify a negotiated tariff concession. In
one case, the variation is required for economic developmeont, and in
the other case it may be required for any other reason, and it seems
to us that it would be fair to prescribe an identical procedure for
these cases.
In paragraph3(a)ofArticle XVII, which lays down the procedure
by which a Member could secure relief from an obligation it has
incurred through negotiations with another Member, it has been
provided that the necessary consultations between the Contracting
Party and the other parties which would be substantially affected
would be sponsored and assisted by the Committee. That being so,
it follows that, so far as paragraph 3(a) is concerned, the
Committee which will sponsor the negotiations will obviously decide
which contracting parties would be substantially affected and which
would not, because the negotiations are intended to be sponsored by
the Committee. It seems to us to be appropriate that under
Article XXVI also it should be left to the Committee to decide which
countries have a substantial interest and which have not, because we E/PC/T/TAC/PV/14
believe that the procedure in the two cases should be identical.
We would also, by supporting the Australian Delegation on this
point, not like to support the further amendment which they have
suggested in document E/PC/T/W/326, because that would involve a
different procedure under Article XXVI as compared with the procedure
under Article XVII. We think that the procedure should be the
same, and if the Australian amendment in document E/PC/T/W/326 is
adopted for Article -XXVI, a similar amendment would have to be
made to article XVII.
CHAIRMAN: The Delegate of Belgium.
Mr. P. FORTHOMME (Belgium): (Interpretation): Mr. Chairman, I
should like to support the proposal made by the Australian
Delegation. In fact, the text which is now before us was
originated by our Delegation who wished, at the time, that the
Committee should sponsor multilateral consultation, while a change
should be brought to the joint schedules.
Therefore, we like the present text very much better because it
is more elastic, and we would like it to be maintained.
CHAIRMAN: The Delegate of Cuba.
MR. H. DORN (Cuba): May I only point out, Mr. Chairman, what
the difference between the two alternatives is. If we leave the
wording as it is, then the Committee has to determine right from the
beginning which are the countries having a substantial interest; if
we strike out these words, then the Committee has to determine too
in the case of doubt, because a country not approached, which believes
itself to have a substantial interest, is entitled on the basis of
17
J. J. 18 E/PC/T/TAC/PV/14
Article XXI to first approach the country which wants to change the
Schedule, and if the other country does not want to consult with it,
then the Committee decides. That means that the only difference
is that you have two stages of procedure instead of one stage of
procedure.
I only wanted to make that clear as it may, perhaps, influence
the decision.
CHAIRMAN: The Delegate of the United States.
MR. J.M. LEDDY (United States): Mr. Chairman, we are perfectly
satisfied with Article XXVI as it stands. The Delegate of Australia
has given some good reasons for keeping this procedure in whereby
the contracting parties acting together will determine what countries
should be parties to the negotiations for modification or withdrawal.
I recognise that it may involve some additional procedure, but,
on the other hand, it will avoid possible disputes, and I think that
that is a wise thing to do.
With regard to the provision for determination by the Committee,
I would say that,any country having a substantial interest in the
product, if that country asserts that it has a substantial interest,
then there is some danger that it may lead to disputes without this
provision for settling the matter in advance.
CHAIRMAN: The earlier part of the discussion of this
Czechoslovak proposal seemed to be in its favour, but the latter
part of the discussion has indicated that there are strong objections
on the part of certain Delegations to the adoption of the proposal,
and the trend of the discussion seems to be against it. J.
I would therefore suggest to the Czechoslovak Delegation that
we allow this text to stand as it is now, and we proceed to consider
the amendment submitted by the Australian Delegation to this Article.
The Australian proposal is given in document E/TAC/T/W/326,
which was circulated this morning. The Delegate of India has
already expressed his views Dr. this proposal, but I take it that the
Delegate of Australia would wish to comment on this proposed
amendment.
DR. H.C, COOMBS (Australia): Mr. Chairman, this addition to
the Article concerned is designed to make effective what we have
always been led to believe, that is, that the Agreements that we
enter into here have a time-limit of three years in respect of any
commodity which we bind.
If a country - and I think this is a point of very great
interest to the Indian Delegation and to any other Delegation
representing an under-developed country - agrees to bind an item in
its Tariff Schedule in one of these Agreements, it is binding it for
three years. Now, it is true that if it does not specifically take
action to unbind it it continues, but the obligation that we are
accepting here in respect of a tariff item is initially to bind the
item at the rates set out in the Schedule for three years, and we
want to make sure that, at the end of that three years when we have
fulfilled the obligations which we undertook, we are free without
accusation, without bad faith or without unduly complicated procedure
to exercise the right which we never gave up, that is, to unbind the
item after the expiration of the period for which we bound it.
19 That makes a very important distinction between the procedure
which the Delegate for India has referred to in relation to
Industrial Development Provisions. The provision in article XVII
which deals with Industrial Development was designed to deal with a
request by under-developed countries to unbind an item while it had
an obligation to bind it, that is, during the period for which it
had undertaken to bind the item.
Now, what we are concerned with is not that, but we are
concerned with making sure that, at the end of the period for which
we bound the item, we are free to do what we like with it without
difficulty, without charges of bad faith and without an unduly
complicated procedure and, furthermore, without the danger of the
whole of the Agreement which we entered into going down the drain.
So, Mr. Chairman, the first paragraph of this clause clearly
sets out your right to modify the Schedule, but it makes it subject
~~~~~~~~~~~~~~~
to agreement with the parties concerned. Now, we would wish, of
course that any change of this sort be made by agreement, because if
we wish to take an item out of our Schedule there clearly it is fair
and proper that the countries with whom we negotiate should be free
to make the corresponding changes in their Schedules in order to
restore tWe balance. .e arelnot seeking uniateral benefits in this
matter, but we would merely wish to exercise a right which we clearly
have, and we want to make it quite clear that if we choose to exercise
that right any country with whom we have negotiated itself is free
Jo modify its Schedngly,correspondixgyn but we want ary such exercise
to be limited to what is corresponding and not to be used in a punitive
way. E/PC/T/TAC/PV/14
It is quite clear that we can, under the first paragraph,
unbind an item after three years if the other countries
primarily concerned agree. We believe that in the majority of
cases there will be no difficulty. There might be a little
discussion about what would be the corresponding alteration in
the benefits accorded bythe other countries, but in the great
majority of cases it will be possible to reach an amicable solution.
But we cannot put ourselves in the position in which the other
country is unwilling to reciprocate and in which a freedom which
we have never given up can be taken away from us.
We want to put in a subsequent paragraph which says that,
if agreement is not possible after consultation has taken place,
we are then free to take the item out of the schedule and do
whet we like with it, but, in so doing, we recognize we must
free the other parties to act in the same way. Our suggestion
is subject only to the Committee agreeing that the action which
they take is roughly corresponding to the cause which it is
designed to meet.
So, under this procedure, Mr. Chairman, the first action
would be consultation with a view to agreement between the parties
primarily concerned, by which we would take out of the schedule
the items which correspond to such concessions as the other
parties have made to us which we can agree appear to be
reasonable. If we cannot reach such agreement, then we take
out the items anyway. Than the other parties take what action
appears reasonable to them.
I think our amendment is perfectly reasonable and I think
the Delegaté for India will agree with me that it is a
substanitally different situation from a request to modify a schedule
during the period for which the schedule was originally bound.
S
21. S
CHAIRMAN: The Delegate of India.
Mr.- B. N. ADARKAR (India): Mr. Chairman, I thank the
Delegate of Australia for the explanation he has given. Our
objection arose from the fact that in Article XVII no time limit
has been prescribed; in other words, that Article continues to
be imposed during the lifetime of the Trade Agreement. If,
however, it is understood that Article XVII is subject to the
provisions of Article XXVI that is to say, if the procedure
laid down in Article XXVI will apply whether the modification
of schedules is desired for purposes of economic development or
for any other reason - if that understanding is clearly
recognized by the Committee then we will be quite prepared to
accept the amendment proposed by the Australian Delegation.
CHAIRMAN: The Delegate of France,
M. ROYER (France)(Interpretation): Mr. Chairman, I fully
recognize the value of the arguments just put forward by the
Delegate of Australia, but I do not think the solution which
he proposes for this problem is quite in agreement with the
spirit of the Charter. .
I secme to mc that the work we have done could be easily
compared to knittin,, andl if we pulw the tooneat n n end, then
all the knitting will come to pieces. For instance; if
Countr w'B' -.ithdraws the concessi na it.hes made to Country
'a' bscouse C untry 'A' has withdrawn the same concessionn, theo
other parties who are interested, not in the concesgionse-rantzd
to Country 'A', but in the concessions granted to CouB'ry '3
will, in their turn, withdrew th6 concessions which thee havo
themselves granaed, end nothing will remain ofAthee,grerment.
22
7/PAT/T.i/PV/14 S E/PC/T/TAC/PV/14
As I have said, I can quite well see the value of the
Australian Delegate's arguments, but I wonder if we could not
find a solution which would be different from the one he
proposes. We could, I think, find a solution in the provisions
of Paragraph 4 of Article II, which state that if a country
withdraws concessions, it ought to offer concessions for an
equivalent amount on another item, for instance. Therefore the
balance of the concessions made and granted by the countries would
not be disturbed and we could thereby maintain the minimum of
concessions which appear in the present Agreement.
There is another point which is troubling me. This
Agreement will be signied for a period of three years, but we
hope that in three years' the another step will be taken towards
the reduction of trade barriers, because we do not really think
that whet we have achieved here is an eternal solution for the
reduction of trade barriers. But we have provided nothing for
this eventuality and there is nothing in the Agreemant which would
enable a now Agreement to be signed or this Agreement to be
improved without denouncing the present Agreement.
I think we ought, to provide here for a provision stating
that nothin in the present Agreement precludes the contracting
parties from entering into a new Agreement with the other contracting
parties, or, as the case is stated here, to deterisate the
situation prevailing at the time, but on the contrary, to improve
the conditions prevailing at the time. Therefore we think the
present Article should be completed by such a provision.
CHAIRMAN: The Delegate of the United States.
Mr. J. M. LEDDY (United.States) Mr. Chairman, I have not
had an opportunity of consulting my Delegation on this amendment,
which was circulated this morning, and Iwould like to do so
up
before we take/ a position on it. 24
S E/PC/T/TAC/PV/14
I should say that it is a rather serious amendment. It
materially affects the stability of the Agreement and it does,
I believe, go somewhat further then it has been usual to go in
bilateral agreements in the past. Under bilateral agreements
the usual practice, I think, is to make the Agreement subject to
determination at six months' notice, or some short notice after
the initial period, but not to permit the withdrawal of
individual items.
0n the other hand, the determination of a bilateral
agreement is a much less serious thing than determination or
withdrawal from an Agreement of this size, covering, in the case
of some countries, many hundreds of items, and I think there
may be need for more flexibility then we now have in Article
Without coming to any decision on the matter at present,
I Wondered whether, perhaps, a suggestion along the lines of that
put forward by the French Delegate would not be a better one. 25
P . E/PC /T/TAC/PV/14
CHAIRMAN: The Delegate of Norway.
Mr. J. MELANDER (Norway) Mr. Chairman, I read the
Australian proposal as a means of, so to say, establishing a
compromise method as between the one laid down in Article XXVI and
the one laid down in Article XXVIII. Article XXVIII says that
on or after 1 November 1950 any party can withdraw completely on
six months' notice. Now the reason why we have article XXVI
relating to Modification of Schedules is, of course, to provide
for a possibility of not going to the drastic step of completely
withdrawing. The amendment proposed by the Australian Delegation
to my mind is an attempt, to make Article XXVI more flexible in
order to prevent parties, in case they do not agree, in accordance
with Article XXVI, from then taking the rather drastic step of
withdrawing completely.
If that is the reason, and I think that is the way in which
it must be interpreted, I would not consider it as being contrary
to the spirit of the Agreement. I would say it would be in
conformity with the spirit of the Agreement. If one is allowed
to withdraw completely, and then of course be in a position of
starting fresh negotiations at scratch, I think it would be useful
to have a provision for not going to that drastic step.
Consequently, I feel that the Australian proposal is reasonable,
and I would support it in principle. I do not deny that there
might be some minor change in the text, but in principle I think
the amendment is sound.
CHAIRMAN: The Delegate of Australia.
Dr. H.C. COOMBS (Australia): Mr. Chairman, I think the
Delegate of Norway has given part of the answer which I wanted to
give. The proposal certainly in my opinion is not in any conflict 26
with the general spirit of the Agreement; in fact it does seem to
be a very necessary one if the spirit of the Agreement is to be
observed.
As regards the Delegate of France's homely analogy, it does
seem to me there are time when unwinding a bit of knitting is a
good idea. If the pullover no longer fits, it is quite a good
idea to unwind it and knit it again so that it does fit. And
that is precisely the type of situation which this provision is
intended to cover. That is, it may be perfectly reasonable for a
country to accept a binding of certain items now, but in a few
years time when its industrial developments have gone a little
further, the lines may have changed and it may well want to shift
the balance of its activities and change the direction of its
protectionist policy, and in those circumstances it seems to me
perfectly proper that it should be able to take advantage of a
right which it has not given up, that is a right to unbind an item
after the period for which it has agreed to bind it.
That does not mean to suggest, as the Delegate of France
appears to consider, that we will go on progressively reducing the
scope of the Schedules. On the contrary, we hane never assumed
that they were the last tariff negotiations which would take place
between the countries here present and other countries. We have
assumed that it would be a continuing procedure. We hope there
will be a bit of a gap here and there so that we can spend so me
time at home. But we did anticipate that tariff negotiations
would in the future be a standard part of the procedure of the ITO
and that, as a result of those negotiations, there would be a
continually changing pattern in the Schedules; so that it would be
perfectly possible that a country which had hold out certain items
for negotiation during the period in which it was important to get
the industry concerned established, would subsequently be ready to 27
unbind or reduce tariffs on that item.
So there is no reason to assume, merely because you permit a
country to withdraw an item at the end of the period for which it
has bound it, that you are freezing the content of the Schedules
with the exception of the item you have withdrawn from it. On
the contrary.
If, however, the Delegate of France considers it necessary to
make any specific provision in the Agreement for now negotiations
some time in the future, we would have no objection, though we
under tand it is perfectly well catered for in the Charter at
present. Any country is at liberty to negotiate if it is invited
to do so. Therefore it seems to me there is ample provision for
new negotiations and extension of the content of the Schedules as
well as for the change in their content in the way in which we
suggest.
And, further, Mr. Chairman, I want to emphasise the point I
started with: that is that we have been told here and we have
been negotiating on the basis of the fact that any binding we
undertook was a binding for three years. We do not think it
reasonable that we would have to withdrew from the Agreement merely
becausa we want to exercise a right on one item. In other words,
what we are asking, for here is to make specific a right which I
think every one of us understood we all possessed. If we cannot
have such a provision, not necessarily in the words I have
suggested but a provision along those lines, then, to extend the
Delegate of France's metaphor a bit further, we can only conclude
that somebody has been pulling the wool over our eyes. 28 E/PC/T/TAC /PV/14
CHAIRMAN: The Delegate of Belgium.
M. Pierre FORTHOMME (Belgium) Mr. Chairman, it seems to me
that the Australian amendment in fact just states that no-one can
be forced to maintain a concession beyond the date of the initial
engagement if the party wishing to withdraw the concession is
willing to forego theadvantages it received for having given that
concession. I have some doubt as to the necessity of making that
statement. It seems to me that this principle is already in the
text of Article XXVI and that to spell it out is to sound and to
be unduly pessimistic.
It seems to me that the fault of this amendment is that it
presupposes that in three years time we will all be eager to do just
one thing and that is to withdraw concessions we have given as
quickly as we can and as many of them as we can.
Secondly, it seems also to presuppose that any attempt to
withdraw a concession will meet with unrelenting and unreasonable
opposition.
I do not think it will be so. I do think that if negotiations
are open with the other contracting party and if the party wishing
to withdraw a concession makes it very clear from the outset that
it intends to withdraw this concession because it judges it is a
vital interest for it to do so, then other countries will then
confine their negotiations to either trying to obtain a compensating
advantage or, if no compensating advantage can be obtained, to
determining which of their own concessions they will withdraw as an
equivalent of the advantage they are losing. In these conditions
I think that it would not happen that a proposal to withdraw one or
two or a few concessions of vital interest to a country would meet
with unreasonable opposition from the other countries. 29
P. E/PC /T/TAC /PV/14
The only cases where a deadlock in the negotiations would
occur would be if the amount of the proposed withdrawals was so
considerable as to imperil the whole plan and structure of the
Agreement. At that time we would find ourselves confronted by a
lack of will to continue and we would probably see the whole
Agreement fall to pieces; and I do not thing either the introduction
of this amendment or the lack of it would prevent the agreement
falling to pieces if the will to maintain it in force were absent.
But as long as the will to maintain the Agreement is existent, I am
perfectly certain that, with the present text, it would be possible
for any country to withdraw any concession which is of vital
interest to it. 30
CHAIRMAN: The Delegate of Syria.
M. Hassan JABBARA (Syria ) (Interpretation): Mr. Chairman,
the Agreement and the tariff negotiations which are part of the
Agreement are valid for three years. After a period of three
years, the States concerned may wish to be free again or to
maintain the Agreement in force. Article XVII provides for
modifications of the Agreement during the period of application
of the Agreement, if the economic conditions of the country
requesting a change warrant such a modification of the Agreement.
Article XXI provides also for adjustment in case of the
default of one of the Contracting Parties during the period of
application of the Agreement; but what the Agreement does not
provide for is an examination. Once the period of three
years has elapsed, there should be an examination of the general
situation, to consider the results of the Agreement during
this three-year period and to start new negotiations taking
into account the benefit of three years' experience and also
considering the conditions prevailing in the countries taking
part in the Agreement at that time.
I would suggest, therefore, that Article XXVI be modified
to include such a provision, stating that after three years,
new negotiations will take place and that in these negotiations
the modifications in the condition of the Contracting Parties
will be taken into account,and that the tariff negotiations
will be reviewed and readjusted in the light of the conditions
prevailing at the time. Such a provision would, in my opinion,
avoid a country taking such a drastic step as is provided for
in Article XXVIII, and therefore, after negotiation with the
other interested party, a country will be able to say whether
it determines to stay within the framework of the Agreement or
E/PC/T/TAC/PV/14 /Il Al V 31 E/PC/T/TAC/PV/14
to withdraw from the Agreement.
CHAIRMAN: The Delegate of Czechoslovakia.
Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, in
principle I would like to support the opinion of the Australian
Delegation, because I think that it is wise and that it
corresponds to the realities of life. As the Agreement stands,
it would mean that if any country would like to withdraw some
concession the country concerned (I am speaking only of after
1950) would either have to quit entirely, or set in motion
a general customs war. In this case, I think the role of
the substantially interested countries would be the role of
the Irishman who, seeing some men fighting in the street,
asked "Is this a private fight or can anyone join in?"
Well, as to the third or, as we call them, substantially
interested countries, they paid for certain concessions, and
I suppose that the negotiations were equitable. If I
negotiated with Country A, I gave certain concessions and I got
concessions and there should be equity in those concessions.
The same applies to Country B. Now, if I withdraw a concession
from Country A, I agree that Country A should be entitled to
withdraw his concession too; but I do not see why Countries
B, C and D should withdraw their concessions, because they did
not pay for the concession I gave to Country A.
To arrive at a just solution, I would suggest that instead
of "provided that the Contracting Party having a substantial
interest" we put "provided that the Contracting Party wvith which
such treatment was negotiated". This would stop the further
withdrawal of concessions. No customs war would be set in 32
V E/PC/T/TAC/PV/14
motion, and the third substantially interested parties would
be free to negotiate with the country withdrawing the concession,
on the assumption that they are willing to give to this country
some concession, because otherwise there would be no equilibrium
in the concessions.
CHAIRMAN: The Delegate of the United States.
Mr. J.M. LEDDY (United States): Mr. Chairman, I think
there is truth in what has boon said by the Delegate of Australia
and the Delegate of France, and I was wondering if we could not,
in some way, put their two suggestions together and perhaps
arrive at a solution.
What I had in mind was that we might perhaps add to the
existing text a provision that in the negotiations the
Contracting Parties concerned could endeavour to maintain a
general level of mutually advantageous concessions which would
not, on the whole, be less favourable to trade than those provided
for in the Agreement now, and then go on to say that if, however,
agreement, cannot be reached, the country desiring to withdraw an
item from the Agreement may do so and the other country may
suspend equivalent concessions. I think that would keep before
us the objectives of the Charter to achieve a substantial
reduction of tariffs, and, at the same time, permit the necessary
flexibility for withdrawing individual items as an alternative
to complete withdrawal from the Agreement.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R..J. SHACKLE (United Kingdom): It seems to me that
Mr. Leddy has suggested a possible happy solution, and I would
like to suggest that it be carefully gone into. E/PC/T/TAC/PV/14
CHAIRMAN: The Delegate of Cuba.
Mr. H. DORN (Cuba): Mr. Chairman, I would also be grateful
to have again the text of the proposal made by the United States
Delegate, because I think that there are two very valuable ideas
contained in this proposal. If we change the words "having a
substantial interest", I think that we have to take into account-
and that was the real reason of the proposal made by the
Australian Delegation--the multilateral character of the
negotiations, because I think that a country will have taken into
accout not only the direct concessioins made in the negotiations
with the other country, but also the indirect concessions made
by the same country to third countries. Therefore, I think that
if there is a change in the Schedule, then the countries which
made concessions based on the concessions which the other party
gave to a third country, have to ask if the equilibrium is
maintained or not in relation to the country which withdraws
the concession, or if there is anything to be done in order to
re-establish the equilibrium. But I think that this point
may be cleared up easily, and that we cannot only limit the
action to the country directly negotiating the product in
question. This last point can, I think, also be taken up in
the proposal made by the United States Delegate and,therefore,
I think it would be very useful to have his wording before us
in order to decide about the Australian Delegate's proposal.
CHAIRMAN: The Delegate of Australia.
,
Dr. H.C. COOMBS Alustralia): Mr. Chairman, if I understood
the United Staecs Delegate's suggestion properly, it would
mean that in the first instance, the country wishing towiwthdraw
i V 34 E/PC/T/TAC/PV/15
an item would seek to restore the balance by adding an al ternative
concession rather than asking its opposite number to withdraw,
and we would agree heartily that that would be a desirable
procedure, and I think that the deletion of some words of the
Rind suggested by the United States Delegate would probably me et
the situation, provided that the provision which we suggested
to the same effect followed on, to make it clear that if a
deadlock did occur, it could be resolved.
I would like to emphasize, in view of what the Belgian
Delegate said, that we are not anticipating such deadlocks in
fact, we do not expect that they will ever occur; but we think
it is bad constitutional practice not to provide for the
pesuibility of deadlocks, and for their being resolved. I think,
Mr. Chairman, that a solution to this problem can be found along
the lines suggested by the United States Delegate, 35
J. E/PC/T/TAC/PV/14
CHAIRMAN: It seems that we are on the road to attaining
agreement on this question. What is necessary is that there should
be further explanation of the various ideas which have been put
forward at this meeting. Therefore, I think that the best procedure
would be to set up an ad hoc sub-committee to consider the question,
I should like to know if the Committee is agreeable to this proposal.
Are there any objections to the setting us of a sub-committee?
I would therefore propose that the following Delegations should
comprise an ad hoc sub-committee to give further consideration to the
Australian amendment in the light of the discussion which has taken
place at this meeting:- The Delegations of Australia, Belgium,
Czechoslovakia, France, India, Norway and the United States. I
would like to nominate the Delegate of India as Chairman of this
sub-committee, the sub-committee to meet tomorrow morning at 10.30.
Are there any comments?
The proposal to set up a sub-committee is approved.
We now pass on to Article XXVII - "Amendments". We have the
amendment of the Australian Delegation, which is given in document
E/PC/T/TAC/323. providing for a new text to replace paragraph 1. At
the same time, we might give consideration to the proposal of the
United Kingdom Delegation that paragraph 1 could be detached from the
rest of the Article and made into a new Article with the title:
"Suspension and Supersession".
MB. R.J. SHACKLE (United Kingdom): Mr. Chairman, our amendment
is obviously not one of substance at all, it is purely a matter of
arrangement.
Our feeling is that the first paragraph, which deals with
supersession by the Charter, is quite a distinct matter from the other. E/PC//T/TAC/2V/14
miscellaneous amendments which might be thought desirable in this
Agreement, and we feel that that justifies having two separate
Articles.
We would propose that paragraph I should be kept in one Article
with the title: "Suspension and Supersession", while the remaining
paragraphs should be a new Article headed "Amendments". That
involves one consequential amendment, namely that in the second line
of paragraph 2, after the words "provisions of this Article", one
would add "or of article XXVII".
As I say, this is not an amendment of substance, it is purely
a matter of arrangement and clarity.
CHAIRMAN: Are there any objections to the proposal of the
United Kingdom Delegation?
There being no objection; we can take it that the proposal of
the United Kingdom Delegation is approved.
We can now pass to the consideration of the draft amendment
submitted by the Australian Delegation for the revised text of
paragraph 1.
Are there any comments on the Australian proposal set forth in
document E/PC/T/T/W/323.
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, I must
confess that there is one point on which I have some doubts, although
I think we entirely agree with the general scheme of this suggested
Article.
We have certain doubts about the opening words of paragraph 2.
You will see that in the General agreement it says that if there is
an objection by a contracting party then there is to be consultations
between the contracting parties, but the opening words of paragraph 2
J. 37
J .E/PC /T/TAC/PV/14
say that that meeting with the contracting parties shall only happen
within the sixty days after the necessary 20 ratifications, which
are required to bring the Charter into force,have already been
deposited. Well, by the time that that has happened the situation
would, so to speak, be no longer fluid, and the judgement of the
contracting parties would be lessened.
It does seem to me that that may have a number of awkward
consequences and, amongest others, it may have the effect of delaying
the ratification of the Charter, because it may well happen that a
contracting party may have certain doubts about the changes that
have been made and it may wish to get the views of other contracting
parties. Having done that, it would be in a position to decide
what it would do about ratification, whereas, if there had been no
such discussion, it may feel thai the wisest plan would just be to
sit back and wait and see what other countries do, and if you get a
lot of countries doing that it may mean that the Charter will not
come into force, or that its entry into force will be quite
considerablly delayed.
For that and other similar reasons, my feeling is that it is
not advisable to prescribe that this meeting shall be delayed until
the ratification of the Charter has come in. I suggest that we
should say-something like this:. First of all, you have the sixty
days within which the objection has to be made; then, within a
further sixty days there shoul be a meeting of the contracting
parties to discuss the situation, and I think one might possibly wind
up by saying that in any event there shall be a meeting within the
sixty days after the 20 ratifications have been deposited, and that
at that meeting some unanimous or definite decision will have to be
reached. That is rather the scheme that I would suggest. J. E/PC/T/TAC/PV/14
The provision leaves over the meeting until the 20 ratifications
have already been deposited, when it necessarily follows that the
Charter will come into force. It may have some very unintended
consequences, I think.
I would just like to make a small suggestion as to a draft
which, I think, would give effect to my point. The first paragraph
would consist of some such words as this: "Thereupon within
sixty days following the notification of the objections the
contracting parties shall meet to consider the situation" and you
will then add, at the beginning of paragraph 2, which would otherwise
remain as it is "In any case, this objection has been raised under
paragraph 1" and then go on as before with "within the sixty days
days..... etc.". The effect therefore, would be that, if there is
an objection,there would be a meeting of the contracting parties
within two months to consider the situation but, in any case, if the
matter has not been cleared up in that way then there will have to
be a meeting after the 20 ratifications have been deposited to come
to some definite decision. That would be my suggestion.
CHAIRMAN: Are there any other comments?
The Delegate of New Zealand.
MR. L.C. WEBB (New Zealand): Mr. Chairman, I just wanted to
raise a point of procedure, which I think possibly is not really
important, that is, you say the Australian amendment says any
contracting party may object. Now, it seems to me that two
questions arise there. The first is to whom does the contracting
party object? where does it lodge its objection? The second
question is, when an objection has been lodged, to whom is the
objection circulated? I would assume that it would be circulated
38 39
J. E/PC/T/TAC/PV/14
to the countries which are signatories of the Final Act, but I
would like those points cleared up because it seems to me that it
is desirable if this amendment is adopted, to change or give that
part of it a greater precision.
This also, to my mind, raises a question which arises in
connection with many of the Articles of the General Agreement, and
it is a question which it may not be appropriate to raise at this
moment, but it is simply this: that the General Agreement has
imposed upon the contracting parties a whole series of highly
important duties which are, in effect, the duties - or correspond
to the duties - which will be discharged by the Organization under
the Charter, and yet there is no provision for regular meetings of
the contracting parties. 40
S E/PC/T/TAC/PV/14
We do not know who summons the meetings. What is more important:
it would appear that no provision has been made for any sort of
Secretariat and I find some difficulty in envisaging how a
Secratariat would be provided.
As I say, I do not know whether this is the appropriate
place to raise this particular question, but I feel it is a
matter which we shall have to consider at some time in these
deliberations on the General Agreement.
is
CHAIRMAN : This question/really covered by Article XXIII,
which we considered the other day, and during the course of our
discussion the United States Delegation agreed to submit a
re-draft of this Article in the light of the general agreement
which had been reached in the Committee to replace the word
"Committee" by the words "contracting parties."
If the Delegate of New Zealand will refer to Aticle XXIII
he will see that in Paragraph 2 the position is met, by saying:
"The Secretary General of the United Nations is hereby requested
to convene the first meeting of the contracting parties." No
at
doubt that first meeting the contracting parties will take
whatever steps are needed to settle such questions as future pro-
cedure, Secretariat, and such other arrangements which may be
necessary for them to carry out their functions during the very
short time in which it is envisaged that it is necessary for
joint action to be taken by the contracting parties, because in
Paragraph 7 of Article XXIII provision is made that as soon as
the International Trade Organization has been established and is
capable of exercising its functions, the contracting parties
may discontinue the meetings provided for in Article XXIII and
may transfer to the Organization the function of giving effect
/ _ 1 - - '- 1 .s S 41 E/PC/T/TAC/PV/14
to the provisions of the Agreement. In other words, once the
Organization is in being, the Tariff Committee considers it will
be the Organization which will undertake those functions.
The Delegate of Chile
Mr. F. GARICA OLDINI (Chile)(Interpretation): Mr.
Chairman, I Acar that the Australian amendment would only lead
to the result that you would never be able to replace the Articles
of the Agreement by the Articles of the Charter once the Charter
is adopted, and I do not see how this agreement will function
if the substitution of these Articles is impossible.
I think the remarks made by the New Zealand Delegate are
quite pertinent ones and that one would be, in fact, creating
a second small organization at the side of the ITO. If we
request here unanimous agreement for the substitution by the
Articles of the Charter for the Articles of the Agreement, it
may be a very elegant way, but indeed a roundabout way, of
introducing the right of vote, The veto was eliminated in
the Economic and Social Council, but here we are introducing
this right of vote within the Committee, except of course, that
the Committee is not called a Committee any more, but is only
called "the joint action of the contracting parties,"
and the word "vote" is obviously not mentioned.
But if it only requires one voice to prevent the
substitution, then I think we will have, to all eternity, the
Articles of the Agreement and not the Articles of the Charter
in Part II. Therefore it seems to me it would be more logical
to follow the suggestion of the New Zeland Delegate and provide
for a Secretariat, maybe a budget, and maybe other things also,
so that we can have the Agreement functioning properly. 42 E/PC/T/TAC/PV/l4
I would like to state now that the Chilean Delegation
cannot accept the text of this amendment, and I wonder if all
the Delegations here are ready to accept such a text,
It seems to me it is only logical that the text which we
adopt should, on the other hand, be in accordance and in harmony
with the purposes for which we gathered here. I believe those
purposes can only be met if we adopt the principle of automatic
substitution. Any other device might be very ingenious, very
clever, but it could only load to the result that the Articles
of the Agreement will never be replaced by the Articles of the
Charter. Therefore, Mr. Chairman, if the interpretation I
have given is the correct one, the Delegation of Chile will never
be able to accept this amendment.
CHAIRMAN: The Delegate of India.
Mr. B. N. ADARKAR (India): Mr. Chairman, we have to con-
sider, under this Article three types of amendment. It has
been suggested by the Tariff Negotiations Working Party that
amendments to Part I of this Agreement should be effective only
by the unanimous consent of all the parties. The Indian
Delegation would be quite prepared to accept that decision.
Another type of amendment would be to go forward with the
replacement of Part II of the Agreement by the Articles of the
Charter, and the third type of amendment would be all other
amendments which do not conform to the description of the first
two types of amendment.
As regards the replacement of Part II by the provisions of
the Charter, that is an amendment which requires special treatment
for two reasons: in the first place, Part II involves obligations
which are substantially different in nature from the obligations 43
S E/PC/T/TAC/PV/ 14
involved in tariff concessions. Secondly, tariff concessions
cannot be withdrawn except by unaimous consent, but, so far as the
obligations laid down in Part II are concerned, they raise wider
issues of commercial policy and therefore unanimous consent should
not be required in respect of those obligations.
Moreover, by the time the replacement question would arise,
something may have become known about the fate of the Charter.
If the ITO Charter is adopted a.t the World Conference, and if the
contracting parties accept the ITO Charter by joining the ITO,
then presumably they should have no objection to the replacement of
Part II by the Charter. Therefore a somewhat easier procedure
should be adopted, so far as the replacement of Part II be the
Charter is concerned, than the procedure indicated for changes in
Part I of changes in the tariff concessions.
We thought the Australian Delegation was in favour of
providing for a simpler procedure for replacement of Part II by
the Charter and we would therefore like to be sure that the amend-
ment suggested by them is consistent with their intention.
It seems to us, on reading this amendment - and I speak
subject to correction - that if any of the contracting parties
objects to any provision of Part II being replaced by the
corresponding provision of the Charter, and if such a contracting
party maintains the objection throughout the deliberations which
will follow, the replacement cannot come about: that is to say,
that any of the contracting parties can exercise a veto on the
replacement.
If that is the intention, the result is that the procedure
suggested by the Australian Delegation would make replacement far
more difficult than the procedure suggested by the Tariff Negotiations
Working Party, and that is a position which we consider to be most S E/PC/T/TAC/PV/14
inconvenient. It would place the country objecting to replacement
in a more favourable position than the country which desires the
replacement. A country which wants the existing provisions to be
maintained can maintain its objection throughout and thus block
the replacement.
On the other hand, a country which wants replacement has
only one alternative, namely, to withdraw from the Agreement.
That alternative is open to it only if the country has not given
definitive application to the General Agreement, but such a
country will not know whether or not replacement is going to
come about until 60 days have elapsed after the ITO Charter
comes into force; therefore a country which wishes Part II to
be replaced by the Charter will have to delay its definitive
application of the General Agreement until 60 days have elapsed
and until further consultations have taken place. That places a
country which wants the replacement to come about in a less
favourable position than the country which is objecting to the
replacement by the Charter.
Secondly, it is this Article of Amendment which will
determine the relation between the General Agreement and the
ITO Charter. Anything is said in the Australian amnendment as to
whether contracting parties will or will not join the ITO Charter.
If it is to be understood from the terms of the Australian
amendment that Part II will be suspended and superseded by all
the provisions of the Charter, then we have to provide for a
situation in which a contracting party may be prepared to accept
all the provisions of the Charter which is eventually adopted
which correspond to the provisions at present included in Part
II but may have difficulty in accepting other provisions of the
Charter and may, for that reason, have to keep out of the ITO. 45
In such a situation I do not understand what will happen. If
any of the contracting parties fails to join the ITO, not because
it has any difficulty in accepting either Part II of the General
greement or the corresponding provisions of the Charter which will
be eventually adopted, but because it has difficulty in regard to
other provisions, is it to be understood that such a country will
be forced to withdraw from the Agreement? I do not know what the
answer is, but we should like to have clarification on the point.
This difficulty does not arise in the original draft, which
states that the question of supersession of Part II of the ITO
Charter will not arise unless all the contracting parties have
become members of the International Trade Organization. If any of
the contracting parties does not join the ITO then the replacement
will come about by the process of amendment, indicated in paragraph
2 of Article XXVII. We would therefore like to have clarification
of this point.
We, for our part, were quite happy with the existing draft,
with the draft suggested by the Tariff Working Party, subject to
certain amendments. We proceeded on the understanding that if all
the contracting parties joined the ITO there should be no
difficulty in replacing Part II by the Charter: we would prefer
"by the corresponding provisions of the Charter" but we would be
quite prepared to accept any other alternative which meets with
general agreement. But some discretion should be left to the
contracting parties. It may be possible to make some provision
for a fresh review of the position, but the provision should not be
quite as rigid as that in the original draft, and we therefore
proposed that the decision at the time of such a review should be
taken by a simple majority and not by a two-thirds majority.
That was the main amendment which we have suggested and we
think that, with that amendment, the procedure for replacement
P. P. 46 E/PC/T/TAC/PV/14
would, be simple enough and would not give rise to the sort of
difficulties we feel about the Australian amendment. However, it
may be that, in view of the positive assertions on the part of the
Australian Delegation on earlier occasions, they would favour
automatic supersession of Part II by the Charter. We were
somewhat puzzled by the terms of the amendment proposed by them
and would therefore like to have clarification as to whether
or not our understanding that this amendment makes supersession
much more difficult than the provision indicated by the Tariff
negotiations Working Party is correct.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, may I
state that we have devoted many hours to discussing this question
of trying to find a solution to this very thorny problem in this
Working Group, but I think it is impossible to find a solution
which would satisfy everyone. We had the feeling that we
could not accept or come to a solution with the conviction that
this was the perfect solution. The Working Party envisaged a
certain number of solutions, and a form which would be given to
those solutions, but, after pondering them, they did not find
one of the solutions which had been envisaged satisfactory.
I would like to point out to the Indian Delegate, in
reference to the remark he made that it is possible for a
contracting party to the Agreement to stay outside of the ITO,
that this is a solution which will not occur, because the
Preparatory Committee has provided that the benefits and the
advantages granted to a contracting party should be withheld
if the contracting party did not join the ITO. E/PC/T/TAC/PV/14
M. ROYER (France) (Interpolation in English): No, I did
not say that. I said that the Preparatory Committee
submitted three alternative solutions, one of which provides....
(Interpretation, continued): .... The Preparatory
Committee submitted three alternative solutions and in one
of these solutions it is provided for that the benefits and
advantages of the concessions should be withheld from a
contracting party which did not join the Organization, and there-
fore there would be a contradiction to think that a contracting
party could not or should not join the ITO. Therefore, the
solution which was proposed by the Indian Delegate cannot be a
complete one.
Now,if we come to the Australian amendment it seems that the
Australian amendment has some good points in it but also it
tries to solve a problem which has no solution, like the problem
of squaring a circle. I would like here to draw the attention
of the Chilian Delegate to the fact that, in spite of appearances,
it seems that the Australian amendment trios to avoid the use of
veto and in fact deletes the use of a veto right, because when
will these provisions function? We have two cases in history
where a condition of unanimity is requisite; that is first in
the case of a jury and secondly in the case of a conclave which
proceeds to the election of a Pope. This condition of unanimity
seems illogicaI in itself, but nevertheless thus two bodies do
function properly, and juries give their opinion on matters which
are submitted to them, and also Popes have always been elected up
to this day, and I do not see here why this same provision
should not function properly here. If in a jury there is one
dissentient voice raised nevertheless it is not this dissentient
voice which carries the day, and in a conclave it is the same
47 P.48E/PC/T/TAC/PV/14
thins and it is not the voice of the dissenting Cardinal which
also carries the day for the election of the Pope. I am certain
that the same would apply here and that one dissentient voice
within the contracting parties acting jointly would not carry the
day.
Therefore I think that, in spite of appearances, it would be
best for us to adopt the Australian amendment and I think that all
the cases which might eventually arise will not happen, and I hope
and believe that the Charter which will emerge from the
deliberations of the Havana Conference will correspond in fact to
the text which we have now before us and to the Charter which was
adopted in Geneva.
P:
48 49
CHAIRMAN: The Delegate of Syria.
M. Hassan JABBARA (Syria) (Interpretation): Mr. Chairman,
the Syrian-Lebanese Delegation have spoken more then once on
this point are shown their desire to see the provisions of Part II
replaced automatically by the provisions of the Charter when
once the Charter is adopted, and on this point we find ourselves
in complete agreement with the statement made by the Chilean
Delegate.
I think that the form of unanimity which is provided for in
the Australian amendment cannot work in the way it is put forward
hare, and if this form of unanimity were to be adopted, I think
that it could only work in the opposite way that is to say, that
unanimity would be required if the principle of automatic
substitution were adopted, and so to modify this principle.
If this amendment were so modified, it would cover our wishes;
otherwise, we have to agree with what the Chilean Delegate said,
that is, that this amendment would loud nowhere and, in fact, would
lead to no substitution of the provisions of this Agreement.
I do not think that the comparison which was made by the
French Delegate could sway our decision, because if we consider the
election of the Pope, it is possible that a dissenting Cardinal
might be swept away by the Holy Spirit, and, on the other hand,
within a Jury one dissenting member may be convinced by his
colleagues and may be reasoned with so as to see the truth.
But here we will have representatives of important interests
discussing and perhaps clashing with other representatives of
important interests of other States, and I do not think that they
could always be convinced by the arguments of the opposite parties.
On the other hand, in many cases they may wish to maintain their
E/PC/T/TAC/PV/14
V E/PC/T/TAC/PV/14
position and only consider the interests of their own States and
their own trade. I doubt, therefore, very much whether this
principle of unanimity could work harmoniously.
Now, coming to the amendment itself, it seems to me that
paragraph 3 of the amendment ought to be modified so as to
clarify the whole amendment. We read "On November 1st 1948, or
such earlier date as may be agreed, should the Charter not have
entered into force, the contracting parties shall meet to agree
unanimously whether the General Agreement should be amended,
supplemented Or maintained". This is not what the amendment
ought to state. It ought to state that the contracting parties
should gather to review the situation in the light of the
decision made at the Havana Conference regarding this Charter,
and not to decide unanimously whether the General Agreement should
be amended.
CHAIRMAN: The Delegate of Australia.
Dr. H.C. COOMBS (Australia): Mr. Chairman, I have listened
with consideraable interest to Mr.Jabbara and, other Delegates, as
a result of which I do not feel so proud of this draft as I did
when I started. A number of points have been raised, some of
which I feel to be valid criticism.
I think the New Zealand point that it should be clear from
the text where objections are to be ledged and who should be
notified of those objections is one which should be covered in the
draft, quite clearly.
With regard to thepoint raised by the United Kingdom, it
would be desirable have a meeting as soon as objections have
been lodged, without waiting for the period which we refer to in
the second paragraph, I am. less certain about that, but I think
V
50 E/PC/T/TAC/PV/14
perhaps there may be something in it .
The reason why we suggested that consultation should take
place in the period of sixty days after the deposit of instruments
of acceptance by twenty governments is that it is only when twenty
instruments of acceptance have been deposited that you know
that the Charter is going to come into force, and it seemed to
us to be a bit academic to be considering what you should do
about objections to the Charter replacing provisions of the
Agreement if you did not know whether the Charter was in fact
going to come into force or not .
But, at the same time, as the United Kingdom Delegate has
pointed out, the content of the Agreement may be one factor
influencing a country deciding whether it will in fact deposit
an acceptance to the Charter, and it may be desirable, therefore,
to allow for consultations to take place at any time after the
closing date for objections.
I think that could be obtained just by deleting the first
three lines and a bit, of paragraph 2, and inserting the word
"thereuponon", which would enable the contracting parties to confer
at any time it was convenient, so to speak, after the closing
date for objections, but before the Charter in fact came into
force .
The Delegate of Chile raised objections to the inclusion
of the word "unanimous" in these two paragraphs. I agree
that the appearance of that word is perhaps a little unfortunate,
but my understanding of this is that you cannot have an Agreement
of this sort unless all the parties to it consent to what is in
it. If they do not consent to what is in it, they will not
become parties.
I think that some of the difficulties felt by the Delegate of
51
V E/PC/T/TAC/PV/14
Chille and. also some of those felt by the Delegate of lndia,
will be removed if I explain what sort of procedure I had in
mind when we prepared this draft. It seems to me that the
first part of the first paragraph makes it clear that s
supersession by the provisions of the Charter would be automatic,
and if nobody objects, the Charter provisions take the place of
those of the Agreement. Now, supposing somebody objects: then,
it seems to me, you have a meeting at which the objector has to
explain why he does not think the relevant provision of the
Charter should take the place of the provision of the Agreement.
The onus of proof is on him, and if he is in isolation - if he
is the only one who is not prepared to accept the provisions of
the Charter, then -unless, of course, he is a very important
Delegate- the outcome will presumably be that he will have to
make up his mind -that is, his Government will have to make up
their mind- whether they accept the Agreement with the
supersession of the clause from the Charter, or whether they stay
outside the Agreement. Or, at any rate; he would have to
persuade a sufficient number of the others to agree to his
proposal, whatever it was, for them to be unanimous and for the
remaining minority to be faced with the choice of joining or
getting out.
Therefore, the use of the word "unanimously", as we saw it,
merely recognized the fact that you cannot have an Agreement of
this sort to which all the contracting parties are not unanimously
consenting,--perhaps unwillingly in some instances, but still
consenting--to the content of the Agreement, because if they do
not consent, they will stay out.
I may say that in the original wording of this, the word
"unanimously"did not occur, but was put in at the request, I
think, of the French Delegation, who drew attention to the
52
V 53 E/PC/T/TAC/PV/14
necessity to recognize the facts of life.
The other point that the Indian Delegate raised I do feel
some more concern about, and that was when he drew attention to
a confusion which I think is a real confusion in this draft,
as to two problems associated with the relationship between the
Agreement and the Charter. The first is that the provisions
of the Agreement are narrower than the provisions of the Charter,
and one of the concerns of some of the Delegations here
(including my own) has been to ensure that all countries party
to the Agreement accepted the other obligations which are
incorporated only in the Charter.
If there were no Charter, then presumably we would look to
an extension of the Agreement, so that it incorporated at least
the essential provisions relating to employment, industrial
development, commodity policy and so on. On the other hand,
there is the question of the precise form of the commercial
policy provisions in the two documents and the problem arises
as to whether it is practicable or desirable to have two sets
of provisions relatings to commercial policy, one in the
Agreement and one in the Charter, which are not identical, and
that is a slightly different question.
I think it is possible to have two different sets of
provisions provided they are not in conflict. It would be
possible for the parties to the Agreement to perhaps agree on a
somewhat closer set of provisions than it was possible to give
the General Agreement, and that would not necessarily be
objectionable; but again it would be essential that the onus
of proof that a closer set of provisions was necessary or
desirable in the agreement should be on those people who are
dissatisfied with the provisions of the Charter.
V V 54 E/PC/T/TVC/PV/14
The substance of what I had to say, Mr. Chairman, indicates,
I think, that in certain respects, at any rate, the draft which
we have put before you is less than satisfactory, although I
do believe that the main principles underlying it--i.e. that in
the absencee of objection, supersession of the provisions of the
agreement by those of the Charter should be automatic and
secondly, that the onus of proof should be on the objector,
and thirdly that in the event of objection the parties should
meet and confer, and that the result should be something to
which all the parties who remain parties to the Agreement do
concur in- are, on the whole, sound; but if I can make a
suggestion, Mr. Chairman, we would be grateful if the Committee
would give us another try at this - not necessarily by ourselves -
but perhaps in consultation with other Delegations interested
because we feel that there are changes which could with
advantage be made in this draft. E/PC /T/TAC/PV/14
CHAIRMAN: The Delegate of Cuba.
Mr. H. DORN (Cuba): Mr. Chairman, I fully agree with the
proposal to review the formulation in the light of the discussion.
Therefore, I only want to add a few words about the legal situation
as it stands based upon the formulation before us,
If you apply the general rules of interpretation accepted in
international law, you come to the following conclusion: paragraph
l contains the automatic supersession, Therefore, there must be
a special clause for the consequence if there is one objector, and
the natural consequence in international law would be that there
must be a decision about the objection, and only about the
objection. That would man that the second paragraph would have
to state that you may retain or amend the clause of agreement by
unanimous decision, but if you cannot get unanimous decision then
the principle as stated in paragraph I would be valid.
. This interpretation is onlmaredo doubtful bone woBard contained
in paragaph 2 in the words which you find he:e " . shall be
superseded, retained or anekd"do If you strike out the word
"superseded", then, practically, the interpretation which I gave
would follow the lines of the rules generally accepted in
interti tonal law.
That is the first point, and the second point that I want to
add is that there will be a great difficulty, if you do not accept'
the superseislon because the clauses of the Charter would be
international obligations between the mane contracting parties
covering the same field, and the general rule of international law
as that subsequent obligations supersede prior international
obligiteons between theameae parties if they cover the same field.
55 56
I do not really see, up to this moment, how, without a special
clause contained in the Agreament, you could avoid this legaI
consequence, and I only wanted to state these two points for the
reconsideration which is going to be made of the proposal of
Dr. Coombs.
CHARMAN: The discussion which has taken place on the
Australian amendment has enabled certain delegations to point out
objections which they have to the Australian draft. Dr. Coombs
has recognised the validity of certain of these objections, and has
asked for the opportunity of submitting a revised proposal in the
light of the discussion which taken place here. I think
that the Committee would wish to grant this request of the Australia
Delegation.
I therefore suggest that we defer further consideration of the
first paragraph of Article XXVII until the Australian Delegation
has had time to submit a revised draft.
I therefore propose that we adjourn the discussion now and
that tomorrow we shall take up the othe r paragraphs of Article
XXVII. Is tha t proposal agreed?
Agreed.
The meeting is adjourned until 2.30 p.m. tomorrow.
The meeting rose at 6.25 p.m.
E/PC/T/TAC/PV/14 |
GATT Library | tm581yz8190 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Fourth Meeting of Commision A held on Wednesday, 28 May, 1947, at 3 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, May 28, 1947 | United Nations. Economic and Social Council | 28/05/1947 | official documents | E/PC/T/A/PV/4 and E/PC/T/A/PV.3-6 | https://exhibits.stanford.edu/gatt/catalog/tm581yz8190 | tm581yz8190_90240063.xml | GATT_155 | 12,591 | 76,126 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/4
28 May 1947.
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
FOURTH MEETING OF COMMISION A
HELD ON WEDNESDAY, 28 MAY, 1947, AT 3 P.M. IN THE
PALAIS DES NATIONS, GENEVA.
M. MAX SUETENS (Charman) (Belgium)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247).
NATIONS UNlES
(Begium) S - 2- E/PC/T/A/PV/4
CHAIRMAN (Interpretation): The Meeting is called to
order,
We will go on with the discussion of Article 13. I
would remind Delegates that this morning we said we would discuss
the question of whether we should approve the principle explained
by the Delegate of Chile, that is to say, to consider Article
13 as an Article of principle, with as few rules of procedure as
possible and those very flexible; or whether we should accept
the idea expounded by the Delegates of Australia and the United
Kingdom, to have a more speedy but at the same time a more
precise procedure on Article 13.
Does anyone wish to speak?
M. Jean Jussiant.
Mr. JEAN JUSSIANT (Belgium) (Interpretation): In New
York, Mr. Chairman, I was somewhat frightened by the length of
the text of Article 13 and if we were now dealing only with the
question of form I would prefer the form given to this Article
by the Delegations of Chile and New Zealand, which is more
concise. But we are not dealing only with the question of form
and the disadvantage I see in the text presented by these two
Delegations is that, according to the idea expressed, a country
who wishes to impose restrictions can do so prior to any con-
sultation. This, in my opinion, is very dangerous. We have
been very careful in the Charter to fix very strict limits to
the restrictions which may be put on trade, and the limits
apply to situations which are very clear in effect, such as
a lack of equilibrium in the balance-of-payments, and so on.
In the position in which we arc now, the situation is not
of the same kind as the one I mentioned and it would be very
difficult to fix a limit to the restrictions. Therefore S - 3 - E/PC/T/A/PV/4
I would rather support the proposals made by the Delegations
of the United Kingdom and Australia. Their two texts are in
any case not very different from each other and I think it
would be comparatively simple to harmonize them in a single
text.
CHAIRMAN: The Delegate for Canada.
Mr. J. J. DEUTSCH (Canada): Mr. Chairman, in this
morning's discussion I was impressed by the concern of various
Delegations regarding the possibilities of delay under the
operations of Article 13. I feel that the proposals put
forward by Australia and the United Kingdom are very constructive
in the direction of making Article 13 more effective for its
purposes and therefore I would like to support in principle
the proposals put forward by Australia and the United Kingdom.
CHAIRMAN: The Delegate for China.
R.hs i. A.,) ,hi k w.na): Mr. Chairman, I wish to raise
a point of order because, in the opinion of the Chinese Dele-
gation, the Chinese proposal is the farthest from the original
text, so we believe that the Chinese proposal should be put to
the vote first.
CHAIRMAN (Interpretation): I will answer the Delegate
for China by saying that we are not at present voting out only
discussing. I also believe that it would be useful to add
the Chinese amendment to our discussion and, as a matter of
fact, it was Mr. Helmore himself who mentioned the Chinese
amendment this morning, so I think we could also discuss this
amendment. - 4 -
Dr. J.E.HOLLOWAY (South Africa): Mr. Chairman, in the
course of the discussion this morning it seemed to me that
quite possibly certain Delegates were at cross purposes with
each other about the meaning of the New York Draft of Article
13. I think perhaps if I put a very simple question about
that, it would resolve this.
My question is this - I am still referring to the main
New York Draft which it is proposed to amend; that draft
uses the words, in line 4 of Paragraph 2 (a ): "would conflict
with any other provision of this Charter": now would those
words moan that there are any circumstances whatever in which
a Member is bound to inform the Organisation every time it
imposes or increases an unbound protective duty?
I think If that question could be resolved, the conflict
there seemed to be this morning would be dissolved.
S - 5 - E/PC/T/A/PV/4
CHAIRMAN (Interpretation): I do not think that the time
has come to raise such a question and I have in any case no
qualification to answer it; but, speaking for myself, I would
say that I do not believe that each time a country intends to
raise a duty which is not consolidated it has to consult the
Organization.
We pursue the discussion. Is there anyone who wishes to
speak?
Dr. H.C. COOMBS (Australia): Mr. Chairman, it seems to me
that the critical issue involved in the amendments which have been
submitted is that of whether it should be the right of a country
contemplating protective action at present forbidden under the
Charter to take action along those lines prior to consulting with
and obtaining the approval of the Organisation, or whether it
should be required to consult with the Organisation, with other
countries concerned, and to obtain approval before it takes the
action. That seems to me to be the fundamental issue.
It is true that some countries attach particular importance
to the right to take that action prior to consultation in con-
nection with quantitative restrictions for protective purposes.
Other countries would like to have the freedom in relation to all
forms of protective action at present proscribed under the Charter.
I would like to remind delegates of the way in which our
present proposals developed in London. The Australian ddlegation
did, at the London Conference, put forward certain proposals at
the beginning of the discussions on industrial development which
the Conference was good enough to take as a basis for discussion.
Those proposals included a provision substantially along the lines
now put forward by a number of countries, i.e. that a country
should be free to take action to adopt protective measures of a kind
/_, rw / A
p P. - 6 - E/PC/T/A/PV/4
proscribed under the Charter, subject to the right of other
oountries to complain and to seek to force the country concerned to
obtain subsequently the approval of the Organisation.
As a result of the discussions in London we agreed to drop that
proposal and to accept the one which is now in the Charter, that is
one which requires prior approval of the Organisation for action of
that kind. We did that as part of the general process of compromise
which was in evidence at our London discussions. I do not suppose
that anybody, any country, went, home after the London discussions
feeling that the Charter was completely satisfactory from their/point
of view. Compromise and sacrifices were made, I presume, by all
the countries. Certainly, speaking for the Australian delegation,
we believe that the Charter contains a number of elements which from
our point of view are less than satisfactory. Nevertheless we
were in London prepared to accept that position because we recog-
nised that this whole process of hammering out a Charter for Inter-
national Trade between countries of differing interests and differ-
ing systems of economic organisation is fundamentally one of com-
promise.
We are therefore - despite the fact what on the whole I think
we consider our original proposal perhaps still the best - we are
therefore prepared to accept and to support the compromise at present
embodied in the Charter with tile modifications which we have
suggested in the amendmente we have now put forward.
I think, Mr. Chairman, you dld suggest that they differed in
principle from the proposals put forward by the Indian and the
Chilean delegations. I would like to suggest that, they do not differ
in principle; they are an attempt to go some of the way to overcome
the very real difficulties associated with this procedure. Obvious-
ly, the big advantage of being able to take action in advance of - 7 -
of approval is that no delay is involved. If you accept the need
for prior approval it becomes desirable to reduce the possibilities
of delay to a minimum, and that was our purpose - not to suggest some-
thing which was in conflict with what the Chilean and Indian and other
delegations were putting forward, but to seek to obtain by other means
substantially the s ame results. We do not suggest that they are
completely satisfactory, but they go some of the way, and we are pre-
pared, in appropriate circumstances, to support that compromise as
part of a Charter which is itself a series of compromises.
There is only one thing that I want to add to that position:
it is possible, indeed it is desirable, to accept compromises of a
kind which involve you in accepting undertakings which it is not
entirely satisfactory from your point of view that you should accept;
but that willingness is dependent upon your belief that other countries
have the will and the capacity to carry through their part of the com-
promise. Every country will come out of this discussion with certain
phases of the Charter fairly close to what they would wish; there are
others where they will be accepting for the sake of compromise some--
thing less than satisfactory. It is important that the countries
participating should be confident that the other countries have both
the will and the capacity to implement both the provisions which are
satisfactory to them and the ones where they have accepted some com-
promise.
Now, Mr. Chairman, the position of the Austral delegation is
that we have sought in the amendments which we have put forward - and
I do not wish to suggest that they are by any means the last word; a
number of other suggestions including that of the United Kingdom delega-
tion obviously need to be examined together with our own - we have put
forward these proposals as an attempt to meet some of the real
E/PC/T/A/PV/4
P. P. E/PC/T/A/PV/4
-8-
difficulties which we recognise inevitably exist in a formula which
makes it necessary for a country to seek prior action. We do that
as evidence of our capacity and our willingness to reach compromises
not entirely satisfactory to ourselves; but I would emphasise that
that is dependent upon our belief that other countries will demon-
strate, not merely in discussions on the Charter but in their actions
elsewhere, that they, too, hare that will and that capacity. - 9 -
MR. H.C. HAWKINS (United States): Mr. Chairman, the
American delegation is in full agreement, I think, with what the
Australian delegate has just said. I think he has described
accurately the evolution of Article 13. We recognise that it
does represent compromises and must represent a compromise.
We are in agreement in substance with the proposals made by
the Australian delegation and the United Kingdom delegation
regarding provisions which would speed up the action of specific
proposals for the imposition of protective measures. We think
that those proposals might well be made the basis for discussion.
CHAIRMAN (Interpretation): The delegate for India.
DR. P.S. LOKANATHAN (India): Mr. Chairman, the delegate of
Australia has undoubtedly summarised the position quite correctly
and, if I may say so, very objectively.
E/PC/T/A/PV/4
J. - 10 - E/PC/T/A/PV/4
With his appreciation of the effects of the various
Amendments moved this morning with his narration of the
circumstances that led up to this Article 13, paragraph 2, I have
no quarrel. Indeed, I agree with almost every word of what he
has said; but it does seem to me there is one point of difference
between The way in which quantitative restrictions for protective
purposes have been treated and the way in which the rest of the
restrictions have been treated in this Charter. I think attention
should be given to that essential point of difference. When you
have tariffs you are allowed to use tariffs, and any country that
wants to reserve a certain article is not expected to give any
reduction in tariffs beyond the level at which he can afford to
go; and therefore tariffs are permitted; if a country wants
to protect in respect of an article on which it is entirely
binding by an agreement, one understands that that country must
go to the Organisation, and therefore a theme of that kind is
different from the way in which you say, in respect of quantitative
restrictions, that you ought to go to the Organisation in order
to use quantitative restrictions for protective purposes.
Take the question of quantitative regulation for the balance
of payments difficulties. There you allow the country which wants
to use quantitative regulations for balance of payments difficulties
to do so without having to come to the Organisation in the first
instance. It is permitted, in regard to subsidies, to do practically
the same thing. What do you say in respect of quantitative
regulations for protective purposes? Article 13 paragraph 1 says
"All forms of protection are allowed" - in whatever form, it is
stated, it is allowed - but when you come to Article 2, paragraph 3
you are told that quantitative restrictions for protective purposes
are outside the scope of this Charter. It is a violation of the G.
-11 - E/PC/T/A/PV/4
Charter when you try to impose quantitative regulations. Now
it is that distinction which does not go wall with us.
We cannot accept the position that merely because a country
wants to use quantitative regulations for its protection it
should be treated entirely on a different footing from countries
which have special quantitative restrictions when in any other
difficulty. The balance of payment difficulties should justify
a country in using quantitative restrictions without having to
go to the Organisation in the first instance, and I cannot see
why the same facility should not be given to those countries.
Therefore, the question of whether you ought to go to the
Organisation or not will depend upon whether we have got an
agreement. The country which has tariff regulations and has
therefore restricted its own powers certainly should not be allowed
to violate its own agreement without consulting the Organisation
previously. With respect to quantitative restrictions for protective
purposes there should be certain criteria laid down, and if the
country departs from these criteria then it should be open to
the other countries affected to go to the Organisation. That is
the real substance of our Amendment; and I think it is this
distinction that should be taken into account. It is no use
giving the right to take protective measures - and we have it on
the authority of various Delegates that protective measures here
include every kind - what is the good of giving that power, when
you say the use of quantitativ restriction would be a violation
of this Charter? The two things do not go together. There is an
inherent contradiction between 3l and 32, and this contradiction
must be removed..
CHAIRMAN (Interpetation): M. Baradue, the Delegate of France. - 12 - E/PC/T/A/PV/4
M. BARADUC (France) (Interpretation): The French
Delegation has so far rersir-ccG from taking part in this
debate; but I would like to remind you that we consider Chapter IV
with great interest for various reasons. First of all, ac,
already explaineo. in London, we consider this Chapter is of
great interest for countrise which are insufficiently
developed in thc economic field, and countries which are trying
to find means of aesuring this economic development which is
indispensable to international trade in general, and which is
the ohief aim of our meetings. Secondly, we also consider
this Chapter with great interest because France is responsible
for territories to which Chapter IV would apply directly.
Finally, there are some provisions in this Chapter which apply
directly to some European countries which have been victims
of the War, and in that respect the French Delegation would
support the Czechoslovak amendment explained this morning.
Having said this--and I would like to say immediately to
the Delegation interested that they should see in our position
no hostility whatever towards them--I wish to say that I
consider that the debate that has taken place has been very
well summed up by Dr. Coombs when he reminded us of the
historical aspect of the question in London and his statement
was an appeal to reason. From the debate which took place
today, and as I said myself this morning -- and there I
agree with what the Delegate of Belgium has just said
we find that it is indispensable to make precise provision
in Chapter IV or elsewhere in the Charter for the procedure
to be followed. We should not confins ourselves to a dec-
layation of principle as the Delegation of Chile might advise
us to do, because tho result would be a lack of balance V. - 13 - E/PC/T/A/PV/4
between the various Chaptere of the Charter, and in particular
between Chapter IVand Chapter V, which are closely connected.
In that respect, I do not completely agree with what the
Delegate of India said, because we find also in chapter V,
as regards the quantitative restrictions, and impossibility
of applying such restrictions without prior authorisation
from the Organization. Therefore, I cannot agree with the
Delegate of India when he said that theire was a diffrence
of treatment between Chapter IV and Chapter V. We should,
on the contrary, study closely the provisions of Chapter IV
in conjunction with the corresponding provisions of Chapter V,
and no diffrence whatsoever should be made in these provisions,
which provide for protection that in some cases might be
cumulative.
CHAIRMAN : The Delegate for Chile.
M. F. GARCIA-OLDINT (Chile) (Interpretation): In stressing
the necessity for having precise regulations, the Delegate of
France accepts tacitly the principles which we are defending,
and to avoid any possible misunderstanding, I would like to
state that we never said that our statement should constitute
only a declaration of principle.
We have provided for some regulations in our text itself,
and if it is true that such regulations are presented in a
summary form, it is none the less precise and detailed. The
Delegation for Chile is in addition, as I have already said
this morning, ready to accept any rules proposed, provided
that such rules do not go against our objectives, and if this
morning we said that we refused to take as a basis for dis-
cussion the Australian amendment, we none the less consider V 14 E/PC/T/A/PV/4
this amendment ss a good plan or a a good frame work where
various provisions not contained in our proposal could be
inserted.
CHAIRMAN: The Delegate for Brazil.
Mr. J. G. TORRES (Brazil): Mr. Chairman, this morning
after having studied the proposal put forward by the Australian
Delegation, we expressed the view that after the exchange of
views in this Commission, it might be adopted as a Working
Paper or a basis .or the work of the sub-Committee. I think
we have now come to the conclusion that there seems to be a
consensus of opinion in this Commission that the Australian
paper, possibly associated with the English paper, if we
decide precise dates, would exactly fulfil that purpose
This is especially so after we have heard the very interesting
expose of Dr. Coombs and after having heard the views of the
French Delegation. I would, therefore, move, Mr. Chairman,
in order not to prolong this discussion, that we refer the
matter to the sub-Committee and adopt the two papers as a
basis for the work of the sub-Committee. - 15 - E/PC/T/A/PV/4
CHAIRMAN (Interpretation): At the time when the delegate
for Brazil was soeaking, I was about to make a similar proposal
to the Committee. I think we can therefore consider the
discussion as closed, and ask the Sub-Committee to try and harmonise
the text.
We have now to study the second fundamental question, which is
the question of preferential arrangements. I would remind the
Committee that two delegations - Chile and Lebanon - wieh to
insert these regional preferential arrangements among the means
tending to economic development of undeveloped countries. The
discussion is open on this part. Is there any delegation wishing
to speak on that point?
M. HEL1MORE(United XKingom): Mr. Chair,man, I simply want to
ask the Chilean delegation how this amendment of theirs would owrk.
What we are talking about in aAticle 13, and particularly
paragraph 2, is the adoption by a member of a particular device.
Now, if I understand preferential arrangements - and that may be
somewhat doubtful - it seems to me that there are at least two
people involved in preferential arrangements, and I suppose that if
one calls those members A and B and they are both in the same stage,
as it were, of economic development, and both decide to adopt such
measures, one could conceivably, with some straining of the language,
get the or-ranzzaton to approve the adoption by A of a measure which
will assist B's iEnutsr1ialiation,and the adopt-on by Io ' a measure
which would assist A's industralisation. But if A and B were not
in the same stage of economic development, as might happen, then I
cannot see how this amendment could achieve the object which it is
intended to fulfil. E/PC/T/A/PV/4
Mr. F. GARCIA OLDINI (Chile) (Interpretation): I think
the aim of my amendment can be sumarisod in a few words. First
of all, in answer to the Delegate of the United Kingdom, I would
like to toll him that the idea underlying our amendment was
precisely elaborated during a conversation I had with him. I
think, further, that there is no confusion in our text. It
says that the Members recognise that, in the case of certain
industries which it may be necessary to develop, they can
call upon special governmental assistance, including protection
or other measures.
I see nothing illogical there and I see no mention of one
member only. It is obvious that if one of these treasures is
a preferential agreement, two or three Members, in general,
will be involved. In that case the measures which might be
used would affect two Memrbers and the regulations and procedure
which would have to be established would have to be followed
by those two Members.
The reason why we have to consider that regional arrangements
should be included in these provisions is that if we limit to
capital investments the action which might be taken in order to
develop an under-developed country, then we run the risk of
having industries which will be useless or, so to speak, still-
born, and such industries will not be able to find outlets for
their products.
It is necessary to have a large market and in order to have
this m is _czs3r have arrangements and agreements
with other countries to enable the new industries to live and not
to become a new burden on the country which creates them. S E/PC/T/A/PV/4
We are prepared of course to accept capital in order to
develop certain industries but these industries, in order to live,
must have a stable and expanding market and it is difficult to
find such a market if we limit our field of activity to these .,
under-developed and small countries. Preferential arrangements
would therefore help in finding the necessary markets, which are
indispensable. If not, we have two alternatives; either we
shall not be able to find the necessary capital, because the
investor will consider that an industry cannot live) or any
industry created will be still-born.
CHAIRMAN: Does any other Delegate wish to speak?
M. Jussiant.
M. JEAN JUSSIANT (Belgium) (Interpretation): The Belgian
Delegation has studied the Lebanon anendment with interest.
Being ourselves a small industrial country with a very small
market, we realise very well the difficulties of their situation
and in the past we have made various efforts to obviate that
situation. In particular I would mention the Conferences of
Oslo and Ouchy, but the agreements which were passed during
these conferences were of a completely different kind. The
to have/
idea was merely/a reduction of customs duties and not any
restrictions, whereas the amendment which has been submitted
by the Lebanese Delegation might cause some confusion.
We envisaged various preferences which would aim at making
some reserves and having extensive markets, but it might be a
dangerous tendency. If we are in favour of expanding markets as
much as possible, we do not think that such provision should be
included in this Chapter, which deals with the development of
under-developed countries. S E/PC/T/A/PV/4
- 18 -
I would mention that not all smell countries are undeveloped
economically and I think therefore it would be better if this
idea could be included elsewhere in the Chartar. I have been
wondering whether it is a good idea to include such a provision
in the Charter at all, because the main object of the Charter
is the reduction of customs duties and the stabilising of those
the/
duties and therefore/creation of larger markets which will
ultimately be of profit to the small countries. P. - 19 - E/PC/T/A/PV/4
Mr. J. MIKAOUI (Lebanon) (Interpretation): Mr. Chairman,
this morning my colleague has already explained to the Committee
the objectives of our amendment. I would not come back to that,
but I would like to remind the Committee that we do not ask for
the guarantee of a preferential system automatically, even to
neighboring countries, or countries which are ecnomically on the
same level. We do not ask this automatically, but only with
reference to the Organization. Therefore we think that our amend-
ment is really moderate, and should be included in Article 13. All
we ask is that the Organization may study with care the regulations
which might be established for a preferential system in order to
develop our markets and our products.
Mr. R.L. FRESQUET (Cuba): Mr. Chairman, we are here engaged
in an enterprise in trying to free world trade. Sometimes we
think that we are in a laboratory trying to invent more devices to
restrict world trade: Nevertheless, there are two justifications,
or two exceptions to that general or main rule of our behaviour here,
the rule that applies to those nations devastated by war and the rule
that applies to those nations under-developed economically we
have agreed to that already.
These two rules are practically of the same nature: that is
why we agree entirely with the proposal of the delegate from India
that those two rules should be treated accordingly on the same foot-
ing. There is a miner difference between the two, nevertheless, and
this minor difference is that in the case of countries devastated by
the war the measures to protect their economics, sere of a global
nature, that is, applied to the whole of their balance of payments;
whereas in the case of under-developed countries, the measures should
be taken individually to protect infant industries in need of such
protection. But in both cases there should be a time limit. P. - 20 -
If we treat this matter in Article 26 or in hero, I think we
oan go further than following any particular amendment and we will
be able to be fair to those conditions. But I do not think that
in this Chapter is the opportunity to introduce a new exception to
that general rule, an exception that will lead to the establishment
of regional economic groups. I do not think the amendment belongs
here and, may I dare to say, maybe it does not belong at all in the
Charter. Protective measures are in our judgment in the case of
under-developed countries destigned to protect particular industries
6xr particular countries. This new amendment presented by the
Lebanese delegation will broaden tremendously the scope of that
purpose and will provide a protection and. not only the protection by
means ofquantitative restriction but by means of execption to all
the rules of Chapter V, the industries of two or more countries
going, as I said before, to the establishment of a regional economic
group. That, in my judgment, is one of the strongest obstacles
that we can put in the way of freeing world trade.
Does anyone else wish to speak?
CHAIRMAN (Interpretation) : J.
- 21-
CHAIRMAN (Interpretation): I believe that the situation is
not very clear, I must say that as your Chairman I find it
somewhat difficult to refer this question to the sub-committee as
it stands at present. I do not see clearly if there is here a
majority in favour of the amendment. The delegate for the Lebanon
has just told us that he was very modest and nice, that he did not
want to be obstructive, but that as a representative of a country
which is not fully developed yet economically it seams to him that
he is entitled to some measure of protection including
preferential arrangement, it being understood that such arrangements
will, be subject to the procedure which has been mentioned in that
case.
I would like to know whether you wish to accept this
interpretation, and whether, ir that case, the sub-committee might
draft a text embodying this idea.
MR. C. WILCOX (United States): Mr. Chairman, I find in the
present drafting of the Charter in Article 38, paragraph 4 these
words: "the Members recognise that there may in exceptional
circumstances be justification for new preferential arrangements
requiring an exception to the provisions of Chapter V. Any such
exception shall conform to the criteria and procedures which may be
established by the Organization under paragraph 3 of Article 66".
It is not clear to me whether it is the intention to move the
deletion of this paragraph and the substitution of the wording
suggested for paragraph 13, or to retain both paragraphs. I
should like to be enlightened on that point and be informed why it
is necessary to make the ssme exception twice In the document.
MR. J. MIKAAOUI (Lebanon) (Interpretation): In New York, in
the discussions which took place there, someof our colleagues
E/PC/T/A/PV/4 - 22 -
Will.
already reserved their position on Article 38, and we/find these
reservations again, no doubt, when Aticle 38 is in discussion.
The other countries, those countries which were formerly part
of the Ottoman Empire, have a tendency in orde to develop their
industry and their economy to grant preeretial systems. The
amendment now under discussion was also mentioned and submitted in
New York, and I wish to maintain it all the more as I believe, if
I have understood correctly, that it is inconformity with what the
Australian delegate has said; previously.
The procedure is already provide for by the Charter because
the Members may ask permission of the Organization to establish a
preferential system, but what we wish is to revise the procedure
and ask the Organization to consider favourably a request of that
kind in order to develop the exchages of countries which formulate
such a request. I draw your attention to the fact that our
proposal would not duplicate with other amendments of texts which
might be adopted, because we are not trying to restrict the entry of
imported goods, but simply to facilitate the gaining of more
extensive markets for our products. . G. E/PC/T/A/PV/4
- 23 -
Mr. GARCIA-OLDINI (Chile) (Interpretation): When the
question was discussed at the same time as the discussion on
Article 14, we suggested that a Sub-Committee be appointed to study
it and at the same time Articles 13, 14 and 38, and unfortunately
the Committee did not follow us, and at the time when the vote was
taken it was stated that the vote was not on the substance of
the question, but only on the insertion of our proposal in
Article 14; and that the question should be taken up again
when Article 13 or 38 came under discussion.
Now we are discussing Article 13, and we remember what was
said when our proposal was submitted. We are submitting an
Amendment on Article 13 which is not entirely satisfactory to us,
but which at least leaves the door open, and of course we agree
that some precision and some regulation would be necessary; but
now we hear the Delegate of the United States suggesting that
the question should not be discussed with article 13, but
possibly with Article 38. We find ourselves, therefore, in a
very strange situation. At the time when we discussed Article 14
we were told that the question, would be discussed in the discussion
of article 13. Now we are discussing Article 13 we are told we
should not discuss that now, but Article 38; therefore, I wonder
whether it would not be possible to study Articles 13 and 38
together, and decide whether our Amendment should be inserted
somewhere in one of these Articles or rejected altogether.
CHAIRMAN: (Interpretation): The Delegate of the United States.
Mr. WILCOX (United States): I think the Delegate of Chile
may have misunderstood my question. I did not suggest that the
question should not be discussed in this connection. I merely
asked if it were discussed in connection with Article 13, and
action were taken in connection with article 13, whether it would G.
- 24 - E/PC/T/A/PV/4
be probable that paragraph 4 of Article 38 would be removed from
the Charter. I should think it would then be redundant, and would
moan the same thing.
Really, what seems to be involved here is whether the matter
of determining criteria and procedure is going to be undertaken by
the Organisation as provided in article 38, paragraph 4, or is going
to be undertaken her, and now by the Sub-Committee; and I think
if the Sub-Committee considers this problem it should consider the
two Articles together, because they are obviously related.
Mr. GARCIA-OLDINI (Chile) (Interpretation): I see no
disadvantage to any Amendments or procedures being studied and
kept, if necessary, in the various Articles. In this Article 13
we are only dealing with economic development. In the other
Article 38 the text mentioned is dealing with another situation,
which is much broader and somewhat different. Therefore I think
there would be no disadvantage in keeping the text of Article 38,
even if our proposal be accepted for Article 13. 00 course, if
we accept our proposal for Article 13, it might be necessary to
change the text of Article 38, but I see no disadvantage in keeping
it.
CHAIRMAN: (Interpretation): I believe that now the situation
is clarified There is no formal objection to the consideration
of the Lebanese Amendment, supported by the Delegate of Chile.
I therefore propose that that this Amendment be referred to the Sub-
Committes for final draftng. Of course, it will be impossible
to deal with this Amendment without any reference to Article 38,
paragraph 4, and .his text will have ultimately to be altered.
Therefore, I see no disadvantage in asking the Sub-Committee to
study the insertion of this Amendment in Article 13, and make
a proposal for a new drafting of Article 38. G.
E/PC/T/A/PV/4
- 25 -
Dr. HOLLIWLY (South Africa): Mr. Chairman, on a point of
correction. I do not know whether the translation exactly conveys
what you said. I understood you to say that there is no objection
to the Amendment of the Delegate of the Lebanon, supported by the
Delegate of Chile, going forward for further study. The
translation said, "There is no objection to the Amendment". There
may be very strong objection to the Amendment.
THE INTERPRETER: I said there was no objection to the
Amendment being considered. I have got it in my paper.
CHAIRMAN (Interpretation): The Chilean Amendment is to be
treated exactly on an equal footing as any other Amendment. It is
referred to this Sub-Committee for consideration.
We now have to decide on the proposal made by Mr. Coombs, which
consists in adding a new paragraph 13(A) - a new Article - dealing
with the countries which may wish to join the International Trade
Organisation, and therefore would have to agree in advance to the
provisions of the Charter.
Is there any objection to referring this Amendment to the
Sub-Committee?
Dr. COOMBS (Australia): If I may make one small point of
explanation. The misunderstanding arose from the wording of my
statement; but from your summary of the proposal there does appear
to be a suggestion that this proposal would refer only to new
Members and not to original Members, if you might call them that,
It was our intention, of course, that this transitional period
would be available to all Members - original ones, as well as new.
In effect, it gives all Members who become subject to the provisions
of the Charter a period of time in which to put their house in order. - 26 -
CHAIRMAN; The Delegato of the United Kingdom.
Mr. J.R.C. HELMORE (United Kingdom): Mr. Chairman, this
morning when I was speaking of the United Kingdom amendments. I
pointed out that we had been thinking of the same point as is
dealt with in the Australian Article 13A in a new paragraph
which we suggested for addition at the end of Article 13 as
new paragraph (e). I attach no importance whatever to the
point as to whether it comes as a new Article altogether or a
new paragraph in the old Article; but I think the point to
which the Australian Delegate has just called attention, namely,
whether this applies to new Members joining the Organisation or
to original Members at the time they joined the Organisation, is
one which the Drafting Committee will haveto look at.
You will see that our version refers to the date of entry
into force of the Charter, and that, of course, is applicable
to what I might call original Members,
There is one other point which I would like to suggest
that the sub-Committee should consider, and that is that we
do not wish to see, because this "let-out" for existing
operations is put into the Charter, one day before the Charter
comes into force all the countries in the world put into force
every single measure of this kind that they can in order to
get in first. I think it is a difficult point to meet, but
obviously there might be some -- clearly none of the original
Members who might be those sitting around this table would do
such a thing -- but there might conceivably be some Governments
somewhere in the world which would seek to take advantage of
a provision of this sort, and it seems to me that it needs some
careful thought to see how we can avoid that situation.
E/PC/T/A/PV/4
V V. - 27 -
Mr. Clair WILCOX (United States): The amendment 13A proposed
by the Delegation of Australia raises the question as to the
time which is to be applied to the measures in question. I
think there is difficulty both as to the use of the time of
ratification and the time of joining the Charter and perhaps
a good timing would be the adoption of the date May 28th 1947.
That is, I, think, a matter to which the sub-Committee should
give some attention.
There is another matter in the next line. The proposed
amendment treats in the same way measures which conflict with
the provisions of the Charter and measures which conflict with
any obligation which a Member may assume through negotiations
with another Member or Members.
Dr. H. C. COOMBS (Australia): May I say that those words
remained inadvertently and we did propse to suggest that they
should be cut out.
Mr. Clair WILCOX (United States): I have no objection
to this Article going to the sub-Committee, but in the same
way in which the other Article went to the sub-Committee for
consideration.
CHAIRMAN: Does any other Delegate wish to speak?
E/PC/T/A/PV/4 ER
M. STANISLAV MINOVSKY (Czechoslovakia) (Interpretation): I
wish to point out that there are some protective measures which are
already authorised by the Charter for the duration of more than one
year. I therefore assume that it would be useful to add a sentence
to the text of Article I3A as it stands: "Where a member is, at the
time of joining the Organization, using any protective measure which
conflicts with the provisions of the Charter or with any obligation
which the member may assume through negotiationis with any other
member or members, and which is not covered or allowed by some other
provisions of the Charter, that member should not . etc."
There are, as I said before, some exceptions provided for two or
three years, as is, in particular, the case of occupied countries.
CHAIRMAN (Interpretation): If I have understood well, the
delegate for Czechoslovakia wishes this amendment, the principle of
which, he accepts, does not go further than other Articles of the
Charter to deprive members of rights already granted to them by
other provisions. I think we can leave that question to the Sub-
Committee.
Mr. J.J. DEUTSCH (Canada): Mr. Chairman, I would like to ask
a question for purposes of clarification. I wonder whether Dr.
Coombs tends, in this amendment, to include protective measures or
to refer to protective measures whether or not the Items are
included in the tariff agreements? In other words, I can see two
possibilities. One is protective measures applied on items
which are not bound in the tariff agreements or protective measures,
whether or not they are bound in the tariff agreement. It makes
a considerable difference as to which is intended. E/PC/T/A/PV/4
Dr. H.C. COOMBS (Australia): As I pointed out when the
delegate of the United States was speaking, it was our intention.
to delete from Article 13A the words following "provisions of the
Charter" down'to "member or members". If those are deleted, it
is clear that our suggestion for this transitional period applies
only to those protective measures which conflict with the provisions
of the Charter which would not include; of course, tariffs.
Mr. J.J. DEUTSCH (Canada): Mr. Chairman, I am sorry to
detain the Committee again. My question was this. If a member
agrees to bind the tariff item in agreement, may that member
continue to apply a quantitative restriction pending the determination
by the Organization, or may it not? There are two questions. Some
items will be bound in tariff agreements, and other items will not
be bound in tariff agreements. May a member continue to use
protective measures contrary to the provisions of the Charter for
both types of items or only for the types that are not bound?
Dr, H.C. COOMBS (Australia); Mr. Chairman, as I see it, it
would depend upon the nature of the tariff agreements, If the
tariff agreement was entered into, binding a particular item duty
at a time when a quantitative restriction was operative on that
item, and the fact that that quantitative restriction was operative
was known to both parties at the time when the agreement was entered
into, it seems to me then, that it would be reasonable for this
item to allow the continuance of that quantitative restriction in
the same way as the quantitative restriction on any other item. If
of course much quantitative restriction was not operative by which
the tariff agreement was intended, then it would be different. I
think it would be unlikely, in those circumstances, that a
29 ER
30 E/PC/T/A/PV/4
quantitative restriction would be imposed subsequent to an
agreement on an item bound in such an agreement, and if an attempt
were made to act in such a way it would be capable to act under
the terms of the Charter.
Mr. CLAIR WILCOX (United States): I do not believe the
answer given by the delegate of Australia meets the problem raised
by the delegation of Canada. It seems to me that what was really
intended here does not conflict with any of the provisions of the
Charter or with any obligations that members may assume to
negotiations. What was intended was measures which conflict with
the provisions of the Charter, and do not conflict with any
obligation which the member may assume through negotiations with
any other member. Certainly it would not be the intention of
Article 13A, as proposed, to abrogate from the text of the Charter.
This is a problem I suggest we leave to the careful attention of
the Drafting Committee. S 31
CHAIRMAN (Interprotation): I believe we can entrust
the Sub-Committee with the care of drafting finally Article
13A.
M. Baraduo, would you like to say anything?
M. PIERRE BARDUC (France) (Interpretation): I think the
amendment presented by the Delegate of Australia certainly
deserves to be taken into consideration, with the other
amendments, by the Sub-Committee, but, insofar as it applies
to the rules to be observed by new Members joining the Organi-
sation, it seems to me that it raises an objection of principle
that does not apply only to this Chapter, I do not think
that anywhere in the Charter we have envisaged its application
to new Members who wore not signatories to the Charter but
who ultimately apply for Membership of the Organisation. I
think it might be useful to envisage the insertion of a special
provision covering the whole Charter but applicable in general
to those now Members.
Let us take, for instance, the case of two governments who
have had agreements with one another for a long time, agreements
which provide for discriminatory measures: are they going to be
obliged, when they join the Organisation, to cancel those
arrangements altogether; are they going to be given time to do
so, or what is the procedure? I think we should cover that
in the Charter.
CHAIRMEN: Mr. Helmore.
Mr. J.R.C. HELMORE (United Kingdom): Mr. Chairman, if I
might attempt to deal with the difficulty which M. Beraduc has
just raised, the two cases seem to me to be entirely different.
S S E/PC/T/A/PV/4.
In the case of an arrangement for mutual discrimination,
that is outside the provisions of the Charter altogether and
if countries want to join the I.T.O. it seems to me they must
give that up before they join or at the time of joining, or,
conceivably, they could negotiate with the I.T.O. about what
latitude should be given to them in bringing such an arrangement
to an end.
In this case we are considering an article which allows,
after consideration item by item, the use of a particular device
and it seeded to us that it would hardly be sensible to require
everybody to give up the use of these devices, only to apply,
the day after they join, for permission to use them again, and
possibly to receive it within five or six months.
That is why the two cases seem to me to be on an entirely
different footing. If a thing is forbidden, one gives it up
before joining. Ift a thing is permissible after consideration
by the Organisation, then in principle at any rats there is a
case for allowing it to continue whilst the Organisation
considers it. J E/PC/T/A/PV/4
ER. J.J. DEUTSCH (Canada): Mr. Chairman, this raises some
rather large questions with regard to tariff negotiations. If
countries are permitted to continue quantitative restrictions for a
period and then may request for the indefinite continuation of them
latex from the Organization, that means that in the case of
negotiations on tariffs, you have to ask in each case whether a
quantitative restriction exists and if so, whether the country using
the quantitative restriction will desire to continue with it after
asking permission from the Organization.
Now, that puts a different complexion on the tariff which you
are negotiating. IT seems to me that you are now into
negotiating both tarifs and to some extent quotes. That was not
the intention. So far, we have all assumed in our tariff
negotiations that quantitative restrictions are excluded. If any-
thing like this is adopted, that assumption can no longer be used.
I just want to suggest that .that raises some rather large issues
with respect to the second part of our work here at Geneva, and I
hope the sub-committee will keep that in mind when they come to
consider this matter.
CHAIRMAN (Interpretation): Does any other delegate wish to
speak?
The Australian amendment will therefore be referred to the
sub-committee, which will take into account the observations just
made.
We have therefore finished with the debate on Article 13. We
have now to discuss the fundamental questions raised by the
delegation of the United States as regards Capital Investment and
Movement of Capital.
I will remind you that two delegations had asked for this
question to be reserved for today, They are the delegations of E/PC/T/A/PV/4
Cuba and India. I therefore assume that the delegations are now
ready to discuss the question.
DR. GUSTAVO GUTIERREZ (Cuba): Mr. Chairman, we are ready for
the discussion. I will not speak at the moment, but when the
question arises.
CHAIRMAN (Interpretation): But the debate has already taken
place, and in order to conclude we are merely waiting for the
opinions of the delegates of Cuba and India, who asked for the
matter to be postponed.
DR. GUSTAVO GUTIERREZ (Cuba): Mr. Chairman, we would simply
say at this moment that we are very sympathetic with the proposal
made by the United States delegation. Our main objection to it is
that we do not consider it convenient or proper to introduce an
amendment in the title of the Chapter. We consider that it should
be left like it is and. called "Economic Development". Probably
there could be inserted. a special Article which could perhaps be
entitled. 'International Investment for Economic Development".
Then, on Article 12 we would suggest some slight alterations.
We are absolutely ready, and we welcome the investment of foreign
capital's and we consider that it is of prime importance for the
development of under-developed countries to grant to those foreign
capitals an equal position of guarantees, but they should be drafted
not
as carefiully as possible so as/to give foreign capitals a better
standard than national capital, not avoiding the possibility of the
national capital to work for the development of the country, and at
the same time, not leaving any possibility for foreign capitals to
mingle into political quest ions. That is our position.
With that in mind., we think that this Chapter should introduce
the biggest part of the amendments of the United States delegation.
J. 35
CHAIRMAN (Interpretation): The delegate for India.
DR. B.N. GANGULI (India): I am sorry to say that the Indian
delegation is in the position of being caught napping. The
Leador has just left as we expected that the matter would not be
taken up at the fag end of this meeting today, but since the,
question has just been raised, I should like to say very briefly
the position of the Indian delegation with regard to this very
fundamental question.
We feel that we are not inclined to favour any detailed
prcoedure being adopted with regard to the treatment of capital and
enterprise in a particular country which has borrowed capital from
another country.w We have noted the detailed procedure which has
been laid down in the terms of the American amendment. We feel
that it should be the business of specialized agencies, like the
International Bank or some kind of reconstruction organization, to
lay down conditions under which foreign capital might be permitted
to move from one country to another, either for purposes of
development or for purposes of reconstruction. We are in favour
of laying down a very general principle embodying the essential
saf guards for creditor countries. We afeel that the purpose
might be served by the statement of a general principle, not
necessarily in terms of paragraph 2 of article 12, which in our
opinion is rather to comprehensive, but the purpose can be served
very well in terms of the amendment which we have proposed.
Here we say: "each Member which receives facilities for its
industrial and general economic development shall not only carry
out all international obligations regarding the treatment of the
enterprises, skills, capital, arts and technology imported from
other countries to which it may be subject or which it may undertake
pursuant to sub-paragraph (c) of Article 61 or otherwise, but also
J.
E/PC/T/A/PV/4 J. E/PC/T/A/PV/4
36
shall in general take no unreasonable action injurious to the interest
of the particular business entities of persons within the
jurisdiction of other Members which supply it with such facilities".
The words which occur at the end of the sentence are, in our
opinion, the significance so far as the point on our amendment is
concerned. E/PC/T/A/PV/4
37
We do not want to undertake any sweeping and general
obligation with regard to the treatment of foreign enterprise,
or things like that, but if a particular country has imported the
enterprise, skill, capital, arts or technology of another country
we think that the creditor country is justified in asking for a
safeguard of this character.
Therefore, we want to limit the obligation of a particular
country regarding the enterprise, skill, arts or technology which
may be provided by a particular country; but beyond that we are
not in favour of laying down any general obligations.
CHAIRMAN: (Interpretation): The Delegate of New Zealand.
Mr. WEBB (New Zealand): Mr. Chairman, the New Zealand
Delegation feels with the Delegation of India that it is inexpedient
and a little unwise to attempt at this time to give as much
precision as it is apparently sought to give to the provisions of
the Charter relating to international investment.
It is our view that the matter is for the purposes of the
Charter adequately dealt with in Article 61(c) and again in
Article 12, paragraphs 1 and 2; and we further attach some
importance to the fact that at the meeting of the Economic and
Employment Commission of the Social and Economic Council which
begins on June 2nd, the Agenda includes the consideration of
international action for facilitating the better utilisation of the
world resources of manpower, materials, labour and capital. It
seems to me that by adopting the American series of Amendments we
would be destroying the balance of this part of the Charter by
elaborating and emphasising one of the factors in progressive
economic development. It seems there are other factors which might
equally be elaborated, because they are equally important; but
I think what is more serious is that we would be, by tackling this
Amendment, approaching an important problem in what seems to me
a partial and a hurried manner. I say "partial" because it seems E/PC/T/A/PV/4
38
to me that if we are going to tackle this problem of international
investment we should tackle it as a whole, and not merely tackle
one segment of the problem, which is the problem of what one
might call private international investment.
What is proposed here is a code for private international
investment, and one might elaborate a code for Government to
Government lending. It would be an interesting document, but
I do not know that it would be a wise document to place before
this Conference at this time. I say "hurried", because although
I do not doubt that the American amendments have been very carefully
considered, yet I do not think that this Conference has the
time to tackle the problem in all its aspects. It seems to me
that we should look at the whole problem if we look at it at all,
and that would include lending by Governments and also, of course,
by private investors. And furthermore, that we should consider
the obligations of lenders as well as of borrowers, and that we
should not attempt to deal with the whole matter by applying a
few simple principles of equity.
It is for those reasons that we feel that it would. be wise
to leave the matter more or less as it stands in the Charter at
the present time. E/PC/T/A/PV/4
CHAIRMAN.: The Delegate of the United States.
Mr . Clair WILCOX (United States): Wi-.r. references to the
ooaients made by the Delegate of India, I should like to say
that our Delegation is in agreement with the purpose of the
amendment proposed by the Indiana Delegation which appeare at
the bottom of Page 5 and the top of Page 6 of the Secretariat'
Agenda. The significant point there is the introduction of the
word "particular", and I think this was always the intention of
that section, and the amendment as suggested makes it explicit.
The other point that was made was that the International
Bank for Reconstruction and Development may have an interest in
problems in this area also, and I would suggest that when a
sub-Committee considere this matter the Representative of the Bank
be asked to be present and give us the advantages of the views
of the Bank.
Mr . L. GOTZEN (Netherlands): Mr. Chairman , I am afraid I
cannot agree with the remarks made by my college for New
Zealand on this matter, as, in my opinion, the Articles proposed
by the American Delegation form, as I have already said, a very
valuable counterpart of the Articles on economic development.
In the world, as it is now, there are great capital funds
awaiting an opportunity of fertilising the fields of economic
developmnt, and I am very much afraid that if we should not
set up some court on investments that it would be quite
diffe --f for these fn ;¢ ->>-1Prr'es r^ .30 w;."i s those
fields.
As to the time we have had for studying this matter,
I should say that as the Session is not yet over, and I think
we will be here for many days or many weeks, even perhaps a
few months, we all have time to study this matter, and at the
end of the Session, we might come to a conclusion on these
matters.
V 40
Dr. H.C. COOMBS (Australia): Mr. Chairman, it is clear that
when the Sub-Committee comes to deaI with these suggested amendments
it will have to take into account not merely the economic
implications 0f these proposals, but the political aspects of these
questions, which may well prove to be very complex in character and
indeed some of them may prove to be beyond the normal field of
competence of people at this Conference. I daresay the Sub-Committee
will find that out - if I am correct - as they proceed. I wish,
however, to make a specific suggesion. In our preliminary
consideration of this it has occurred to us that, in the Articles
of Agreement of the Monetary Fund, countries are given the right to
control capital movements. Furthermore, it is provided that they
may be required by the Fund to control capital movements. Now
the precise implication of that right and that possible obligation
on the proposals which the United States have out forward, are not
clear to me at this moment. But I would suggest that the Sub-
Committee, when it comes to consider this question, should consider
it in the light - alone with other things - of the intentions
lying behind the Articles of Agreement of the Monetary Fund in
relation to the movement of capital, and that for that purpose it
would., perhaps, be advisable for the D'_r,1fL' s-3 to call into
consultation the representative of the Fund who, I understand, is
here.
Mr. ITTh T. .rr fC)RD (Reresentative of the International Bank):
Mr. Chairman, after the release of the United States proposal on
investment, I have cabled the international Bank to enquire as to
their views on the proposal. I have been informed by the Bank
that they would like to have it included in the record that they 41
are entirely in sympathy with the general purposes and objectives
of the proposal that has been made. They wish me to add, however,
that obviously they had not had time to study the precise language
and they are not attempting to deal with the precise form or
phraseology which should be used, but they do feel that it is
important in this area to encourage as far as possible the use of
private capital in international investment, and that, therefore,
if it is possible or practicable to work out some proposal of this
character, that it might be a thing worth while doing. I would
like to add, too, that the Bank has authorised me to say that if
the proposal along this line was adopted, the Bank would be very
happy to co-operate in every possible way in carrying it out and in
doing what they can to make a success of that. Obviously the
Bank does not want to enter into any discussion as to whether this
should be an ITO or United Nations wording. Their interest is
only to see that something along this line - if this Committee
should find it practicable - should be given whatever encouragement
is possible to accord them. I might further add that obviously
the term "international investment" is extremely brood. Obviously
the Bank would regard the provisions here contemplated as dealing
with a field other than the Bank itself - that is the limitations
and powers of the Bank as spelt out in its Charter. The Bank is
not in any way inclined to encreach in the field of anything of
that character but would simply facilitate the discussion by making it
clear that we do not attempt to claim any authority in this field
nor likewise do we believe that it is your wish that the Article
would be in any way amended by this procedure. 42
CHAIRMAN (Interpretation): I thank the representative of
the Bank for his statement.
Mr. C.H. CHEN (China): Mr. Chairman, in the last meeting the
Chinese delegation supported the United States proposal of adding
the international investment to this Chapter. But at the same
time we expressed our view that the text, as proposed by the
American delegation and stated on page 6, we wish to amend.
Concerning the first paragraph, in the last sentence we wish to add
a few words. Instead of the word "supply" we wish to amend it to
'undertake to supply in accordance with its laws, regulations, or
the treaty obligations it has assumed". In the second paragraph,
after the word statement" we wish to add the words "of policy".
Concerning the last sentence, we also wish to make changes, namely
"treatment no less favourable, than that accorded to the citizens or
legal entities of any third country" is, in our opinion, more
appropriate in a bilateral treaty, whereas we are feeling with a
Charter of multilateral character and containing the Most-Favoured-
Nation clause already stated in another Article, so that it seems
unnecessary for us to retain this phrase in this paragraph.
And of course we are aware that any third country may be a
non-member country, but we hope that, eventually, all countries
will join this Organization.and any member who will join this
Organization, will, of course; undertake to observe all the
obligations stated in other Articles of this Charter. So in
principle, we support the American delegation's proposal to have
this addition included in this Chapter, but as to the text proposed,
we wish it to be carefully considered by this Committee.
E/PC/T/A/PV/4 43 - -, -? -' - .
CHAIRMAN (Intrprotation): I believe thct a strong
majority of Members have given their opinion in favour of the
United States amndnn. Therefore, acfter the debate whioh
took plac yesterday and again today, we cian eask the Sub-Coimtteo
to study these rticles and draft a final text which will take
into account all the opinions expressed.
Ar you all in agreement?
(Agreed)
Threa is onoquestion wtlast on which I want to have
your opinion jbefore we can adourn: that is the amendment
presented by nthee South ,Afhrcica Dlegation wih is contained
in Docum eente W102, but I'aieoaee that the Delotoof South
Africa would like to explain his amendment himself.
YDr. J.E.H0I11GVh Afr.ica):rma Mr, ChairAn, ould
like to suggest, after we have heada a whol dy debating an
Article with the unfortunate number of 13, theat to com along
at this staage with proposal which , although it is quite
small in its particular context, afafeects a lrg number of
ftioheecsin thoarter, woul d be a-mot unpopul-.armIove, t
teherefor propose that we should sit again.
Dr. GUSTAVRREO GUTIEZ (Cuba): Foer theme vry sa reasons,
and some others, we may have to havem tehe coplte deletion of the
whole paragraph, so I do not know if it will be preferable to
submit the whole thing to the Sub-Committee,
. HDr. J.EOLLoOWAY (Suth Africa): Hairman, Mr. C I do not
think t is a matter for the Sub-Committee that I am ra Iising,
am raising a point of order, whether at this late hour we should
start on an entirely now subject which will keep you very long
nd the discussion of which, in any case, will not be conc.luded,
RA/P (I,./4. 44
S E/PC/T/A/PV/4
I do not think it is fair to produce what I can assure you
is an important subject relating to the whole construction of
the Charter at this time of the day.
CHAIRMAN (Interpretation): It was my intention to
conclude the discussion on Chapter IV today. However, in
view of the suggestion of the South African Delegate we shall
have to moot again tomorrow. In that case, we shall adjourn
until tomorrow morning at 10.30, when we shall study the
South African amendment. Committee B will meet tomorrow
afternoon.
M. STANISLAV MINOVSKY (Czechoslovakia) (Interpretation):
Mr. Chairman, in view of the great importance for Czechoslovakia
and Central Europe as a whole of the United Status amendment to
Article 12, I would ask whether Czechoslovakia could follow the
debates of the Sub-Committee when it discusses the United States
amendment. This is only a request and I do not insist if it is
not possible,
CHAIRMAN (Interpretation): I cannot, of course, answer
for the Sub-Committee, of which I am not a member , but it has
always been understood,- for Chapter IV as well as for the pre-
ceding Chapters - that the Committee could appoint any Member who
might be interested in a given questions I am sure that if you
apply to the Sub-Committee you will be invited to the debate.
Mr. E. W7WIDF8j,:iw,~(Executive Secretary, Preparatory Commit-
tee): Mr. Chairman, the modification of the arrangements which have
been suggested by the Charter Steering Committee and approved by the
Preparatory Committee does raise certain procedural difficulties
and I think if we are to keep within the arrangements made by the
Charter Steering Committee we shall have to envisage Committee B
meeting tomorrow morning at the same time as Committee A, or,
alternatively, of having a second meeting of Committee B on
Saturday morning. E/PC/T/A/PV/4
45
MR. E. WYNDHAM WHITE (Executive Seoretary) (Contd.): I think
that the Chairman of the Charter Steering Committee would agree
with me that the modification of dates at this early stage would
make a serious alteration in the arrangements which the Steering
Committee has laid down, and I am wondering which of those two
arrangements commends itself moat to the Committee. Either the
first meeting of Commission B should take place tomorrow morning
as planned, but simultaneously with a further meeting of Commission A,
or the second meeting of Commission B should be postponed until
Saturday morning. G.
E/PC/T/A/PV/4
46
Mr. WILCOX (United States): The Steering Committee was
meeting to-day in an attempt to re-schedule the meetings at
the beginning of next week. It is extremely important that this
Commission and. Commission B complete the work on Chapters 4 and. 6
this week, Now that could be done by a simultaneous meeting with
Commission B on Chapter 6, if we thought. it would be feasible and
possible. If that should not be possible, then I should think that
the meetings on Chapter 6 in Commission B. should take plae on
Thursday afternoon, Friday morning and afternoon, and Saturday
morning. That would enable that Commission to complete its work.
I think it would be preferable, however, if we could meet
simultaneously as previously stated.
CHAIRMAN (Interpretation): I am compelled to ask various
Delegations for their opinion, because the simultaneous meeting
of two very important Commissions might raise difficult problems
on some of these.
Mr. GARCIA-OLDINI (Chile) (Interpetation): I have already
explained on various occasions the difficulties experienced by the
small Delegations, and it seems to me rather strange that each time
when there is a question of this kind we are told it is absolutely
imperative to adhere to the schedule established, and our
possibilities are not taken into account. I think we should
adhere to the plan within the limit of our possibilities, and I think
when there is a conflict between schedules and our possibilities
the Schedule should be changed, and our possibilities only should
be taken into account, if we want to do good work; and furthermore,
I think that when such a change in the schedule is contemplated.
the Delegation should be informed in due course, so they can see
whether it is possible or not for them to adhere to that proposal.
Mr. GUTIERREZ (Cuba): We have had to-day a meeting of this G,
47 E/PC/T/A/PV/4
Charter Steering Committee and of the Working Party, and we
have almost come to an agreement as to how to handle this situation
and. the time-tables. I think that if we can ask our distinguished
colleage from South Africa to drop his proposal of discussing
this matter as a matter of fundamental principle, taking into
account that everything in life is relative - even the existence
of us - I think that this question could be settled at once: if
he is good enough to let this matter be discussed in the Sub-
Committee; and as the Report of the Sub-Committee is coming back
to the Executive Committee we would have a long discussion about
that.
I think that would be the most simple thing, because probably
to-morrow the two Steering Committees will find a way out of this
situation.
Mr. HELMURE (United Kingdom): I wonder if I might make a
suggestion which would help. I strongly suspect that the Delegate
from South Africa would not be prepared quite to agree with the
suggestion that has just been made, because I made it myself privately
just before, and he said "No!" very firmly to me; but I would like
on behalf of (if I might presume to call them so) the large Delegations
to assure the Chilean Delegation and other small Delegations that
we have our difficulties too. There seem to be an awful lot of
us, but it takes just as much time to get the right people at the
right place for the right meeting as it does in a small Delegation.
The specific suggestion I would like to make is that we
should stick to the business as arranged, for to-morrow. That
I think is a convenience to everybody: They have probably made
plans and got ready for it. That would give us two meetings of
Commission B to-morrow. Then on Friday morning - not to-morrow
morning - we should deal in this Commission with the South African E/PC/T/A/PV/4
48
proposal, and probably go on with Commission B in the afternoon.
I know it is very dangerous indeed to prophesy on these matters,
but I have been looking at the Amendments which have been suggested
for Chapter 6, which has to be taken in Commission B, and they seem
to me: to be neither so numorous nor so fundamental as those we
have been discussing this afternoon; and it is conceivable that
in three meetings Commission B would finish its work, especially
if everyone there were animated by a desire to get it done as
quickly as possible in order to keep to the time-table.
I believe that is an arrangement which would meet the
convenience of the greatest number of people, and if a meeting on
Saturday morning had to be arranged for a short time to finish
up the fourth part of Commission B's work, that would be the least
inconvenient re-arrangement. 49
CHAIRMAN: The Delegate of South Africa.
Dr. J.E. HOLLOWAY (South Africa): Mr. Chairman, if the
time for discussion has got to be rationed, then it should be
rationed so as to give the various Delegations an opportunity,
The difficulty now is that it has got to be rationed or otherwise
all Delegations, partcularly small Delegations, have got to be
put to a great deal of inconvenience. I am not prepared to
put other small Delegations, having a small Delegation myself,
to that inconvenience. The matter which I raised, I raised
at the first stage, because, as I said before, it affects a
very large number of paragraphs. I shall have further
opportunities of raising it. I had thought by raising it at
an early stage, so that on a matter of fundamental importance
the Conference can pronounce itself at an early stage, we would
save time when we got to those things, but I shall have an
opportunity of raising it again. I shall give up what I had
hoped was an opportunity of saving time, and I withdraw my
proposal,
CHAIRMAN: (Interpretation): I will ask the Delegate of
South Africa not to withdraw his proposal and to agree to
presenting his proposal on Friday morning.
Dr. J.E. HOLLOWAY (South Africa): I am prepared to
throw myself on the mercy of the court.
CHAIRRMAN: The Delegate of the Netherlands.
M. L. GOTZEN (Nether lands): Mr. Chairman, there is only
one thing I should like to ask Mr. Helmore. I really do not
see the difference betwee Committee B meeting tomorrow the whole
day and Friday afternoon and meeting tomorrow in the afternoon and
E/PC/T/A/PV/4
V. 50
V E/PC /T/A/PV/4
Friday the whole day.
Mr. J.R.C. HEKMORE (United Kingdom): Mr. Chairman, in one
or perhaps two sentences, this gives me an opportunity to take
the Committee inside the workings of a large Delegation. It is
difficult at twenty minutes to seven on Wednesday evening to
re-arrange one's plan in a large Delegation for halfpast ten on
Thursday morning, and it is very much easier to stick to what we
have been planning for--that is, to discuss Chaptar VI tomorrow,
and to give ourselves twenty-four hours in which to find all
members of our very large Delegation and to tell them that what
they thought was going to happen on Friday is not going to happen
on Friday!
CHAIRMAN: We all agree with Mr. Helmore's proposal, and
this Committee will meet again Friday morning at 10.30.
The Meeting rose at 6.45 p.m. |
GATT Library | cq665gm4035 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Fourth Meeting of Commission B held on Saturday, 31 May 1947. at 10.30 a.m., in the Palais des Nations, Geneva | United Nations Economic and Social Council, May 31, 1947 | United Nations. Economic and Social Council | 31/05/1947 | official documents | E/PC/T/B/PV/4 and E/PC/T/B/PV/3-5 | https://exhibits.stanford.edu/gatt/catalog/cq665gm4035 | cq665gm4035_90250069.xml | GATT_155 | 8,919 | 54,426 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL RESTRICTED
ECONOMIQUE 31 May 1947
ET SOCIAL
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
FOURTIH MEETING OF COMMISSION B
HELD ON SATURDAY, 31 MAY 1947. AT 10.30 A.M., III
THE FALAIS DES NATIONS, GENEVA
Hon. L.D. WILGRESS
(Chairman )
(Canada)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247).
NATIONS UNIES - 2 -
CHAIRMAN: The meeting is called to order. We shall
resume our discussion of the United States revision of Article 40.
The first speaker is the delegate from New Zealand.
Mr. G. LAURENCE (New Zealand): Mr. Chairman, the only point
I had in mind to raise at the time of the adjournment last night
was to ensure that this paragraph would not be referred to the
Sub-Committee before the first item on page 9 of W/132 had been
discussed by this Commission.
CHAIRMAN: The New Zealand delegate has proposed that, before
the United States proposal - revision of Article 40 - be referred
to the Sub-Committee, there should be a discussion of the United
Kingdom and French reservations regarding the submission of
written complaints on behalf of any affected person. Is that
right Mr. Laurence?
Is that agreed? If so, I would propose we should take up
this point now, and then return to the discussion of the proposed
revision of the United States of Article 40. The delegates of
France or the United Kingdom wish to discuss this point?
Mr. S.L. HOLMES (United Kingdom): I will ask my French
colleague to speak first. S - 3 - E/PC/T/B/PV/4
M. LECUYER (France) (Interpretation): I feel deeply
honoured by the gesture of my British colleague, who deferred
to me, especially as the amendment had been prepared by the
United Kingdom Dolegation and the French Delegation had
adhered to it,
In order to explain the matter fully, I should also say
that there was French initiative at the basis of this Article.
We considered that the intervention of private persons in
such complaints was rugrettable and that is the reason why,
in New York we suggested that private individuals should act
only with the assistance of their Governments.
This is a rather difficult legal conception, due to the
fact that the French word ``assistancec'' has no exact equivalent
in English legal terminology, although it has a very precise
meaning in French.
This is the reason why we gave up our amendment and
adhered to the British text, which says that complaints shou-ld
be lodged by States on their own behalf or on behalf of tho
injured parties.
Why did we envisage the deletion of direct intervention
on the part of private individuals or companies? The question
has two aspects: one is the legal aspect, and on this point
I shall be very brief because this is a delicate matter on
which I am not competent. We have here prominent lawyers
and I should run the risk of receiving from them remarks.
or lessons that should be taken in the sense of correction --
of what I say. I shall therefore only make a remark based
on common sense. P. -4- E/PC/T/B/PV/4
What do we intend to do? Do we intend to defend particular
interests, particular commercial practices, such as counterfeiting.
The reply is "No." Our intention is only to protect inter-
national trade and therefore we have to deal with a clause of
general interest and it is not a private individual who is in a
position to form an exact idea of what general interest is and to
defend it. This is the responsibility of governments and States.
I admit that the New York text provided that a complaint made by a
private individual should be examined by the Organisation with the
authorisation of the Government of which this individual is a
national, but it is not exactly the same thing. What would happen?
We all know - without casting any aspersions on administrations -
that it is sometimes rather difficult for a national administration
to resist certain particular interventions, for instance, on the
part of a powerful Company, and when a powerful Company asks some
minor official to defend certain interests it may be difficult for
that official to refuse the necessary visa or authorisation and he
'will think "Well, after all, let them take their chance." The
case will be. different if the Government itself takes the matter in
hand and submits the case to the Organisation because then the
Government's responsibility will be involved. Thus we will avoid
a multiplicity of ill-founded complaints and perhaps even certain
cases where there might be some attempt at blackmail.
There are also other reasons. It is, I think, also necessary
that the Government should be in a position to instervens in what
should be described as the subsequent procedure. Let me explain
this: The Organisation will carry ou investigations in various
countries, and in particular in the country of which the complainant
is a national. It will therefore be necessary for the Government
to be in a position to intervene and help in the investigation. It
is also possible that the national home-legislation should be re-
sorted to in that particular country, and that the Government P. - 5 - E/PC/T/B/PV/4
concerned should take action under that particular legislation.
For that reason too, it is necessary for the Government to be in a
position to follow the matter closely with the Organisation.
For these various reasons we on the French side must insist
that the matter be considered either by this Commission or by sub-
committee 2, and. we are of opinion that the Governments should be
absolutely compelled to intervene in the procedures, at all the
various stages of the procedures, on behalf of the party injured.
CHAIRMAN: Is there any other speaker?
M. STANISLAV MINOVSKY (Czechoslovakia) (Interpretation): The
Czechoslovakian delegation were always of the opinion that we should
not open the door to the possibility of private persons, represent-
ing private interests, presenting complaints and causing those
difficulties to governments, difficulties which may in oertain cases
be created for political motives. Therefore we support the amend-
ment presented by the two delegations.
Mr. S.L. HOLES (United Kingdom): Mr. Chairman, I would like
to say that I deferred to the French representative not only because
he has been present in New York but also because of his great know-
ledge which I think has been reflected in the remarks he has made.
I think it falls to me to say that the point is clearly a d ifficult
one. It has two aspects; one whether or not governmental authorisa-
tion of the putting forward. of the complaint is required, and the
second is, I think, a kindred point. The second aspect is whether
we should allow a complaint which originates with some private in-
dividual or enterprise to be explained by the private individual or
enterprise in person.
I would myself feel that the matter should be capable of solution
by subcommittee 2; but, in general, I have of course list ened with
the greatest respect to remarks by our French colleague which I wouldd
say reflected very closely the course of the discussion at New York.
as reported by our own representative there. - 6 -
E/PC/ T/B/PV/4
CHAlRMAN: The delegate of China.
M. C.E. CHEN (China): Mr. Chairman, .the Chinese delegation
also wished to associate themselves with the amendment made by the
United Kingdom delegation an: supported also by the French delegation.
We think it is simpler for the Organization to receive complaints
direct from Members only, and not from any individuals concerned.
That would simplify the work of the Organization.
Another point is that it would avoid any risk of
unnecessary complaint by indlividuals, because a given action may
affeot private individuals to different degrees, and it is better
to have the members, who have the jurisdiction of the individual
business enterprises or individual processes, to consider the
complaint first. Then, after due consideration, they would decide
whether any complaint should be subcitted to the Organization or not.
.another reason is that since complaints are likely to be made
in English and French, if individuals are allowed to make
complaints it would be much easier for some countries to make
complaints very frequently and it may be very difficult for other
countries to have an equal chance, so that in order to give all the
Member countries an equal opportunity to submit complaints, the
Chinese delegation feels it is better to have it done either on
the Members own behalf or on behalf of business organizations or
persons within the jurisdiction of a given Member.
CHAIRMAN: The delegate of the United States.
MR R.P. TERRILL (United States): Mr. Chairman, it might be
well if I recall some of the history of the evolution of this
particular point.
In the original draft Charter that the United States suggested
for consideration in London, the idea was expressed that it should be left to the autonomus decision of each country as to the
procedure it would establish for the submission of complaints on
the part of its nationals, as well as those that it submitted on
its own hehalf. That is to say, a Member could require that its
nationals file no complaints on their own behalf at all, either
through the government or directly themselves. That is, if a
Member so chose, it would be the sole agency in that country to file
complaints.
On the other hand, some countries might feel that they wish
to merely authorise the complaints of nationals, that is, take no
particular position themselves in a given case. Still other
countries might feel that their nationals could, file directly with
the Organization if they chose. G -8- E /PC/T/B/PV/4
At London the wording was somewhat altered to provide for
a uniform procedure on the part of all countries. The wording
in the London text as i recall it at the moment was with the
permission of the Member conce'-ned."; that is to say, the Member
Government whose nationals were complaining would have to permit
them to file a complaint.
We came to New York and the further suggestion of several
Delegation, most notably the Delegations of France and Belgium;
and also I thought that with the concurrence of the United Kingdom
representative we changed "permission" to authorise". a slightly
more formal word.
Now we have before us a proposal to go still further in the
direction of making every complaint to the Organisation a matter
of formal Governmental action. The discussion this morning would
seem to indicate that various Delegations would consider this to
be a rather unrealistic, formal sort of matter, and one which
does not have, perhaps, very much substance.
I think, Mr. Chairman, that the United States Delegation
would regard this point as really fundamental to the entire
character of the procedures; and the machinery provided under
Chapter VI for the receipt and settlement of complaints. As we
see the matter, Mr. Chairman, the suggested. Amendment would force
each Government to take a position on each complaint before it was
submitted. That would require that in each country an investigation
be carried out and a determination would be made with each
Government before it submitted the point to the Organization.
The complaint, i n other words, would be a very serious
matter. It would. in effect constitute, a charge against another
Member of a breach or violaton of the Chaster.
That is precisely what we have sought to avoid, and that we
had agreed upon generally on the earlier and the present formulation 9
E/PC/T/B/PV/4
of the text on this point. We feel that it would be, therefore,
a very serious matter if this Amendme-nt were found to be
acceptable; and, as a matter of fact, one would hardly need the
Organisation at all, if each Government carried out an investiga-
tion of its own before it submitted a complaint.
Let me recall to you that before a Government could make up
its mind conclusively on the final merits of a complaint as to
whether it was interfering with world trade, etc., it would have
to consult with other Members and go through a very long procedure,
because frequently adequate information is not within the
possession of any single Government.
We feel, therefore, that such a requirement would stall the
machinery that we have now envisaged in Chapter VI; that it would
make it cumbersome, slow and ineffectual, and would probably
destroy the meaning and the efficacy of this Chapter. Speaking
on the other side of the question very briefly, the present text
provides adequate protection against frivolous, malicious,
unwarranted, or politically inspired complaints.
There are two steps in the procedure which must be taken
before an investigation is conducted by the Organisation. Those
steps are:
First, that the Member must authorise the complaint. That
I is to say, the Member Government must be convinced that the
complaint is justified. It assumes, therefore, some measure at
responsibility for the complaint in question. Indeed, of course,
if the Member itself is complaining, it assumes full responsibility
I for its complaint. I was suggesting principally a complaint which
originated with commercial enterprises within the jurisdiction of
a Member.
The second step which would guard against malicious or G
- 10 - E/PC/T/B/PV/4
unwarranted complaints is the screening procedure set forth in
Article 40 in some detail. That is one of the functions of the
Organisation, to decide whether in the case of any given complaint
it is of such a character that an investigation should be made.
as our talks have proceeded in London, and then at New York,
I think we have all come to place more and more emphasis on this
screening procedure, and we have now provided for it rather fully,
and, in the re-drafted text of Article 40 which the United States
has laid before you, we have set this screening process up by
itself and in some detail.
We would therefore feel, Mr. Chairman, that the present text
and the proposed revision of Article 40 as su.-ested by the United.
States, takes care of all of the possible objections that have
been raised this morning to the present formulation, which is that
complaints originating from business entities within a member
country shall be authorised. by that Member; and our understanding
of that is that a Member need, not make up its mind to make any
final decision as to whether there has been a violation of the
Charter, but it merely must decide whether the complaint appears to
be justified. The function of the Orgnisation is to determine
whether there has been in a given case harmful effects on world
trade. I submit that this is the entire purpose of the
investigation, and, that Members should not be required to take a
position -n the matter before they submit a complaint charging
another Member as in effect violating this Charter. - 11-
E/PC/T/B/PV/4
CHAIRMAN: Il tnere are no other Delegates who wish to
speak on this question, I would propose that this matter be
referred, to the sub-Committee 2 , who will, be able to take
into account the observations of the Delegate who have spokenr
this. morning. on this.question. Is that agreed?
(Agreed)
I would now like to ask the Commission if we, are in a
position to refer the United States revised text of Article 40
to the sub-Committee or are there any other Delegates who
wish to speak before it is referred to the sub-Committee?
The Delegate of Belgium.
V. - 12 -
E/PC/T/B/PV/4
M. THILTGES (Belgium) (Interpretation): The remarks of the
Belgian and Luxembourg delegations on the draft Article submitted
by the United State delegation will be brief, because the French
delegate yesterday has already spoken on a number of points and I
shall not enlarge on it. I should only like to say a few words
in connection with the new paragraph for Article 4C which appears
at the top of page 8 of the English text of document W/132.
This is, in our opinion, a substantial change which extents
the scope of the text agreed in London, considerably. It is said
in the new draft that, if the Organization determines that the
practices in question have had, or are about to have, the effect
described in paragraph 1 of Article 39, it shall request each
member concerned to take every possible action to prevent the
continuance or recurrence of such practices. This new text raises
a number of objections. First of all I have one remark of detail
to make. The substitution of the word "determination" for the word
``findings", is not, in our opinion, in conformity with the proper part
to be played by the Organization. What is more important is the
commitment to prevent the continuance or recurrence of such
practices as substituted for the former wording "the practices".
The comments by the United States delegate on this change explain
that this is, in fact, a considerable extension of the text agreed
in London. It means that they cover similar practices to those
which are the subject of an investigation. I should like to recall
In this connection that the Belgo-Luxembourg amendment referred to
an abusive use of such practices, and for my part I cannot agree
with such an extension of the meaning. I would like to make now
another remark which is, perhaps, less important, in connection with
the inclusion in the text of the words ``recurrence" which have not ER
- 13 - E/PC/T/B/PV/4
been adopted in London and which have only been adopted in New
York with some reservation. But I will reserve my right of
speaking on this matter in the Sub-Committee because it is
connected with the Czechoslovakian amendment which has also been
referred to the Sub-Committee..
M. STANISLAV MINOVSKY (Czechoslovakia) (Interpretation): Mr.
Chairman, the Czechoslovakian delegation considers that considerable
parts of the American proposal are useful and acceptable. However,
with regard to point 2(c) of tee text which, in the American draft,
is number 9, we are not of the opinion that the words "the
publication of such reports or any portion that may be withheld,
if indeed the cause is justified, ``should'' be deleted as is proposed
by the United States delegation. In fact, this clause which it
is proposed to delete does not contain any obligation for the
Organization. It simply reserves the right of the Organization to
withhold the publication of reports or any portion thereof, if the
Organization considers that this cause is justified.
Therefore, we think that the Organization should not be
deprived of this possibility and that these words should be
maintained.
Mr. F.A. McGREGOR (Canada): Without making any extended
comments, Mr. Chairman, I would like to record our agreement with
the Czechoslovakian position on this particular point,
Dr. P. LEENDERTZ (Netherlands): Mr. Chairman, I would just
like to make one remark. I am fully in agreement with the remarks
made by the Delgian delegate. I only want to add that his ER
-14 -
E/PC/T/B/PV/4
objection to the word "determination" might be extended to many
points where that word is used, and I do think that that word
might cause a lot of misunderstanding because it seems that, in
the ears of the American and English gentlemen, the word has a
slightly different meaning than in the ears of those who do not
speak the language, and I only want to recommend to the Sub-
Committee, that it gives its attention to the meaning of this
word in the Article. E/PC/T/B/PV/4
CHAIRMAN: The Delegate of the United States.
Mr. Robert P. TERRILL (United States); Mr. Chairman,
I want to report to the question that has been raised concerning
the proposed deletion in Paragraph 9 of the suggested U.S.
re-draft of Paragraph 2(c) of Article 40, concerning the
withholding of reports or portions thereof by the Organization.
The record will show that yesterday the United States
D-legation put forward two reasons why this should be done:
first, on the grounds that the present clause would be
ineffectual; secondly, that it would be undesirable, and
-finally we pointed out what the real substitute f'or this
clause would be. Several Delegations have, addressed them-
selves to this point this morning. I have heard no compelling
arguments, except that the clause should be retained. I might
therefore just extend my previous remark to say this: as you
all know, this Charter was widely discussed in the United States
by the public, by various organisations and before the United
States Senate. T..e existence of this particular clause
aroused considerable apprehension and therefore, unless there
were real compelling reasons for including it, we have been
persuaded by the public reaction that it should be deleted.
Mr. Chairman, I do not believe it is sufficient merely
to say that in the light of superior wisdom - which has not
been expressed - we should retain this clause. If there wore
compelling reasons, which I confess I do not know at all, then
of course we would be perfectly willing to listen and to give
them full consideration.
CHAIRMAN: The Delegate of Czochoslovakia
- 15 -
S S E/PC/T/B/PV/4
Mr. STANISLAV MINOVSKY (Czechoslovakia) (Interpretation):
Perhaps, Mr. Chairman, the text could be changed so as to make
it clear that it should be applied only in exceptional cases.
we could find a form of words to indicate that it is only
when some vital interest of a .Member State are involved that
the Organisation would be empowered to withhold. publication,
CHAIRMAN: I think that is a matter which might be
discussed by Sub-Committee 2.
If there are no other speakers wishing to comment on this
particular proposal I think we are now in a position to propose
that it should be referred to Sub-Committee 2, who will take
into account all the observations which have been made in regard
to the United States proposals Is that agreed?
(Agreed).
Al the outset of our discussion on Article 40 it was
agreed that the other proposals relating to this Article should
be referred to the Sub-Committee without further discussion in
the Commission.
I wish to bring to the attention of the Commission an
oversight on the part of the Secretariat in drawing up Document
W.132. An amendment proposed by the Czechoslovak Delegation,
and given in Document E/PC/T/W/1I9, was not included in the
list of proposals relating to Article 40. A note regarding
this proposal should be made on Page 9, between items 4 and 5.
I would also suggest that this amendment proposed by the
Czechoslovak Delegation be taken into account by the Sub-Committee.
Are there any objections?
(Agreed). S - 17 - E/PC/T/B/PV/4
Before we proceed to Article 41 I would like to make a
reference to certain amendments which were submitted' after the
deadline for the submission of amendments with regard to.
Chapter VI. One of these amendments is that contained in
Document W.138, submitted by the Delegation of the Netherlands,
and when we are considering Paragraph 3 of Article 39 I propose
that this should also be taken into account by the Sub-Committee.
Mother amendment filed by the Netherlands Delegation after
the deadline for submission of amendments is given in Document
W.139. This relates to Article 42 and Ipropose that when
we come to Article 42 we should also propose that this be
referred to the Sub-Committee.
The other amendments which have been submitted after the
deadline include an amendment proposed by the Belgian Delegation
in relation to Paragraph 3 of Article 39. This is given in
Document W.130 Rev.1. This also will be referred directly to
the Sub-Committee.
I also understand that the Chinese Delegation have
submitted an amendment to Paragraph 1 of Article 39. This
also will be referred directly to the Sub-Committee.
Are there any objections?
(Agreed).
We will now pass onto Article 41. - 18 -
P E/ PC/ T/ B/PV/ 4
Mr. F. McGREGOR (Canada): Before we leave Article 40,
May I refer very briefly to the proposed amendment at the bottom
of page 8, paper W/132 - the word "as" substituted for a long
phrase. The thing that has troubled some of us for a long time
is the very frequent repetition throughout several Articles of the
Chapter of the sixteen-word phrase "which have or are about to
have the effect described in paragraph 1 of Article 39".. A very
substantial reduction in the number of words can be effected if
the single word "as" is used instead of the greater -part
of the long phrase. Not only would it save
typing and paper but the meaning would be more accurately conveyed.
The long phrase refers only to the effect described in paragraph I
of Article 39, but that is only one condition which must be ful-
filled before commercial enterprise would properly be subject to
investigation; the type of practice, the nature of the commercial
enterprise, the scope of its control, are also important conditions
and these would be referred to if we would use the words "as des-
cribed in Article 39". I have not actually counted the number
of words which would be saved by this amendment, but Itake it that
the nett saving would be approximately 85 words. Our other
suggestion is to eliminate the words "paragraph 1" (at the end of
the same clause ) and thus refer to the whole Article which des-
cribes in its second paragraph the nature of the enterprises affected,
the extent of their control, the type of practice, and the effects.
CHAIRMAN: I am sure that if the sub-committee reduces the
number of words in Chapter VI they will earn the gratitude of all
members ofthe Commission.
Mr. W. THAGAARD (Norway): Mr. Chairman, I propose adding the
words "in international trade "to paragraph 1, sub paragraph (a) (ii)
and to paragraph 2, paragraph (b). We have the words "in - 19 -
E/PC/T/B/PV/4
international trade" in paragraph 1, subparagraph (a) (i). We
ought to put them also in (ii) in the same sub-paragraph and in
paragraph 2, sub-paragraph (b).
CHAIRMAN: The delegate of Norway has made a proposal with regard
to Article 41 which we are now discussing. It is Article 41?
Mr. W. THAGAARD (Norway): Yes.
Mr. A.P. van der POST (South Africa):. But I have still something
to say about Article 40 - a question of procedure, arising out of
Mr. MoGregor's remarks.
CHAIRMAN: Mr. McGregor was somewhat out of order in that we
had already decided to remit -rticle 40 to the sub-committee. But
if you have any particular comment to make we will hear it now.
Mr. A.P van der POST (South Africa): It is not a question of
altering principle. It is merely that I would suggest for the
consideration of the Commission and the sub-committee that Article
40 deals with procedure in respect of complaints and so forth in
fair detail, and I want to suggest for consideration that in the
body of the Charter we should not enter into details about procedure.
That would more suitably be dealt with in an annex, In the main
Articles of the Charter we should really deal with principle;
principle of right to complain, of right to be heard, and the obliga-
tion to report; but the details of procedure should be embodied in
a schedule, a schedule to this particular Chapter, are not as part
of the Chapter.
That is all I wanted to suggest for the consideration of the
sub-committee, Mr. Chairman. - 20 -
CHAIRMAN: The delegate of South Africa is somewhat late in
making this suggestion with regard to article 40, but I am sure his
comments will be taken into account by the sub-committee. I am
afraid Ioan allow no further discussion to article 40, as we have
already passed on to article 41.
Are there any comments with regard to the suggestion made by
the Norwegian delegate?
MR. S.L. HOLMES (United Kingdom): Mr. Chairman, I have a
small point in regard to article 41, paragraph 1(b) in the United
States draft. This reads at the moment, that the organization
is authorised, among other things, "to request information from
Members in connection with such studies". These are the studies
relating to restrictive business practices.
It has occrred to us that perhaps it would be wrong to confine
one's sources of information solely to Members, and that perhaps
consideration should be given to the question whether one might
not also usefully ask for information from non-Members, or even
bodies which are not solely governmental.
In this connection I would like to refer to the Commodity
Chapter, Chapter. VII of the Draft-Charter, Article 48, paragraph 2
where it suggests in connection with commodity Study Groups that
non-Members, having a similar interest, may also be invited to
take; part in the work of such a commodity Study Group.
I only make the suggestion so that it may be considered, if
you agree Mr. Chairman, by the sub-committee which will be looking
at this passage.
CHAIRMAN: The study of the proposed revision of Article 41
submitted by the United States delegation; and also the suggestions
which have been made this morning by the delegate of Norway and by
E/PC/T/B/PV/4 the delegate of the United Kingdom do not, I think, give rise to
questions of substance which need. to be discussed in fall
Commission. Therefore, I am wondering if the Commission could not
agree that this proposed revision submitted by the delegation of
the United States, together with the suggestions of the Norwegian
and United Kingdom delegates, be referred to the sub-committee
without further discussion in this Commission.
The delegate of New Zealand.
MR. G. L. URENCE (New Zealand): Mr. Chairman, there is a
question which I think may be considered in respect of article 41
on the lines suggested by Mr. MoGregor yesterday.
I do not want to go into the question again of the merits or
otherwise of the registration of cartel agreements, but in re-reading
Chapter VI in the light of the discussions yesterday on the merits
or otherwise of registration of cartels, it occurs to the
New Zealand delegation that in certain cases there may be merit in
having something in the nature of a census taken of International
agreements in respect of particular commodities,
Yesterday, the registration of cartel agreements was objected
to on general grounds, but I think we can all appreciate that
different commodities have different standards of singnificance in
international trade, tand there are a great number of commodities
that do not enter into international trade at all, and it seems to
us that there may be occasions when Members may be justified in
asking the Orgnization to consider the question of having cartel
arrangements registered or, indeed, in connection with investigations
that the Organization becomes obliged to carry out as a result of
complaints, there may be merit in asking for a census in cartel
arrangements.
E/PC/T/B/PV/4 - 22 -
Now, in the time that has elapsed since yesterday, we have not
had the opportunity of considering just where this question could
best fit into the Chapter, if it did find favour with the
Commission, but I would ask the indulgance of the Commission to
consider whether or not it would be reasonable to oblige the
sub-committee to take into account representations which may be
made on the lines of the case that I have stated E/PC/T/B/PV/4
CHAIRMAN: We had a very full discussion yesterday on the
of
registration/agreements and a vote was taken which I interpreted
to be a rejection of the Amendment proposed by the Brazilian
Delegation.
The suggestion of the New Zealand Delegation is along
somewhat different lines, He is proposing that the Organisation
should endeavour to compile a census of agreement. That
suggestion could be examined by the Sub-Committee if the Commission
thought fit, but I would not want at this stage to reopen a debate
on the general question of the registration of agreements.
Any other comments on Article 41?
Mr. MONTEIRO DE BARROS (Brazil) (Interpretation): Mr. Chairman,
the Brazilian Delegation agrees that the examination of Lrticle 41
should be referred to the Sub-Committee, but pr<-Qrves its rights
to present Amendments in regard to Article 41, especially after
taking into consideration the proposal just made by the New Zealand
Delegate, and after discussing the matter with the New Zealand
Del egat ion.
CHAIRMAN: The Brazilian Delegation has the right to submit
the Amendment at the start of the discussion in the Commission, and
it will be in order for them to submit an Amendment on this question.
Other Amendments will be referred directly to the Sub-Committee,
Any other comments?
Mr. GARCIA-OLDINI (Chile) (Interpretation): Mr. Chairman,
I would be grateful if the United States Delegate would kindly
explain the meaning of the Amendment rewarding paragraph 2(b).
In fact in paragraph 2(b) the New York text provided for
conferences for the purposes of general consultation; and in the
- 23 - G
- 24- E/PC/T/B/PV/4
Amendment which is now before us, the word. "consultation" has
been replaced by the word "discussion".
Now I think that the word. "consultation" had. a wider scope
than the word. which is here before us, and I would like the
United States Dclegate to explain the exact meaning of this
alteration.
CHAIRMAN: The Delegate of the United. States.
Mr. TERRILL (United States): The reason that that was done
is explained in the comment which was supplied in Document TW/122
on page 11.
The word. "consultation" was used in our Amendment of
Article 40, the preceding Article, to describe a procedure under
which a Member could consult directly with other Members regarding
a particular restrictive business practice. That amendment appears
as paragraph 1 of Article 40. "The Organisation shall arrange, if
it considers such action to be justified, for particular Members
to take part in a consultation requested by any Member which
considers that any practices exist which have or are about to have
the effect described in paragraph 1 of Article 39.
It would. have been confusing, therefore, to use this
word "consult", or "consultation", again, in another and quite
different context, because the sort of conference that is proposed.
in Article 41 is not a contentious conference at all; and, in fact,
it is quite a different sort of proceeding than we have in
Article 40, under points of Procedure. In the latter case, namely,
under Article 41, we might envisage the following situation as an
illustrati on.
A commission on business practices has stated a certain - 25 - E/PC/T/B/PV/4
problem which is of general significance to all, or most, of
the Members, and it formulates, let us suppose, a uniform clause
to be inserted in all national laws regarding-a certain subject.
It might then call for a General Conference of Members to
consider and. discuss this proposal, and if they favoured it,
to recommend it either directly to the Members or recommend it
to the Economic and Social Council for submission to the Members. V - - E/PC/T/B/PV/4
Now, that kind of a Conference is quite different from the
cosultative procedure under Article 40, and if the word
"discussion" is too narrow, as it may well be, then we should
broaden that in accordance with the suggestion of the Chilean
Dolegate.
CHAIRMAN The Delegate of Chile.
M. E.E GARCIA QLDIMNII (Chile) (Interpretation): Mr. Chairman,
I am grateful to the Representative of the United States, who
has to a considerable extent clarified the question now.
However, perhaps through some inaccuracy in the interpretation -
and I am sorry to be obliged to say so with regard to the
interpreter - the Delegate of the United States may have had
the impression that I asked him why he proposed to delete the
word "consultation". In fact, the deletion of the word
"consultation" is adequately explained in the document referred
to.
The point of my question was to ask why it is proposed to
substitute for the deleted word the phrase generall discussion".
Usually general discussion is followed by a particular
discussion, and, in any case, it leads to conclusions, whether
these conclusions take the form of recommendations or something
else. Now, this text which says "general discussion" may
create the impression that what is meant here is a sort of
general and non-comarcial conversation, which we can observe
in several instances, when various people meet and discuss
political, literary or philosophical matters, and do
not try to formulate any conclusions, perhaps because thay
are afraid that the views expressed are too widely divergent.
This, of course, is a procedure and a result which we should
like to avoid, and we are certain that this is the intention
- 26- V. E/PC/T/B/PV/4
of all the Delegates. Therefore, I should like to request
the representative of tho United States ,who widbrtoo1 to
change the wording, to go a little deeper into this question,
and perhaps to consider a procedure and a wording which would
ensure that these discussions should not be without conclusions.
CHAIRMAN: I am sure the point that we are discussing
now is largely a question of drafting, and the sub-Committes
will take into account the views that have been expressed by
the Delegate of Chile.
Any further comments on points of substance in relation
to Article 41?
-27 - ER
If not, I propose that this Artile 41 together with the
proposed revision and suggestions which have been made by the
delegates of Norway and the United Kingdom. and the delegate of
Chile, be referred to the Sub-Committee for further study. Are
there any objection? Carried.
We now pass on to Article 42. My study of this Article has
led me to the conclusion that the main points of substance arise
out of the proposed rearrangement and reformulation of this Article
submitted by the delegation of the United States. The other
proposals are largely matters of drafting and I would, therefore,
propose that we follow the same procedure that we did with
Article 40, and only consider, in this Commission, the proposed
revision submitted by the Lelegation of the United States, and the
other proposals shall be referred to the Sub-Committee without
further discussion in this Commission. Any objections? Carried.
Will the delegate of the United States wish to explain the
purposes of his proposed revision?
Mr. Robert P. TERRILL (United States): Mr. Chairman, I
as
shall speak only very briefly. We have pointed outs/in Article 40,
the improvement of the arrangement of the Art cle so that it would
be clear to people who had not attended the succession of
Conferences that we have had, and that we will continue to hold,
on the Charter, as to the precise meaning. It has been a very
difficult Article to follow, and almost all of the changes, we
feel, are those of drafting. There are also a lot of other
improvements that will suggest themselves to other delegates, and
that can be considered in the Sub-Committee. ER
- 29- E/CP/T/B/PV/4
There are only, I think, two things that I would like to point
out, particularly in order that my colleagues might not think they
are falling into any traps as they felt yesterday, or that this is
an ominous revision. The first change occurs in paragraph 1 as it
Is presently drafted. The change is as follows. "Each Member
shall take all possible steps by legislation or otherwise, to
forbid and prevent, within its jurisdiction., practices." Formerly
the obligation was to ensure. It seems to us that it would be
much more meaningful if we were to reflect the general obligation
of members, that is set forth in Article 39 paragraph 1. There
the word "prevent" is used. We believe, however, that in
connection with implementing that obligation, members should give
notice to those who are affected within their jurisdiction, that
henceforth these practices will not be permitted. In other words,
they should forbid the practices by due notice in accordance with
their own legal or governmental system. In the case of the United
States, that would take the form of law. In other cases it might
consist of an announcement on the part of the government. We
feel that that change is in the interest, certainly, of clarity,
and giving a little more backbone to what is intended by Article
39 paragraph 1.
Mr. Chairman, would you prefer that I go on to the other
changes that I have? The other point that I would like to call
attention to is in connection with paragraph 4. There we have
inserted a word which may, or may not, have a particular
significance to other delegations. "Each member shall take
fullest account of the Organization's determinations, requests and
recommendations made on the basis of its investigations and determine
and initiate apropriate action in accordance with the member's ER
- 30 - E/PC/T/B/PV/4
system of law and economic organization ... etc." The words
"initiate" are added to indicate there that there is some
obligation to initiate the appropriate action. In the event
that no action is believed. appropriate, then of course the
member is perfectly free not to take it, and the following
paragraph 5 provides for just that contingency. I believe
those are all the points I want to mention, Mr. Chairman. S - 31 - E/PC/T/B/PV/4
CHAIRMAN: The Delegate of the United Kindom.
Mr. S.L.HOLMES (United Kingdom): Mr. Chairman, it so
happens that on both the points to which the United Sates
representative has called attention we should have felt it
necessary to make some comments, because they seem to us
to be more than points of drafting and with your permission
I should like to refer very briefly to these two points.
If the first place, we find it impossible to agree that
the words ``forbidd and prevent" are better than the word
"ensure", even having regard to the explanation given by
the United States representative, orally and in this paper.
I think it is a great pity to tamper with the text
unnecessarily - I am sure everyone would agree there; and
would not everyone agree that there can really be no more
lawful expression than the word "ensure", which means, to
make certain. Unless there is some really good reason for
altering this , we would press that the existing text remains
at it is, on the grounds that it is really stronger end not
weaker than the alteration which has been suggested.
Secondly, as regards Paragraph 4, it seems to us
illogical to make the alteration proposed unless you go a
little further, and, if this amendment is pressed, we should
have to suggest that the whole expression "determine and
initiate appropriate action" be expanded; otherwise we reel
that there will be the danger of misconception or a contra-
diction. We should have to Propose something like this:
"decide on and initiate the appropriate actions if any, to
be taken.'' -32 -
S E/PC/T/B/PV/4
I felt it was desirable just to make these two points,
because they were ones which seemed to us to be just a little
more than mere drafting alterations,
CHAIRMAN: Are there any other comments on Article 42?
If not, I propose that the United States' proposed revision
of Article 42, together with the other proposals included in
Document .132 , be referred to the, Sub-Committee for further
study. Are there any objections?
(Agreed).
Article 43 - there are no observations in Document W.132;
therefore I think we can take it that the text as given in the
New York Draft is approved for this first reading.
The same applies to Article 44. Are there any objections?
(Agreed).
We now come to the Report of the Sub-Committee, who will
propose the inclusion of Article 41A - Procedure with respect
to Services. Dues any Member of the Commission wish to speak
to this proposal?
Mr. W. THAGAARD (Norway): I think we should have some
more time before we enter into a debate upon this matter.
Personally I am not prepared to speak on behalf of the
Norwegian Delegation, because the Members of the Delegation
only received this document this morning and therefore we have
not had time to discuss it in the Delegation. It is a
proposal whichcalls for examination. It raises a question of
principle, The New York Draft is shaped in relation to goods
only; it refers to production, imports, exports and purchase
and sale of goods. J. E/PC/ T/B/PV/4
MR. W. THAGAARD (Norway) (Contd.): We are now to widen the
scope of Chapter VI to include services of trasportation,
insurance, banking and other services and tho question arises as
to the consequences for other parts of the Charter.
It seems to me that it is necessary to have this matter
thoroughly studied and clarified before we take any decision
concerning the proposal. of the new article 44 - A. I suggest we
have some more time.
CHAIRMAN: With regard. to the comments of the Norwegian
delegate, I would point out that this is a report of the sub-
committee, which hlas been chartered by this Commission to find a
solution to these particular difficulties, which is confronting
the Commission. - This report was circulated yesterday at our
meeting, and therefore it has been in the handsof members not quite
twenty-four hours, but at least over night.
However, in view of the prop-sal of the Norwegian delgate,
I feel I must putit to the Commission that this report be not
proceded with now, but held over to a later stage of our discussion.
DR, G. GUTIERREZ (Cuba): Mr. Chairman, I agree that the
delegate from Norway, had no opportunity to give -further
consideration to the document, When he has this opportunity, he
will realism that this compromise document does not bring to the
Charter the whole matter of transportation or banking or other
services, but simply establishes very broad principles that when
matters arise, as contamplated in paragraph . of Article 39, they
might be taken to any of the specialised international agencies
-that have already been astabished and that if it is a case of
knowing the agency established, the Organization will act in the - 34 -
J . E/PC/T/B/PV/4
form provided for in Article 61 of the. Charter already. It is not
a new thing. It is not a rabbit that via have brought out of our
hat, it has come out with the co-operation of all assenting opinions,
so I think that as soon as we have an Opportunity to go into this
side of the question, it may be that we will find it very simple.
CHAIRMAN: The delegate of India.
MR. G.L. MEHTA (India): Mr. Chairman, I would like to
associate myself with what the delegate from Cuba said just now.
We entirely -agree with the Norwegian delegate that we want
time to study this, and that it might be considered at a later
stage. But I thought that a very fair compromise between the
differentt .points of view had been arrived at by the sub-committee,
and I sincerely hope that after further examination, the Norwegian
delegate will also f all in line and a agree with this particular
amendment that has just been suggested.
When Mr. Holmes of the United Kingdom said:in the beginning
that he hoped. to produce a rabbit out of the hat I was rather
soeptical, I must confess, because I did not see whether there
was any hat at all there, but as members have seen, nobody was
talking through his hat in this matter, and something much more
than a rabbit has been produced.
In fact, Mr. Chairman, you yourself have commented on the
procedure and report of this sub-committee, and, said that it is an
example that should be followed. I therefore hope that this
amendment will be accepted in due course.
While I congratulate my friend from Cuba on behalf of our
dalegation for the initiative that he has taken, may I say, Sir,
with due modesty, that this question of the inclusion of services
was raided at the London meeting by the Indian delegation, and
I think we are also entitled to express satisfaction at the result
that has been achieved. G -35- E/PC/T/B/PV/4
CHAlRMAN: I take it that is the sense of the Commission is
with the proposal of the Norwegian Delegate that further
consideration of this Report be deferred. I would therefore
propose we take up: the Report of Sub-Committee 1 when we receive
the Report of Sub-Committee 2.
Any objections? Carried.
We now pass to Article 45.
I would like to ask the Delegate of the United Kingdom if
he wishes to proceed with their proposed Amendment to Article 45?
Mr. HOLMES (United Kingdom): Mr. Chairman, I do not think
I shall be offending anybody if I say at this stage in our
proceedings that I am quite unable to withdraw the Amendment we
propose to Article 45. Had the proposed Article 44(a) been
accepted. here and now, the position might have been quite
different; but at the moment I must ask that the Amendment remain
on the paper.
CHAIRMAN: Under those circumstances we will defer further
consideration of the United Kingdom Amendment to Article 45, and
also the Chilean re-formulation of paragraph 1(c) of Article 40
mentioned. on page 14 of LW/132 until after the Report of Sub-
Committee 1 has been considered.
The Chilean re-formulation really relates to Article 45 of
the Draft.
Any objections?
I would also propose that the proposal of the Delegation of
Australia for re-arrangement of Article 45 and the proposal made
by the Canadian Delegation be referred to Sub-Committee 2.
CHAIRMAN: The Delegate of South Africa. E/PC/T/B/PV/4
Mr. VAN DER POST (South Africa): Mr. Chairman, I do not want
to detain the Comrmission unnecessarily, but I should be glad if,
perhaps, for the guidance of myself and the Committee generally,
one point might be clarified, or that somebody could give me an
explanation on that.
I said yesterday, when I supported the Canadian Amendment to
article 39, that it had removed certain difficulties I had had in
connection with Article 39; but in our Delegation there are some
who are not quite satisfied about the implication of 39, particularly
as re-worded. Now we have in most countries certain marketing
legislation concerning agriculture, under which certain powers are
given to farmers' organisations, and so forth, in marketing. I
will quote a specific case. In your re-draft of article 39 - the
Canadian re-draft - there is reference to substantial control or
influence of trade among two or more countries in one or more
product. The exact meaning of the words "control or influence of
trade among one or more countries" - the implication of that - is
not very clear to us.
We nave, for example, a Citrus Control Board, which is the
sole marketing body for South African oranges. It sells to overseas
markets and mainly in the United Kingdom, and to some extent in
Scandinavian countries, and on the Continent; and, of course, in
south Africa. Now the argument has been produced in our
Delegation that the South .African Citrus Board has a substantial
control in two or more countries, namely, its own and the United
Kingdom; and that, therefore, this whole Article or Chapter
would apply in such a case. I am inclined to think it. would not
apply to any of the organisations mentioned in Article 31, and
I shall be glad, perhaps, if somebody could enlighten us on that
point, as otherwise we would have to consider legislation for
submitting an Amendment to Article 45.
G. - 37 -
V. E/PC/T/B/PV/4
CHAIRMAN: The Delegate of Canada.
Mr. F. A. McGREGOR. (Canada): Mr. Chairman, may I
suggest that even though the sub-Committee will now be
suffering from a burdensome surplus -- such a surplus as will
make it necessary for them to work on Sunday and every night --
it would be desirable for that-sub-Committee to take into
consideration the references made by the Delegate of South
Africa, and if it is found that such an Organization as he
has suggested would be wrongfully included, then to consider
some amendment to article 45 and submit it with its report.
Mr. A. P. van der POST (South Africa): That satisfies
me, Mr. Chairman, thank you.
CHAIRMAN: Are there any further observations? The
Delegate of Brazil.
M. Monteiro de BARROS (Brazil): (Interpretation): Mr.
Chairman, I would like to make just one remark on Document
E/PC/T/SR.2 on page 5. It is mentioned in the French text
that we made a reservation against the inclusion of "private
enterprises''. This should, of course, be "public enterprises".
The English text is correct.
CHAIRMAN: The correction requested by the Delegate of
Brazil will be made in the French text. Are there any further
observations? (Pause). Then we have come to the end of
our first reading of Chapter VI. We will resume the discussion
on Chapter VI in Commission B after we receive the report of
sub-Committee 2, at which time we will consider the reports
both of sub-Committee 1 and sub-Committee 2.
I wish to thank the Members of the Commission for having
co-operated with the Chair in enabling us to get through our
work in the four days allotted to us. The Meeting is adjourned.
The Meeting adjourned at 1.15 p.m. |
GATT Library | xq634mm2664 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Nineteenth Meeeting of the Tariff Agreement Committee held on Saturday, 13 September 1947, at 10.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, September 13, 1947 | United Nations. Economic and Social Council | 13/09/1947 | official documents | E/PC/T/TAC/PV/19 and E/PC/T/TAC/PV/17-19 | https://exhibits.stanford.edu/gatt/catalog/xq634mm2664 | xq634mm2664_90260069.xml | GATT_155 | 10,122 | 61,307 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/TAC/PV/19
13 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
1. 1, ,,
I
VERBATIM REPORT
,, '
- 1
, j
<-
: ,
NINETEENTH EEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON SL1AYP 1 SEPTEBER 147, AT 10,30 P.M. I
THE PALAIS DES N' ONS, GENEVA.
Hon. L.D. WILGRESS (Chairman) (Caneda)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220. (Tel. 2247),.
Delegates are reminded that the texts of interpretations, Which do
not pretend to be authentic translations, are reproduced for
gera1l guidanoe only; corrigenda to the texts of interpretations
annot, therefore, be ,accepted. CHAIRMAN: The meeting is called to order,
At the close of our meeting last night I announ ed that we
N
would take up first thing this morning Document E/PC/T/l95, which
is a draft prepared by the Secretariat covering the procedure for,
the preparation for signature of the Final Act and of the General
Agreement on Tariffs and Trade and of the Protocol. We will
request the Committee to approve of this document to-day and
members of the Cornmittee are asked to pay particular attention
to see that their Delegations carry out the requests which are
set forth in this document, both in relation to what they should
do.with their own governments and the information which they
.Should provide for the Secretariat
It will now. be in order for any member of the Committee to
ask any question or for any explanations they wish regarding
this document.
Any comments with regard to this document?
The first section deals with Credentials, Are there any
points arising in the first section?
The next point deals with soals. I think that is quite clear.
The third point deals with languages. Any comments?
Dr. G. A. dAMSVELT (Netherlands): Mr. Chairman, I regret
that I have not had timce to go over this particular paragraph
with my Delegation. I should like to make 'a reservation here.
CHAIRMAN: That will be quite in order, but if we o not
hear from the Netherlands Delegation we shall assume that they
have no objection.
Dr. G.A. LAMSVELT (Netherlands): Thank you.
M. ROYER (France):(Interpretation) : Mr. Chairman, I .
would make a small remark on the form in which this paper is
drafted, This remark applies to Credentials, We read that E/PC/T/TAC/PV/19
these oredentials may take the form of letters signed by
Foreign Ministers, and this seems to be too brief a formula
because, in fact, we do not think that the Credentials should
take the form only of letters. Of course, they will have to
be signed by the head of the State or the Foreign Secretary,
but nevertheless we do not think they could be in just the
simple form of letters.
CHAIRMAN: Would the Delegate of France suggest the
change of the word "letters" to "documents"?
M.ROYER (France) (Interpretation): The word"letter"
has in French a more informal character maybe than in English.
I think we could draft this sentence as follows: "These
credentials might be signed by the Foreign Minister when this
procedure is in accord with the constitutional rules of the
countries concerned"
CHAIRMAN: The change will be made.
H. E. Mr. WUNSZ KING (China): Mr. Chairman, while we are
on the point of languages I would like to make one remark which
I would like to put on record as a matter of principle. I
should like to have a Chinese text of the General Agreement as
well as Schedules but as a great concession, in addition to the
Tariff concessions, I would not insist on this point from the
practical point of view. I wish it to be understood that this
extra concession should not lead to any other concessions in the
future.
R . 4
CHAIRMAN: I thank the Delegate of China for his remarks and
I am sure that this will in no way affect the status of the
Chinese language which, according to the Charter of the United
Nations, is one of the official languages of the United Nations,
The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, I do not want to
create any problem by asking for a translation of the General
Agreement into Spanish, neither of the Charter, at this moment, but
I think that document should be translated into Spanish, which is
another official language of the. United Nations, as soon as posible.
CHAIRMAN: Are there any other comments?
4. Method of Reproduction. Are there any comments?
Mr. J.M. LEDDY (United States): Before we leave this point
of languages I think we have all got to be quite clear that the
proposal here is that the Tariff /Schedules shall be authentic in
either English and French or in one of the two and in no other
language. I think we all of us ought to be fully aware of what we
ate deciding here in that provision.
CHAIRMAN: Are there any other comments in regard to the
section on languages?
Item 4, Method of Reproduction. Members of the Committee
will note there a request of the Secretariat to be informed
regarding the points mentioned on pages 4 and 5 as soon as possible.
Are there any comments?
Section 5, General Timetable. Are there any comments?
Then I take it that the Committee approves of this document
with the addition which has been suggested by the French Delegation
regarding Credentials.
The Delegate of Belgium.
E/PC/TAC/PV/19
P. P. E/PC/T/TAC/PV/19
M:- Pierre FORTHOMME (Belgiam): Mr. Chairman, this is not an
observation for any change in the document, but I think it might
be a good idea for the Secretariat to let us know exactly the size
of paper which will be required for making this document, in order
to think of cutting the stencils.
CHAIR MAN: I will ask the Secretariat to explain the position
regarding paper.
Mr. LACARTE (Deputy Executive Secretary) The Administrative
services in Geneva have been looking into the matter and they find
that the only type of paper that we can use for the original, the
English original and the French original, is white paper the same
size as this which is being used in all documents. That will be
for the general provisions and the Schedules.
As regards the copies the delegations will take away with them,
these will have to be done on this same size of paper, this qual ity,
either white or blue. We will endeavour to use white, which is
probably better, but there may not be enough available so it may
have to be blue. I am afraid that this prejudges somewhat the
provisions of the Committee on the form of the Schedules. We
cannot have Schedules any wider than this paper, because we cannot
get the paper for it. So that is the position as regards that.
CHAIRMAN: The Delegate of Brazil.
Mr. E.L. RODRIGUES (Brazil): Mr. Chairman, I think that it
will be wiser to have sent to the Secretariat at the same time the
liat of concesions in the national language of the country, so as
to avoid any misunderstanding later on; because we know sometimes
the tariff structure is not easy to translate, so it would be safer
to have the lists of negotiations in the national language. P. E/PC/T/TAC/PV/19
CHAIRMAN: The provision in this document. regarding languages
is that the Schedules should be authentic in either English or
French or both. There would be no objection of course to any
delegation losing a copy of their Schedule in their own language
with the Seoretariat.
Are there any other comments? 7
H.E.Dr. Z. AUGENTHALER (Czechoslovakia). Mr. Chairman, just
a technical proposal - I would suggest that Mr. IaCarte, who is a
highly attractive male secretary, should organize a meeting of all
our typists to explain the technicalities to them and in which form
it should be written, and so on.
CHAIRMAN: Mr. LaCarte has already had that idea in view. He
proposed that he would call a meeting of the Secretaries of
Delegations in order to give them an outline as to what the Committee
here has decided, and then the Secretaries of Delegations would be
expected to inform their typists.
H.E. Dr. Z. AUGENTHALER (Czechoslovakia): So long as he gives
the instructions in secret!
M. ROYER (France) (Interpretation): Mr. Chairman, the French
Delegation would like to have as soon as possible the form, that is
to say, the frame of the Schedules, the length and width or the
columns, etc. Thus, we would be able to take advantage of the next
few days and our typing service would be able to prepare the frame
of the Schedules themselves.
CHAIRMAN: It is my intention that we should have a discussion
on the form of the Schedules, I had hoped on Monday, as soon as we
have made enough progress for the Secretariat to be able to prepare
.a clean text of the Agreement. At any rate, I should think the
discussion of the Schedules would take place on Tuesday next.
Are there any other comments?
E/PC/T/TAC/PV/19
J. J. 8 E/PC/T/TAC/PV/19
M. P. FORTHOMME (Belgium) Mr. Chairman, I suppose that
having the discussion on Tuesday would mean that, by that time, the
amendments regarding Article I which affect the form of the Schedules
will have been settled?
CHAIRMAN: I am not aware of any amendments outstanding on
Article I other than the Australian amendment, which we decided to
hold over, and I do not see how that can affect the form.
M. ROYER (France) (Interpretation) : Mr. Chairman, the
amendment is on Article II, paragraph 2.
CHAIRMAN: We decided to discuss the French amendment on
Article II at the time we are discussing the form of the Schedules.
There being no other comments, I think we can pass. to the next
order of business. I would propose that we should now take up the
proposed new paragraphs 6 and 7 of Article XVII suggested by the
United States Delegation, given in document E/PC/T/W/328.
The Delegate of the United States.
MR. J.M. LEDDY (United States): Mr. Chairman, these provisions
are based upon Article 14 of the Charter which envisage the
possibility of maintaining economic development measures pending
consideration by the contracting parties, provided that these
measures are notified to the Governments signing the Agreement before
the date of the Signature of the Agreement.
There are only three changes which have been made as compared
with the corresponding Article in the Charter.
Firstly, all reference to the Signatare or acceptance of the
Charter itself has been deleted, because it is not relevant for this
purpose. E/PC/T/TAC/PV/19
9
Secondly, the provision of paragraph 7, saying that the
provisions of paragraph 6 do not apply to any product described in
a Schedule annexed to this Agreement, is a compensation for the
provision in the Charter referring to obligations which had been
negotiated or to measures which might nullify or impair those
obligations. This is simply referring to products In the Schedules
of the Agreement.
Thirdly, we have inserted in lieu of the phrase "date of
.Signature of the Agreement" simply "date of the Agreement". We
have made provision now in the General Agreement that the Agreement
shall bear the date of the Final Act, and that is the date which is
to be used as a basis for determining whether or not a notification
of measures to be maintained has arrived on time. Now, the
requirement in the Charter is that notification must take place
30 days prior to the Signature. I have put those time periods in
brackets, because I think that we will have to discuss the question
of the time prior to Signature which should be allowed. I believe
that we are today about 30 days prior to the Signature, and I suggest
:that' we may want to reduce this period somewhat, because I believe
that the Members of the Committee, perhaps, have not given thought
to this particular problem, and they should have time to do so before
we fix a definite period after which a notification will not be in
order.
CHAIRMAN: Are there any comments?
Monsieur Royer.
M B. ROYER (France) (Interpretation): Mr. Chairman, this text
does not appear to me to be quite clear. There are two cases which
J. 10
we can consider.
The first case is that of ,what we term the contracting parties
themselves, that is, the seventeen countries represented here taking
part in the negotiations; the second case is the case of other
countries which may adhere to the Agreement at a later date. If we
consider first the case of the seventeen countries represented here,
I do not think that this text can be applied to them, because the
methods provided for in the text have been accepted anyhow prior to
the Signature, and this Agreement cannot rule 'a posteriori'. On
the other hand, We are dealing with the case of countries which will
adhere at a later date to the Agreement, and then these countries
are not, contracting parties, because the words "contracting parties"
have a specific meaning and only apply to the countries represented
here. Therefore, we ought to find in the second case another draft.
I have no objection in principle to the substance of the draft,
but, nevertheless, I think that we ought to draft another text which
would be different from the corresponding Articles of the Charter,
and which would provide for the case of the contracting parties on
the one hand and, on the other hand, for the case of countries
adhering at a later stage to the Agreement. - 11 -
Dr. Gustavo GUTIERREZ (Cuba): The Cuban Delegation has no
objection to the first paragraph of this new text. If any
alteration has to be made in order to improve the text, we would
be willing to accept it. For us, contracting parties are not only..
the ones which are here now and will sign the agreement but
anyone signing the Agreement in the future.
One objection we do have is in relation to the second small
paragraph, numbered 7. I suppose it means "The provisions of
Paragraph 6 of this Article shall not apply to any product
described in a Schedule annexed to this Agreement."
That text would practically nullify the whole effect of
Paragraph 6, because in the Schedules annexed to this Agreement,
when we have the consolidated Schedules of the different nations, there
will probably be all the different products of the world and of
every nation.
Of course, I understand the idea of the United States Delegate,
that the negotiations that have been conclude here in relation
to verious articles should not be jeopardized in any way by this
provision, but I think the only thing we could do would be to
adjust Paragraph 3 of Article 14 of the Charter, which gives the
real idea of this matter and which roads like this: "This Article
small not be construed to apply to a measure which would be
inconsistent with any obligation that the Member concerned has
assumed through negotiations with any other Member or Members
pursUant to Chapter IV or which would tend to nullify or impair
the benefit to such other Member or Members of any such obligation. "
I think that is proper and that this Paragraph 7 should read
more or less in the form of Paragraph 3 of Article 14. As it is
now it is absolutely impossible to eccept it, because it nullifies
E/PC/T/TAC/PV/19.
S S
the whole effect of Paragraph 6. I think the United States
Delegate can understand that very easily.
Mr.LEDDY LEDDY (Uniad St,?tes): Mr. Chairman, it was always our
understanding that ParagraphA3 of -rticle 14 of the Charter dealt
.with scheduled products and we would not be able to aaqypt !y
interpretation which would permit measures of this kind in
respect of scheduled products.
Mr. SEHACKL (United Kingdom): Mr. Chairman, I wonder if
there is a misunderstanding. It seems to me taat P.ragraph 3 of
Article 14 means that where the case arises of any particular
Member who has made a concession on a particular pr,ducts the
provisions of this Article 14 of the Charter will not apply in
respect of that product in respect of that Membe'r, whereas, if
I understa.d Dr, Gutiesrez'G point, he rears P-iagraph 7 of this
present draft before us as meaning that any product which any
c-untries schedule shall not be made the subject by any other
country of a measure under this article. I take it that is the
point, is it not?
CALIRMLN: ehe D-legate of.Cuba,
Dr. GUTIERREZ (Cuba): hairmzi rian, I wish to thank the
Delegate of the United Kingdom for his clarification of our point,
which is exactly as he has mentioned.
Mr. LEDDY (United States): In that care, Mi. Chairman, there
Is no difference between us at all.
Dr. GUTIERREZa(Cubz): . That is what I Thought.
CHAIMAN: The Delegate of China. E/PC/T/TA/PV/19
H. E. Mr. Wunsz KING (China): M. Chairman, whilst the
Chinese Delegation wishess to reserve its right to give more
careful study to these two new paragraphs to article XVII Of the
Draft agreement, which reproduce article 14 of the Charter, we
would like to point out that if those two new paragraphs are to
be adopted we would like to suggest the insertion, after the words
of
"particular industrics",/the words "or particular branches of
agriculture", so as to bring it more into conformity with the
provisions in Paragraph 1 and the other parts of this article,
M. ROYER (France) (Interpretation): Mr. Chairman, I
would second this proposal, because it is, in fact, the text
of the Charter itself which speaks of the establishment,
development or reconstruction of particular branches of particular
industries, or.agriculture.
CHAIRMAN: The Dlegate of Cuba.
Dr. GUTIERREZ (Cuba): Mr. Chairman, I think both the
Delegates of the United States and the United Kingdom, as well
as the Delegate of Cuba, have a contrary opinion in relation to
this paragraph.
I wonder if the text should be agreed in such a form as to
make clear its relation to the products described in the Schedule.
There is no difficulty of any kind with this provision, but the
nations are free to continue their measures against the other
nations outside the Agreement.
CHAIRMAN: I should first of all like to obtain the sense
of the Committee regarding the proposal of the Chinese Delegate,
seconded by the Delegate of France, to add, after the words
"particular industries", the words "or branches of particular
industries or agriculture."
S
- 13 - S -14- E/PC/T/TAC/PV/19
Mr. LEDDY (United States): Mr. Chairman, I think very
probably there was an oversight in the Charter, because Article
13 refers to particular industries or particular branches of
agriculture, whereas Article 14 of the Charter simply refers
to particular industries. I am sure the intent must have been
to cover the particular branches of agriculture.
H.E. Mr. WUNSZ KING (China): Article 14 reads: "Any
Member may maintain any non-discrirminatory protective measure
which has been imposed for the establishment, development or
reconstruction of particular industries or particular branches
of agriculture."
CHAIRMAN: It was evidently loft out of the mimeographed
text, but it is in the printed text.
I take it that the Committee has no objection to this
change.
The Delegation of India.
Mr. B. N. ADARKAR (India): Mr. Chairman, as I read it,
the mimeographed text of the Charter needs some improvements,
as the Delegation of China has pointed out.
M-y I suggest that the passage on Page 22 of the English
texts beginning with "Any Member maintaining any such measure",
be put into a separate paragraph, because it applies to (a),
(b) and (c); otherwise it would appear it does not apply to (c),
I suppose it is a typographical error. It ought to be a
separate sub-paragraph.
Mr. LEDDY (United States): The printed text is also incorrect,.
That particular sentence appears in a sub-paragraph; therefore
it applies only to sub-paragraph (c) instead of all the sub-
paragraphs. 15
CHAIRMAN: . We agree on the addition of the words "or
particular branches of agriculture."
The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, now we have
finished with that point I would like to raise just a few
queric s.
First of all, at the beginning of the draft of Paragraph
6 it refers to the proviso that any such contracting parties
shell notify the other contracting parties not later then 30
days prior to the date of this Agreement. That does not
seem very clear to us, because, of course, in many cases,
if the date of this Agreement is supposed to be the date of
the provisinal application by key countries or the final
entry into force, and so on, you do not know exactly what is
the relation. I think the best reference would be to the
date when each contracting party signs. Is that the
intention?
That is one point. The other point is with regard to
Paragraph 7. There it says:"the provisions of Paragraph 6
of this Article shall not apply to any product described in
a Schedule," and so on. Would that mean that a country which
has granted tariff concessions on some products would not be
allowed, for example, to maintain quantitative restrictions
under Article l4 of the Charter on the particular products
included in the Schedule?
'E/PC/T/TAC/PV/19
S E/PC/T/TAC/TV/19
CHAIRMAN: The Delegate of the United States.
Mr. J.M. LEDDY (United States): Mr. Chairman, I thought
we had agreed some days ago the inclusion in the Trade
Agreement of the provisions, and. to say: "This Agreement
shall bear this day's date","this days meaning the day on
which the Final Act is signed. That is the point, I think,
of "Done at Geneva this ... .day of ... .". There we would have the
date on which we would all sign the Final Act; so the thirty
days proposed here in the text would be thirty days prior to
the day of signature of the Final Act.
CHAIRMAN: I think the verbatim record of the meeting at
which we considered the first paragraph of Article XXIV will
show that we deleted the words "shall bear this day's date"
and it now reads: "The presant Agreement shall be open for
signature" and there is no reference to that particular
provision.
The Deleate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, can I then take
it that what we have in mind here is that notification shall
be given thirty days before any country signs this Agreement?
Mr. J.M. LEDDY (United States): Mr. Chairman, the
whole purpose of this provision is to allow each country to
know what measures are to be maintained and to ; :a. them
effectively before that contracting party signs the Agreement.
In other words, we, for example, must know before we sign the
Agreement what measures other countries propose to maintain
under this provision. That is our clear understanding of the
Charter language.
V 17
CHAIRMAN: The Delegate of India.
Mr. B.N. ADARKAR (India): Mr. Chairman, I think the problem
is a rather complicated one, because if we retain this
provision that the contracting parties shall be notified of
the restrictions not later than thirty days prior to the date
of the Agreement, we would not be allowing sufficient time for
the countries here to examine this question and to make the
necessary proposals. Sufficient time must be allowed for that
purpose.
At the same time, while examining this question, I notice
that in paragraph 1(b) of the original Article 14, with
regard to any Member which is not a signatory of the General
Agreement but which signs the Charter, it has been provided
that such Member shall notify the other Governments of
restrictions of this sort prior to their signature; the
principle there being that the Governments which accept
obligations in relation to that Member should know, before
accepting such obligations, what restrictions the Member in
question has in force.
That is the point which has just been raised by the Delegate
of the United States. That being so, it is neither
practicable to retain the provision suggested here, nor is
~~~straightforward
i easy/ to isnsert tprtoviiln that 'e notification should be
made not later than thirtyt days prior o the signature of the
Agreement.
Mr. J.M. EDDY (United States): Mr. Chairman, it is for
the reason given by the Delegate of India that we put the
"thirty days"in brackets, because we thought there was not
enough time for the countries here to consider it,
E/PC/T/TAC/PV/19 V E/PC/T/TAC/PV/19
What I suggest we do now is simply to agree upon a date
after which no further list of products will be considered,
and I should think that perhaps two weeks from today
would be ample time to allow an examination of the situation
and for the submission of any lists of products they want to
put in.
CHAIRMAN: The Delegate of Brazil.
M-;. E.L. RODRIGUES (Brazil): Mr. Chairman, I have the
same difficulty as has been expressed by the Delegate of India,
and I cannot agree with the Delegate of the United States
that two weeks will be enough time in which to prepare the
list. Certain countries who are in a very distant geographical
position would have great difficulty in putting measure
into force in such a short period. Because of this, I should
like to see another way of dealing with this matter, which
would allow us and some other countries to agree to a proper
fixed date.
CHAIRMAN: The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, fourteen days
from today in which to make investigations on this problem and
to notify the Organisation or the other parties here would be
much to short a time. Two months from now would, be a
reasonable period.
After all, this is rather a difficult technical problem
to study, and we have certainly understood that we shuold, in
accordance with the Charter, notify the Members of the
Charter or the parties to the General Agreement not later
than thirty days before we ourselves sign. That has been our V 19 E/PC/T/TAC/PV/19
understanding. If that is wrong, I regret it, but to accept
fourteen days from now would be quite impossible.
CHAIRMAN: The Delegate of the United States.
Mr. J.M. LEDDY (United States): Mr. Chairman, I think
there may be some misunderstanding on the part of the Delegate
of. Brazil. This Article does not relate to new measures. It
is not designed to give an opportunity for the imposition of
new measures. It is merely designed to provide a transitional
period for measures which already exist - which have been
imposed: which are in force today.
With regard to' the suggestion of the Delegate of Norway,
these proposals have been before the countries around this
table for several weeks. It is regrettable that they have not
known of this instuation or have misunderstood it; but the
provisions have been there, and for our part we are not prepared
to accept or be sign in respect of any other Government around
this table a blank cheque. We must know before we sign what
the products are.
I think that this situation has been understood, and that
putting this date off for two weeks will allow ample time for'
the experts here (and there are many experts here) to examine
the existing rules and regulations that they have and submit
a list of products, if they wish to submit a list. It will
be open, of course, for other countries to question the
products on that list.
CHIARMAN: The Delegate of India.
Mr. B.N. ADARKAR (India): Mr. Chairman, it seems to me
that countries which accept the obligations of this ,Agreement 20 PV/19
should know the exact position. We must remember the fact
that most countries signing this Agreement will be only
giving provisional effect to their obligations for a certain
period. It is not intended that the agreement should enter
definitively into force before a certain period has elapsed.
In the circumstances, I wonder whether any practical
difficulty would arise if we said "not later than thirty days
prior to the definitive entry into force of this Agreement".
If a country which has given provisional application
discovers that.another country has restrictions in force
which affect its interests severely, it can propose a
modification of the tariff schedules. Even if we say that,
we will not be providing for new adherence to this Agreement,
that is, countries adhering to this Agreement after its
definitive entry into force. With regard to such countries,
I think it should be provided that they should be required to
notify their restrictions thirty days prior to their adherence.
E/PC/T/TAD/PV/1 9
V 211 E/PC/P/TAC/PV/19
CHAIRMAN: The Delegation of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): There sees,to be a matter
of opinion that there is a misunderstanding with regard to this
matter. If, according to Paragraph 7 the provisions of
Paragraph 6 of the present article will not be applicable to
the produots given in the list annexed to the present Agreement,
which has been signed between the contracting parties, I wonder
What is the practical importance of this problem.
Since, in the list of tariffs, the largest part of the
production of the interested countries would be inserted, and
if these provisions are not to be applied to what is mentioned
in the tariff list, which is the largest part of the production
Of the interested countries, I wonder what would be the effect
of insisting that notification should be made 30, 40 or 60 days
prior to the date of the Agreement.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, the
Cuban Delegate has just said what I wanted to say myself. If we
adopt paragraph 7 of Article XVII then the question of procedure
will not arise. In fact, there is something curious if we look
at the time-table, because this Document has been circulated
with the date of September 9 1947, and we are asked in this
Document to notify the other contracting parties 30 days before
tbe date of the present Agreement. Now, the Article of the present
Agreement will be the date of September 30; therefore it means
that we are asked to give notification before the 1st September
and this Document was only circulated on the 9th September.
Of course, the text of the Charter was circulated to the Delegations
before that date, but, nevertheless , I wonder if all Delegations
saw the implications in that respect to the provisions of Article XIV. E/PC/T/TAC/PV/19
Once again we are faecd with the difficulty which arises.
from the fact that we are. now discussing the. text of an
Agreement, whilst, at the sane time, the text of the Charter
has not been finally adopted. I will not go over again the
metaphors which were mentioned here in that respect, but I will
agree with Mr. Gutierrez when he said that what we need to do
here is to have a practical formula, and that, as this problem,
from a practical point of view, is not an important one, we)
could give time to tho various countries to go throuh their
legislations and see what has to be done in that respect.
Mr. E.L. RODRIGUES (Brazil): Mr . Chairman, We are not
very happy about this paragraph 6. It is indeed a very broad
paragraph. If you take into consideration any programme for
development and reconstruction, especially in a new country, it
seems that this peragraph may cause a lot of trouble for us.
I think there is a great deal of reason for us to ask for
a little more time, because this paragraph is a little out of
line. with the matter concerned in this schedule annexed to this
Agrement. It is something new and much broader, and in spi te
of the very great facilities we .are going to get from your
Governrnent, we are not in a. position here in Geneva to follow
exactly the policy of our country with regard to some industries,
and I believe it will also happen with some other countries.
At the same time, as I said before, it is somewhat out of line
with our main purpose here; therefore, we should like to have
a little more time.
Our interest would be for the deletion of this paragraph.
If I am not wrong - if I am. I should like to be corrected - I
think it will well deserve some attention, because we want to
avoid difficulties in the future ;
CHAIRMAN: The Delegate.of Norway.
R.
22 R. 23 E/PC/T/TAC/PV/19.
Mr. J. MELANDER (Norway) With regard to paragraph .6
of the text, I am in general agreement with the statements made by
the Delegate of India and the Delegate of France. I think one must
arrange for considerably longer time to make investigations as to
these problems. On the other hand, I quite see the point raised
by the Delegate of the United States, that he does not want to sign
a blank cheque. I think therefore we must have a resaonable
time limit in which to notify about these measures before their
definite coming into force. P. E/PC/T/TAC/PV/19
24
With regard to paragraph 7 I asked a question as to whether,
for example, it would be possible to maintain quantitative
restrictions in accordance with Article 14 of the Charter, whether
one could maintain those quantitative restrictions also in respect
of products included in a schedule of products which have been only
included for the purpose of binding a tariff. I have not
received any answer to that and personally I should think that the
answer would be yes, we can do that.
I interpret Artiile 14, paragraph 3, of the Charter in such a,
way that, with regard to non-discriminatory measures such as, for
example, mixing regulations or internall taxes, one would not be
allowed to maintain those by virtue of Article 14 if there have been
special negotiations relating to those particular measures, limiting
those particular measures; but if the negotiations here have only
led to the binding or reduction of a tariff duty without going into
these particular products, then I would interpret Article 14 of the
Charter, paragraph 3, in such a way that it would be only the
nullification or impairment point which could be raised. I do not
think there would be any obligation under the Charter, then, to let
these measures not apply to products contained in the Schedule.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, as I see
it, there are three quite distinct points involved in this
discussion.
The first point is the point raised by the Delegate of Cuba on
paragraph 7 of the paper in front of us. That is a point on which
we think we have already come to an understanding, at any rate as
between the Cuban Delegation, the United. States Delegation and the
United-Kingdom Delegation, namely that this is not intended to
mean that any product which is in anybody's Schedule may not be made
subject to paragraph 6. It is a question of the provisions which
are. in each particular Schedule. That, I think, could be made
clear very simply, as a matter of drafting, by inserting in the
second line of paragraph 7 after the words "shall not apply" the P. E/CPC/T/TAC/PV/19
25
words"in respect of any contracting party" and then, a little
further on, after the words "to any product described in"
replace the words "a Schedulo" 'by "the appropriate Schedule". I
think this drafting amendment, or something like that, would
probably clear that particular point.
The second point is the point raised by the Delegate of Norway
as to whether this paragraph 7 is to be understood as prohibiting
the maintenance of some of kind of restrictive measure, quantitative
measure, internal mixing regulation, or anything of that kind on a'
product on whech the contracting party concerned has negotiated the
tariff for binding As to that question I am not prepared to
pronounce a definite opinion off-hand, but it does seem to me very
clear that if a tariff binding has been negotiated in ignorance
of some restrictive measure of this kind, then it is, so to
speak, in a very proper situation, It seems to me it is only if
the tariff binding has been negotiated by the parties with their
eyes fully open to the fact, that there could be any question of the
maintaining of such a measure. I do not feel inclined to go any
further into that particular point.
The third point is the time by which existing measures have
to .be notified. As regards that, I think it was certainly the
intention of the Draft Charter that all those measures would have
to be notified so that all the respective signatories would know
of them before they sign, otherwise they would be signing a blank
cheque.' That I think is quite clear as regards every category of
Member who signs, if one looks at (a). (b) and (c) of paragraph 1.
of Article 14. Even in the case of latecomers in (c) it says
."any other such Member shall, prior to the day of its signature of
this Charter, have notified the existing measures that it wishes
to maintain to all governments which signed the Charter on the day
of its general signature". In other words, before the general
signature comes along all those measures have got to be notified. P.
Well now, applying that to this Particular case that we have
before us of the General Agreement, it would, if one would follow
that out, logically follow that all these measures have to be
notified at least before the day when the General Agreement is open
for signature. That, of course, will mean a short period of
time and I am wondering whether as a practical matter we have to
insist absolutely upon it.
First of all the effective thing which will be done about this
General. Agreement is that certain key countries will sign the
Protocol of Provisional Application. They will be a limited list;
the rest will follow on later. I was wondering if, as a practical
measure,it might not be good enough if we say that these measures
must be notified at a fixed date, say two months from now, as the
Norwegian Delegate suggested.
I think that so far as measures in force in key countries are
concerned, they will qualify on balance of payments grounds, where
they exist, As far as the case of the generality of countrie
will be concerned, it seems to me that, as the definitive entry
into force is still some months ahead, it will probably be guite
enough if we say that two months from now all these measures
must be notified. It is not a perfect solution, but I am
inclined to believe that it is a practical one, and it miht work.
Mr. J. M. LEDDY (U.S .A.) Mr. Chairman, I am afraid that
the suggestion put forward by the Delegate of Norway would go far
to destroy the basis of the understanding of economic development
:which we have so carefully laboured to construct over a period
of five months. It is almost incredible that at this
26 P. E/PC/T/TAC/PV/19
27
late date we should have suggestions to the effect that countries
may maintain complicated restrictions for economic development
purposes on products on which tariff concessions have been
negotiated. Surely that has always been clearly understood. I
think an examination of Article 13 would bring that out quite
clearly. It provides that a country may impose a measure which
nullifies or impairs the tariff concession if substantial agreement
is reached with the country which has negotiated the concession'.
Well now, no-one would question for a moment that a quota
newly imposed on an item on which a tariff
that
concession has been negotiated would nullify or impair / concession.
That. has always been a clear understanding.
Our view is that if this Airticle 14 is to be departed from
substantially, we cannot accept it in the Agreement.,
I do not wish to say that two weeks is the maximum, but we
feel that we must follow this basic procedure of notification prior
to signature by the other countries concerned. We feel that is
an essential part of Article 14 and we feel it is an essential
part of the whole understanding that quantitative restrictions,
internal mixing regulations and other such devices, do in fact
nullify or impair tariff concessions.. J
28 E/PC/ T/TAC/PV/19
CHAIRMAN: I think we have devoted sufficient time now to the
consideration of these two paragraphs. I shall endeavour to make
a proposal in the hope that we may reach general agreement, but if
that proposal is not acceptable then I see no other course than to
set up a Sub-Committee to consider the text of these two paragraphs
to see if a proposal could not be submitted which would obtain
general agreement.
First of all, I take it that the Commiittee would be in accord
with the proposal made by Mr. Shackle regarding paragraph 7. If
Mr. Shackle's proposal were adopted it would then read as follows:
"The provisions of paragraph 6 of this Article shall not apply in
respect of any contracting perty to any product described in the
appropriate Schedule annexed to this Agreement". Are there any
objections to the proposal of Mr. Shackle?
Mr. Melander,
MR. J. MELANDER (Norway): Mr. Chairman, as far as I can see,
that will have to be interpreted in the light of Article 14,
paragraph 3. In other words, I would interpret it in this way:
in
that if/an appropriate Schedule it has been agreed that the tariff
duty is so much, and that the internal tax shall be so much, and the
mixing regulations shall be cut out in this or that way, everything
in accordance with the Draft Charter, that is all well and good, but
if the Schedule only contains the tariff duty and nothing more,
then I would interpret it in accordance with paragraph 3 of
Article 14, namely, that if there are non-discriminatory measures
which fall within paragraph 1 of Article 14 they will, of course, be
able to continue. J. E/PC/T/TAC/PV/19
29
If this interpretation is accepted, I have no objection to
Mr..Shackle's text.
CHAIRMAN: I do not think that that would be my interpretation
of this paragraph. I think it is very clear that it would mean that
the provisions of paragraph 6 shall not apply in respect of any
contracting party to any product described in the appropriate
Schedule, so, if the product is described in the appropriate Schedule
the provisions of paragraph 6 would not be applicable.
MR. J.. MELANDER (Norway): Mr. Chairman, I was afraid that that
would be the interpretation, and I must say that I would also
interpret the language of paragraph 7 in that way. The reason why
I raised the point was that I think paragraph 7 as drafted here by
l. Shackle would really go beyond Article 14, paragraph 3. It
would impose limitations stricter than those laid down in Article 14,
paragraphph 3.
CHAIMAN: The purpose of Mr. Shackle's amendment was to
clarify the wording of the text proposed by the United States
Delegation. I think that the text proposed by. the United States
Delegation was not clear that it related only to the appropriate
Schedule, and that was the purpose of Mr. Shackle's amendment,
It Is I think, clear that we are not going. to obtain .agreement
on these two paragraphs today. Therefore, I would propose that the
matter of drafting these paragraphs be referred to a special Sub-
Committee. Is the Committee in accord with that proposal? Is that
agreed?
The proposal to set up a Sub-Committee is agreed. J. E/PC/T/TAC/P-V/19
30
Accordingly, I will nominate representatives of the following
Delegations to compose the Sub-Committee: The Delegate of India,
to be Chairman, and the Delegates of Cuba, Norway, Belgium and the
United States.
M. P. FORTH0MME (Belgium): Mr. Chairman, could I suggest that
the Delegation of Belgium be replaced by the Delegation of the
Netherlands?
CHAIRMAN: Mr. Shackle.
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, I do not want
to be included if it is unnecessary, but this is a matter in which
we are interested, and as I suggested the amendment may I make a
gesture of self-sacrifice and suggest that the United Kingdom be
represented on the Sub-Committee?
CHAIRMAN: It is quite in order that Mr. Shackle should be
on the Sub-Committee. The only reason that I did not propose him
,was out of consideration to Mr. Shackle, whom I feel is very much
over-worked.
DR. G. GUTIERREZ (Cuba): Mr. Chairman, I was going to ask to
be replaced in the Sub-Committee by Mr. Shackle.
CHAIRMAN: I am afraid I did not quite understand......
DR. G. GUTIERREZ (Cuba): I give up my place in the Sub-
Committee in favour of the Delegate of the United Kingdom.
CHIRMAN: The Sub-Committee would then be composed of the
Representatives of the Delegations of India, United States, Norway,
Netherlands, and the United Kingdom. E/PC/T/TAC/PV/19
Is the composition of the Sub-Committee approved?
I would ask Mr. Adarkar to preside over the proceedings of the
Sub-Committee, which will meet at 10.30 a.m. on Monday.
I now wish to turn to Article XXII and to raise a question which
is of interest to the Delegation of Chile. At the meeting which
took place earlier in the week we reached tentative agreement to
delete paragrgaph 4 and 5 of Article XXII. The Delegate of India
had proposed the deletion of these two paragraphs and that had
obtained general support in the Committee, but as the Delegate of
Chile was not present at that time it was agreed that the deletion
of these two paragraphs should be only tentatively approved and held
over .for, confirmation until the Delegate of. Chile could be present.
The Delegate of Chile.
MR. A . FAIVOVICH (Chile) (Interpretation) Mr. Chairman, we
accept the deletion of these two paragraphs 4 and 5 of Article XXII.
CHAIMAN: Accordingly, we confirm our decision to delete
'paragraphs 4 and 5 of Article XXII.
I would now like to ask the Committee if it would be possible
fof us too take up now the revised United States text of Article XXIII,
which is given in document E/PC/T/W/330. At the time we were
considering this text it was decided to defer further consideration
until the United States Delegation could submit a reviced text and
until we had considered paragraph 1 of Article XXVII. As the Members
of the Committee know, there has been some delay in our consideration
of paragraph I of Article XXVII., but I am wondering if the Committee
could not agree now to consider the text of Article XXIII as proposed
by the United States Delegation and as given in document E/PC/T/W/330.
J. 31 E/PC/T/TAC/PV/19
CHAIRMAN: The Delegete of China.
H. E. Mr. Wunsz KING (China): M. Chairman, I am sorry
to be so late; it is because my mind works very slowly.
I want to go back to article XXII, Paragraph 7. I am
reminded that at a previous meeting we suggested the deletion
of this Paragraph 7, thinking that the provision was not quite
necessary, but I understand this paragraph is still there.
I would like to suggest we substitute the words "by the
regional and local governments and authorities within its
territory" by a simpler expression: "to the whole extent of
its territory," I believe this is simpler and perhaps more
appropriate, That is, I suggest we use the words "to the
whole extent of its territory" in substitution for the words
"by the regional and local governments and authorities within
its territory." It does not change the substance of this
provision , but it seems to me this wording is simpler and
perhaps a little more appropriate.
CHAIRMAN: We have already approved of this text of
Paragraph 7 of Articlel e XXII at our second reading, but, with
the unanimous consent of the Committee, we can now consider
the suggestion of the Chinese Delegate. Is that agreed?
The Delegate of China proposes to delete the words "by
the regional and local governments and authorities within its
territory" and substitute the words "to the whole extent of its
territory."
The Delegate of the United States.
Mr. LEDDY (United States): Mr. Chairman, this particular
S
- 32 - S E/PC/T/TAC/PV/19
33
paragraph was drawn from the Charter and I think some rather
careful considaration went into its framing. I believe it is
necessary to distinguish between central or federal governments,
which undertake these obligations in a firm way, and local
authorities, which are not strictly bound, so. to.speak, by the
provisions of the Agreement, depending of course upon the
constitutional procedure of the country concerned.
I think it really would be preferable to retain this
language; it has some relationship with refarences in other
parts of the Agreement dealing with actions taken by governments.
I am afraid that if we change the language of Pragraph 7 we
shall probably disturb some of the interpretations and under-
standings that have been arrived at with respect to other parts
of the Agreement,. as .well as raising quest ions with regard to
.the Charter when we get to Havana. Therefore I should be
rather inclined to take the present draft.
CHAIRMAN: ,Is there any support for the proposal of the
Delegeate of China?
In view of the silence of the Members of the Committee,
I will take it that the majority of the Committee are in favour
of the retention of the text in its present form.
The Delegate of China.
H. E. Dr. WUNSZ KING (China): I accept your ruling, Mr.
Chairman, but sometimes silence signifies the lack of opposition,
too.
CHAIRMAN: May we now take up the United States re-draft
of Article XXIII, as given in Document W/330.
Paragraph 1: are there any comments? E/PC/T/TAC/PV/19
Mr. J. P.D.JOHNSEN (New Zealand): I think there is a minor
typographical error in the fifth line of Paragraph 1 and I was
wondering whether the word "activity" in the last line but two
should not be "action".
M. ROYER (France) (Interpretation): Mr. Chairman, I
would like to make a comment on the English text. It seems to
me that in the Preamble we have used the word "objectives"
and not "purposes" and we could use the same word here.
CHAIRMAN: The New Zealand Delegate has pointed out two
typographical errors. The Delegate of France has proposed
the. substitution of the word "objectives" for "purposes". Is
there any objection to this proposal? Is that agreed?
Are there any other comments on Paragraph 1?
Paragraph 2: it is necessary to decide upon the date
which is given in square brackets,
The Delegate .f theUnited States.
Mr. LEDDY (United States): I am; wondering if we could fix
a limited date. We are n-t certain how long the Havana
Conference is going to last. I .suppose such a meeting could
take place at Havana. On the other hand, although we could
say "not later than X day,"I wonder if we should move up the
date of February 1 and say March 1. Then if it is necessary
to have an earlier meeting I Suppose it could be arranged.
CHAIRMAN: The United States Delegate proposes the date
of March 1. Is that agreeable?
(Agreed)
Are there any other comments on Paragraph 2?
Paragraph 3.
S
-34- - S E/PC/T/TAC/PV/19
35
Mr. SHACKLE (United Kingdom): On th.is paragraph, Mr.
Chairman, I would recall that I made a short statement when the
original text came before the C'mmittee, I do not think I
need repeat that statement.
CHAIRMAN: Paragraph 4: are there any comments.
M. ROYER (France) (Interpretation): Mr. Chairman, the
French text will have to be reviewed, because it seems that the
Secretarist has not yet understood fully the importance of
capital letters here and there is a mixture of capital letters
and small letters whenever the words "contracting parties" appear,,
CHAIRMAN: I thank the Delegate of France for pointing that
out,
Paragraph 5 here- also it will be necessary to decide what
to do with the words in square brackets.
M. ROYER (France) (Interpretation): Mr. Chairman, if I
remember rightly, I think the Committee decided to maintain the
words in square brackets.
Mr. SHACKEL (United Kingdom): M . Chairmnan, my recollection
is the same.
CHAIRMAN: Then I take it the Committee has already decided
that the square brackets should be deleted.
Are thare any other comments on Paragraph 5?
Paragraph 6.
The Delegate of Norway.
Mr. J. MELANDER (Norway): Paragraph 6 covers the same
subject as Pragraph 7 of the original draft. I .to not think \
,we Would have any objection to the text as suggested now in
Paragraph 6, but, as I mentioned when we discussed Paragraph 7
of Article XXIII, I would like to reserve our definite stand-
point on this until we have finished Article XXVII, 36 E/PC/T/TAC/PV/19
CHAIRMAN:. The Delegate of the United States.
Mr, J.M. LEDDY (United States): Mr. Chairman, I just
have one question on paragraph 6, and that is, I wonder whether
it is necessary. Part II is superseded by the Charter and,
of course, this Article really disappears: there are no
further functions of the contracting parties to be exercised,
because the substantive provisions providing for such functions
would have disappeared,.and the functions would be automatically
transferred to the International Trade Organization. Now,
Now, to whatever extent supersession took place, then
all the functions involved in the supervision of those
provisions would automatically go to the I.T.O., and the
balance would remain here; so I wonder whether we might not
delete the paragraph.
CHAIRMAN: The Delegate of Chile.
M. Angel FAIVOVICH (Chile) (Interpretation): Mr.Chairman,
if- I can speak on paragraph 5 again, although we have left the
subject, I would like to make a statement. I must say that
we regret the provisions which are inserted in paragraph 5
of Article XXIII and the qualification here of a double
majority: one majority of two-thirds of the votes cast, and
a majority of more than half of the Contracting Parties. As
we have stated, we are opposed to such a provision and
therefore we must, reserve our position on this point.-
CHAIRMAN: Due note will be taken of the reservation of
the Delegate of Chile, but I hope that when we come to the
third reading of this Article the Delegate of Chile may be in
a position to withdraw this reservation.
V Mr. B.N. ADARKAR (India): Mr. Chairman, the words
"contracting parties" at the beginning of the passage enclosed
in square brackets should be in capitals, I think.
CHAIRMAN: I take it that the Delegate of India is
quite correct.
Mr. R.J. SHACKLE (United Kingdom): Regarding the
proposal Mr. Leddy has made to delete paragraph 6, expressing
an off-hand opinion I would see no objection to that, because,
as far as I can see, all .that paragraph 6 says is that the
functions shall be transferred, except insofar as it is
decited that they shall not be transferred! That, surely, is
a thing which is hardly worth saying. If desired, of course,
one could defer the question until we have discussed
Article XXVII, but I should have thought we could very well
agree with Mr. Leddy's proposal straight away.
CHAIRMAN: The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairman, I
quite agree with Mr. Shackle that 'paragraph 6, as it is
drafted now, does not present much interest; but nevertheless
I wonder if we ought not to indicate in a very precise. manner
that as soon as the I.T.O. is created, the functions of the
Contracting Parties should be transferred
to the I.T.O., and this,at least, is the view of the French
Delegation, because I really do not think that we can run two
parallel organisations at the same time.
- Within the I.T.O. there will be a Tariff Committee, and
this Tariff Committee will have the same functions as the
Contracting Parties. On the one hand, the Contracting Parties
E/PC /T/TAC/PV/19
V V
38 E/PC/T/TAC/PV/19
have the same functions as the Conference and. on the other
hand, the same functions as the Executive Board. I do not
feel that we should have two parallel organizations working
at the same time on the same matters, because we would be
having perpetual conflicts of law. This would be bringing
about chaos and anarchy, and therefore we have to writo in an
Article here stating that as soon as the Organisation is set
up, the functions of the Contracting Parties will have to be
transferred to the Organisation; or if we do not want to do
this, we have to redraft the Charter.
CHAIRMAN: Are there any other comments with regard to
the proposal to delete this paragraph?
Dr. Z. AUGENTHALER (Czechoslovakia ): Mr. Chairman, I
would like to state that we share the opinion of the French
Delegate.
Mr. R. J. SHACKLE (United Kingd om), I would only
suggest, Mr. Chairman, that we had better consider the matter
in relation to Article XXVII.
CHAIRMAN: I think the remark of Mr. Shackle is a pertinent
one. Perhaps we might put this paragraph in our clean text in
square brackets. Is that agreed?
,M. ROYER (France):(Interpretation): Mr. Chairman, there
is another proposal, which consists in placing into square
brackets the words "exccept to the extent that they may agree
otherwise pursuant to paragraph 2 of Article XXVII".
Mr. R.J. SHACKLE (United Kingdom): That would leave a
free field to have wide square brackets! 39
CHAIRMAN: I think everyone will be satisfied if the
square brackets are around the whole paragraph, because the
greater always includes the less. Is that agreed?
The United States Delegation proposes that wherever the
word "Committee" appears in the General Agreement, i t should
be changed to "Contracting Parties". This will occasionally
require consequential changes in related berbs, as, for
example, changing "if the Committee decides" to "if the
Contracting Parties decide". The proposal continues; "The
first reference to the Contracting Parties appears in Article V,
paragraph 5, of the General Agreement. The words in parentheses
in the fourth and fifth lines from the bottom should be changed
to read "hereinafter referred to as the Contracting Parties".
Is that proposal agreed?
M. ROYER (France) (Intorpretation): Mr. Chairman, I wonder
if we might not ask the Secretariat to attach a glossary to'
the General Agreement, because the words are used so often in
a way completely different from their normal meaning. I think
that for the interpretation of the General Agreement a glossary
would certainly be very useful.
CHAIRMAN: The Secretariat will make these consequential
changes, and I think we are now in a position to invite the
Secretariat to prepare a clean text of the Agreement. It will
be necessary for them to put in square brackets certain
provisions such as the Report of the Sub-Committee which is
meeting this afternoon, dealing with paragraph 3(b) of Article
XXIV. We will also put in square brackets the Protocol of
Signature, and we will put in square brackets the Australian
proposal dealing with the new Article providing for suspension
E/PC/T/TAC/PV/l9
V V E/PC/T/TAC/PV/19
40
and supersession. With. these exceptions, the text will be
clean and I propose that at the next meeting, which will take
place on Monday, we should take up the paper prepared by the
Secretariat on signature of the Final Act, the Protocol of
Signature, and the Australian proposal regarding the Article
pertaining to suspension and supersession.
CHAIRMAN: The Delegate of Norway
Mr. J. MELANDER (Norway) Has the United States proposal
for a new paragraph 6 to article XIII been dealt with?
CHAIRMAN: No, that has not been dealt with yet, and
there have been amendments proposed to that Article, so I think
we will just, in that case, refer to a new paragraph 6 without
giving the text.
Dr. Gustavo Gutierrez (Cuba). When will we have that
clean text, Mr. Chairman?
CHAIRMAN: I will not promise that it will be distributed
first thing on Monday morning, but it will be distributed at
the meeting on shortly before the meeting on Monday afternoon.
I wish to announce that the Sub-Committee dealing with
Article XXIV will meet this afternoon at 3.15 instead of
at 2.30 as originally announced,
The meeting is adjourned.
(The meeting rose at 1.5 p.m.) |
GATT Library | jz965sk4613 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Nineteenth Meeting of Commission A Held on Friday, 27 June 1947 at 2.30 p.m. in the Palais Des Nations, Geneva | United Nations Economic and Social Council, June 27, 1947 | United Nations. Economic and Social Council | 27/06/1947 | official documents | E/PC/T/A/PV/19 and E/PC/T/A/PV.18-20 | https://exhibits.stanford.edu/gatt/catalog/jz965sk4613 | jz965sk4613_90240121.xml | GATT_155 | 12,883 | 78,998 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/19
27th June 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
NINETEENTH MEETING OF COMMISSION A
HELD ON FRIDAY, 27 JUNE 1947 AT 2.30 P.M. IN THE
PALAIS DES NATIONS, GENEVA
Mr. MAX SUETENS (Chairman)
(Belgium)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247).
NATIONS UNIES E/PC/T/A/PV/19
CHAIRMAN: (Interpretation): The meeting is called
to order.
I will begin by apologising. We decided to postpone
the meeting until 3 o'clock; unfortunately, I, was unable to
give due notice to all the delegates in time.
Mr. R.J. SHACKLE (United Kingdom): On a point of
order, I oan see no secretaries here.
CHAIRMAN (Interpretation): If you think we cannot
begin without the secretaries, perhaps we had better wait a few
minutes.
Mr. J. MELANDER (Norway): I suggest we begin, we
cannot wait indefinitely.
CHAIRMAN (Interpretation): I share that opinion if Mr.
ghaokle has no objection.
MR. SHACKLE: No.
CHAIRMAN (Interpretation): We shall consider to-day
Articles 25, 26 and 27. These Articles contain very difficult and
complox matters, therefore in order to save time I would suggest
that we limit our discussion in plenary session to questions of
substance, and refer all drafting points to a sub-Committee which
will be formed. Each time an amendment is submitted for the con-
sideration of the meeting I shall give my opinion as to whether
I consider that this amendment is one of form or of substance; and
conseguently whether it shall be discussed here or referred to the
sub-Committee. It is, of oourse, understood that if the delegates
concerned desires to discuss this amendment in the plenary session,
he will be able to do so.
- 2 - -3 -
MR. O. RYDER (United States ): Mr. Chairman, as I understood
it, we are confining our attention to Articles 25 and 27. I
believe you said articles 25, 26 and 27.
CHAIRMAN (Interpretation): There was a misunderstanding. It
is Articles 25 and 27 only. Article 26 will not be discussed.
Gentlemen, Article 25 consists of several paragraphs. We shall
begin with paragraph 1. There is an amendment of the United
States delegation referring to paragraph 1. I consider that it is
an amendment of form and therefore I propose to refer it to the
sub-committee, provided the United States delegation agrees.
MR. O. RYDER (United States): That is satisfactory.
Mr. Chairman.
CHAIRMAN (Interpretation): Thank you.
We now come to paragraph 2, sub-paragraphs (a) and (b). The
first amendment we encounter is the amendment submitted by the
Australian delegation which concerns sub-paragraph (b).
Sub-paragraph (b) in its present draft reads: "Export prohibitions
or restrictions temporarily applied to roelieve critical shortages
of foodstuffs or other essential products in the exporting Member
country". Now, the Australian delegation's proposal is to include
the words "prevent or", reading "temporarily applied to prevent or
relieve critical shortages".
I expect that the delegate for Australia would like to say a
few words on his amendment.
DR. H.C. COOMBS (Australia): Mr. Chairman, I do not think
it is necessary for us to say very much on this. We suggest the
inclusion of the words "prevent or" in front of "relieve critical
shortages" because it does seem to us to be foolish to wait until
J. -4- E/PC/T/A/PV/19
the horse has bolted before you shut the stable door. In other
words, there may be conditions in which a critical shortage of
foodstuffs is clearly imminent, and we would wish for ourselves and
for other countries to be able to take necessary action to deal with
that situation without having to wait until the damage has been
done.
CHAIRMAN (Interpretation): Do any other delegates wish to
speak on this amendment ?
MR. J. J. DEUTSCH (Canada): I would like to support the
Australian amendment for the reasons which he has given.
CHAIRMAN (Interpretation): The delegate for New Zealand.
MR. L.C. WEBB (New Zealand): Mr. Chairman, I would like to
support the Australian amendment.
MR. C.L. TUNG (China): Mr. Chairman, the Chinese delegation
also supports this proposal.
CHAIRMAN (Interpretation): The delegate for the United States.
MR. O. RYDER (United States); Mr. Chairman, we are in
agreement with the purposes of the amendment but I think it is
probably inexplicit as the paragraph is written now but I am
perfectly willing to have it clarified. I am not certain that
"prevent" is the best word there, and so I suggest that it be
referred to the Drafting Committee for phraseology, but I agree with
the principle of it.
CHAIRMAN (Interpretation): The delegate of Belgium. J.
M.P. FORTHOMME (Belgium) (Interpretation): Mr. Chairman,
I want to make a point on the French version. I do not think
"s'opposer" is the exact translation of "prevent", and I should
rather suggest "prevenir" which, moreover, has the advantage of
meeting the point raised by my American colleague
CHAIRMAN (Interpretation); M. Baradue.
M. BARADUC (France): Mr. Chairman, I was about to make the
same remark as the representative of Belgium - a remark concerning
the French translation of the word "prevent". Moreover, the French
delegation is of the opinion that the sub-committee which will
consider Article 25 should give the utmost attention to the
Australian amendment with which the French delegation fully agrees. G - - 6 _ P E/PC/T/A/IV/19.
CHAIRMAN (Interpretation): Gentlemen, I believe that
we are all agreed. to accept the Australian amendment as to its
substance and to refer the actual terms which were being
put in the Dr: t to the Sub-Committee.
Are we ael agreed, Gentlemon?
We shell pass on to the other Amendments.
The Delegate of Norway.
Mr. MA&NDE Norway): M.r.Chairman, we have an Amend-
ment on 2 (a) whiche. win as cnotincludd Doument W/223 because
it came perhaprs a little late. It refers to the last para-
graph of 2 (a) and the proposal is to replace the words,
1st July 1949, by 1st March 1932.
The reason why we suggeswt that is that e think that the
rulest apeplicabe conto he xchangocotrol regulations as laid
down in Article 14 off the Monetary und Agreement ought to
apply in a paralleel way to Articl 25 2 (a). That is the
purpose, and. that would lread to the alteation we have
suggested, as the Monetary Fund, started. operations
on lt Marandmch last year, seas Article 14 3tion 4 refers to
a 5-years period in the course of which the exchange control
regulations shall be brought to an end.
CHAIRMAN: The Delegaete of the Unitd States.
RMr. OSCARS sReYDVTUMiteCdairm ct c : It (bv, as I
p::eted. fter the fixed date
understood the rAuendmentles. atn m/was no discussed, it was
refmaerraed autotticlly Ctmo he Sub-omitte.
CHAIRII1nterpretation): That was indeed the rule,
in
However, I personally do not seoeniences whate any/coever
in the Amendmegnt bein discuss.ed here G - 7 - E/PC/T/A/PV/19
The Delegate of the Netherlands.
Mr. SPEEKENBRINK (Netherlands): Mr. Chairman, I think
I would like to have it discussed here because this is an
important proposal. I would like to draw your attention to
this - that as the state of affairs is now, the Charter and also
the ITO would be very optimistic if they considered being in
existence before the middle of next year, or even later, so
if we put in here a date so early as 1st July 1949, we ask
practically immediately the ITO to start considering whether
it Should extend the period in the case of every country.
I therefore do believe that an extension is wise. I do
not know whether we should have 52, I have not made up my mind
on that, but I think it is a little bit optimistic to put in
here the date, 1st July 1949.
CHAIRMAN (Interpretation): Gentlemen, it is quite
obvious since this Amendment was presented at a late stage
that certain Delegates will ask for a certain period of
reflection.
Therefore I shall ask the Delegate for Norway whether he
will consent that his Amendment will be discussed somewhat later.
Mr. MELANDER (Norway): Yes, that is allright.
CHAIRMAN (Interpretation): Gentlemen, I am informed that
a new Amendment will be submitted by Mr. Coombs in relation to
paragraph 2 (c). I shall make on this new Amendment exactly
the same remark I made before. I do not know the contents of the
Amendment. It is probable that we shall need time to think it
over. Therefore I will ask Mr. Coombs to tell us briefly the
purport of his Amendment. G. - 8 - E/PC/T/A/PV/19
Mr. COOMBS (Australia): Br. Chairman, we are not
specifically putting forward an Amendment covering this point,
because we. are not certain it is necessary. But I wait to
raise the point, so that when the Sub-Committee comes to consider
this question we can assure ourselves that the point is adequately
covered. We do not wish to present an Amendment.
Briefly, the position is that 25 2 (c) as it stands
approves the exception, of Import and Export Prohibitions and
Restrictions which are necessary to the application of
Standards of Classification and Grading of Commodities.
Now we in Australia do conduct a number of marketing
schemes of the kind which this Article is intended to deal with.
Some of these are covered adequately by articles 32 and 33,
there they do actually buy and sell the commodity concerned.
In other cases, however, they merely lay town conditions
of purchase and of sale, and for their operation by that means
the frequent practice is to require them to obtain export
licenses which are granted. perfectly freely on condition they
conform to the requirements which are necessary. For instance,
to quote one example, we do have a marketing scheme which covers
butter, and. we do provide that export licences are required which,
as I say, are granted completely freely, provided that the
requirements of the marketing scheme are adhered to
One particular purpose for which this control is used is to
spread the supplies of butter on to the normal market over a
rather longer period than they would. be, nor mally, if the marketing
were left completely free. - 9 - E/PC/T/A/PV/19
This has advantageous results both from the point of view
of Australia as the producing country, and of the consuming
countries to which the butter is exported. It means the
maintenance of a stable flow of supplies and less instability,
therefore, in the prices of the product. It is not used in
any way which could be reasonably described as restrictive over
the period of the operation of the scheme. We are uncertain as
to whether the present wording does clearly authorize procedure
of that sort. We believe that such procedure is strictly in
accordance with the purpose of this Article, and that the Board
conducting this marketing procedure is guided by strictly
commercial considerations, and that the procedure is in the
interests not merely of the selling party but of the buying parties
as well. We would wish, therefore, to have it clearly
established that this Article authorizes procedure of that sort.
We are content with the present wording so long as we are so
assured. If there is any uncertainty about it, we would wish
to have an amendment to go in which would clarify the issue.
CHAIRMAN: The Delegate of the United States.
Mr. Oscar RYDER (United States): It seems to me that the
question of the Delegate of Australia might be referred to the
sub-Committee, as I think there is no question that the kind
of marketing regulations described by the Delegate of Australia
are intended to be permitted by this Article, and if to is
necessary to clarify that by a note or even an amendment to the
text, it would be agreeable to my Delegation.
CHAIRMAN: The Delegate of Canada.
Mr. J.J. DEUTSCH (Canada): Mr. Chairman, I agree with
V E/PC/T/A/PV/19
the remarks of the United States Delegate that the type of
scheme the Australian Delegate describes should be permitted,
and if the text does not now :provide it, it should be so stated.
CHAIRMAN (Interpretation): Gentlemen, are we all agreed
that the question should be considered by the sub-Committee?
(Pause). We all agreeapparently. We pass on now to
paragraph 2(d), which deals with exceptions to the agreements
on basiu commodities. We have, however, two amendments
which tend to change the place of this paragraph and to
transfer it to Article 37. If this is done, paragraph 2(d)
will not only list exceptions to Article 25 but will list
all exceptions to Chapter V. I personally believe that
this matter could be usefully referred to the sub-Committee,
provided the Delegations concerned agree with this point
of view.
The Do legate of the Netherlands .
Dr. A.B. SPEEKENBRINK (Netherlands): Mr. Chairman,
before you refer this matter to the sub-Committee, I would
like to state that the position in not so simple as it seems
here. In this connection I would like to refer to
E/PC/T/W/207 in which the Netherlands Delegation proposed
a new Article 57A. The argument we put forward was that
we have many parts of Chapter V dealing with the subject
of Chapter VII, and we thought it might be useful not to
overburden Chapter V with cross-references to Chapter VII.
I therefore wonder whether it is sufficient to refer this
small point of paragraph 2(d) to the sub-Committee who have
to look into the whole matter of Chapter V and Chapter VII,
- 10 -
V E/PC/T/A/PV/19
but I would not like to let paragraph 2(d) to to the sub-Committee
without having referred to this proposal.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. JHACKLE (United Kingdom): Mr. Chairman. I am bound
to say that I feel very loubtfuI about the proposal contained in
the Netherlands paper W/207. It seems to me than the procedure
involved in Chapter VII is a lengthy, complicated and rather
cumbersome one, and I should be very sorry to see it having to be
invoked under any one of the large number of Articles of the
Commercial Polices Chapter. It is suggested here that it might be
brought in not only into the present Article about subsidies,
but also into the maximum price margin under state trading Article _.
32); Import restrictions (Article 25, 2(e)), the paragraph we
are now about to discuss. antidumd cpitervailingng anou duties
(Article 17), and also other proposed exemptions under Chapter V.
Well, I cannot ehelp feling that if the whole mechanism of
Chapter VII has got to be brought into play underne each o of
these Articles, a greet part of the Commercial Policy Chapter is
going to be practically unworkable, and I am bound to say I do not
like the proposal.
V
- 1l ER
- 12 - E/PC/T/A/PV/19
Dr. A.B. SPEEKENBRINK (Netherlands): Mr. Chairman, may I
just answer one thing. It was not my intention that we should have
this discussed. I can quite see that other delegations might have
objections, only I think it does throw a clear light on the main
points where Chapter VII touches on Chapter V, and the only reason
to
why I refer to this is that when it comes to referring/one paragraph
taking the place of another paragraph under Article 25, it might be
useful to look into the whole problem, and it is the only reason for
my argument at the moment.
CHAIRMAN (Interpretation): Does the representative for the
Netherlands see any objections to the question being referred to the
Sub- Committee for consideration? The Sub-Committee will make
due allowance for the statement now made by the representative of
the Netherlands.
Dr. A.B. SPEEKENBRINK (Netherlands): I am in agreement with
you, Mr. Chairman, if the Sub-Committee will contact the other Sub-
Committee.
CHAIRMAN (Interpretation): Does everyone agree on this point?
Agreed.
Mr. L.C. WEBB (New Zealand): Before we pass to (d), could I
raise one point in connection with this sub-paragraph? I understand
the view referring to the general proposal to transfer the substance
of (d): to Article 37, as not being a matter of great substance, but
I would draw your attention to the matter raised (at the top of
page 5 of W/223) on the United States amendment which, in fact,
proposes what I think is a change of substance in that it proposes
that the exception here should only refer to regulatory inter-
governmental commodity arrangements. That seems to me to be a - 13 -
E/PC /T/A/PV/19
question of substance, but I would point out that the Committee which
is dealing with Chapter VII has a proposal which, in effect,
demolishes this definition of regulatory intergovernmental commodity
arrangements. It seems to me that there is a slight point of
difficulty here, and it is very much a question of substance whether
this exception refers to all intergovernmental commodity arrangements
or only to one type of them.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, we thought
in the case ofour proposed amendment and the United States amendment,
have to
that we should/wait for the revision of the Sub-Committee on
Chapter VII. I am bound to say that apart from the revision made
by that Committee, we ourselves see no objections to the inclusion
of the word "regulatory". Regulatory agreements were contemplated
and is the
in the New York text,/that/type of question which would
arise, but it seems to me that possibly it may be difficult to come
to a decision on the precise wording of this new paragraph for
Article 37 at the present moment until there has been an opportunity
of seeing how Chapter VII has been changed in the Sub-Committee.
with
We might possibly content ourselves / discussing the
wording
principle of Article 37, while leaving the precise/unsettled for the
our feeling was that may
moment. I think/it may well haopen that commodity agreements/involve
agreements
other things than merely quantitative restrictions. There may be /
about subsidies and tariffs and other things, and therefore it is
a wider one
desirable to make the exception/than in the present Article on
quantitative restriction, but as I say I think the precise
formulation will have to wait until we have seen what has happened
to Chapter VII. - 14 -
E/PC/T/A/PV/19
CHAIRMAN: Mr. Ryder.
Mr. Oscar RYDER (United States): I want to express general
agreement with what the British delegates has said. It seems to me
it will be initially for the sub-Committee on Chapter VII to deter-
mine the character of the provisions in Article 37, and for this
Commission finally to adopt or reject them.
CHAIRMAN (Interpretation): Does any other delegate wish to
speak on the subject? It seems to me that it would be wise to
wait for the final rate of Chapter VII before we embark upon a
general discussion. We shall therefore postpone the discussion
on this amendment.
Paragraph 2 (e). We come now to a discussion on paragraph
2 (e). Numerous amendments have been presented dealing with this
paragraph. I Direcall that the paragraph intends" to restrict the
quantities of the like domestic product permitted to be marketed
or produced." Two delegations, that of China and the Netherlands,
have submitted amendments proposing to replace the word "restrict"
by the words "to regulate the quantities", and then to add also the
words "or stabilise the prices of such produots."
We also have an amendment submitted by the delegation of Norway.
This delegation also prefers the word "regulate" to the word
"restrict." However, the Norwegian delegation wants to spread the
provisions of sub-paragraph (e) to similar derived products.
I think we might begin our discussion by one of the amendments
which have been submitted to us.
R.T. SHACKLE (United Kingdom): I think there are three para-
graphs here which should be read together. First of all, there is
that part of the Netherlands amendment which introduces a refer-
ence to "like or a directly competitive domestic product." Then
there is the Norwegian proposal which dealeswith "domestic products L . E/PC/T/A/PV/19
wholly or in part produced by the imported commodity". Thirdly,
there is the point of the interpretation which we have given notice
to naisol'n. I do not know whether it is worth while to raise my
point now, but. it might possibly be convenient for me to do so,
because the connection which I see between then may perhaps become
clear.
I will deal with the point by way of a practicalexample. It
may become necessary for us in the United Kingdom to regulate the
landings of fresh fish from British fishing vessels, so as to avoid
as far as possible the glut landings of fish that happen from time
to time which, of course, make the price. suddenly collapse. In these
circumstances, we should have to regulate. imports within the provisions
of this Article so as to counterbalance the regulation of the landings
of the home caught fish. Clearly, it is no use regulating the landings
of home caught fish if fish caught by other countries'fishing boats
can be brought in and produce those gluts which the scheme would be
designed to avoid. Under these circumstances we should have to
regulate imports within the provisions of this paragraph, and that
would mean that the requirements as to maintaining the proportion
between the homo eaught and imported fish must be related to the
proportion in a previous representative period, subject to any special
factors that may affect the position. It is quite clear that it
would be impossible to work a satisfactory scheme of that kind if we
fresh
can regulate the fresh fish - fresh herings or/haddock - in that
way, but could not at the same time regulate the imports of those fis-
at the next stage of processing, that is to say, smoked herrings and
smoked haddock, and that for two reasons, because in the first place
the fresh fish is a raw material from which the smoked fish is made,
and secondly, because the smoked fish competes directly with the
consumer of the fresh fish.
- 15 -
. , _ _ , - 16 -
So we assume that the country with a regulatory scheme of that
kind would be entitled, for example, to regulate imports not only
of fresh fish, fresh herrings and haddock, but also of smoked
herrings and smoked haddock. This regulatory scheme could not be
worked satisfactorily if that were not the case.
We think that that is, in fact, the intention of this paragraph
as it now stands. It speaks of fisheries products imported in any
form, and on our interpretation, what I have said would fall within
the words of this paragraph, but I would like to make sure that that
is the view of this Committee.
I should. say that while I have quoted instances about fish,
those are not necessarily exhaustive. The question may also
arise as regards other agricultural products, but the most obvious
cases do concern fish. I hope I have made myself clear.
I think I will hand in to the Secretariat in due course a
paragraph which says briefly what I have now said, so that it might
go on record, and if desirable the sub-committee could look at it
before making up their minds. I think I will now hand the
paragraph over to the interpreter.
I should, perhaps, add this: that it does seem to me that in
connection. with the Norwegian and Netherlands amendments on this,
unless I misunderstood them, they deal with this same point that
the regulation on fresh products may be circumvented by imports of
that product in the next stage of processing, that is to say, in the
case of smoked. fish as compared with fresh fish. Thank you.
CHAIRMAN: Monsieur Speekenbrink.
DR. A.B. SPEEKENBRINK (Netherlands): Mr. Chairman, if I may
just add an augmentation to that of Mr. Shacklel's. We think
that once you have taken a position to restrict or regulate
J.
E/PC/T/A/PV/19 - 17 -
J. . E/PC/T/A/PV/19
quantities of imported products for various reasons in the economic
and social field and you intend there to stabilize the price of
such products, with these considerations, it is not sufficient that
you will only restrict, for instance, the import of wheat, where
you have maize and rye and products that could be used, to a certain
extent, for the same purpose. Therefore, we propose to have here
"the like or a directly" - I repeat "directly" - "competitive
domestic product". It is not our intention to look here for a
new escape clause or something like that, but we do not see how we
can ever work a measure of a scheme as proposed in this paragraph
without extending the scope of these commodities to this directly
competitive product, thereby fully, submitting to the judgment of
the International Trade Organization and its bodies.
I then return to the arguments of Mr. Shackle. I cannot see
much difference, for instance, between wheat and rye and between
smoked herrings and haddock, and I will even go further - he talked
about smoked herrings, well that is one stage further. I am still
in the first stage when I discuss competitive products here. E/PC/T/A/PV/19
CHAIRMAN (Interpretation): The Delegate of China.
Mr. TUNG (China): Mr. Chairman, the Chinese Delegation
attaches a great deal importance to the provisions of this
sub-paragraph, We have submit ted Amendments in the Drafting
Committee to minimize the effects of these policies on the
national economy of agricultural countries. We feel we have
to conform our position to the present proposal for the
following reasons.
In the first place, an under-developed. country like
China, with the livelihood of most of her people dependent on
agricultural economy, regards the price structure of her
agricultural products as of vital importance. It not only
affects the standards of living among masses of her population,
but also determines the success or failure of any attempts
at industrialisation. The Government of such a country must
be able from time to time to adopt prompt and effective measures
to regulate the variety and quant ties of agricultural products,
in order to stabilise their prices and maintain a proper
balance between foodstuffs and raw materials on the one hand
and industrial manufactures on the other. Yet this is extremely
Difficult to achieve under the Draft Charter as it now stands,
for it fixes a prerequisite condition in the form of a
proportion between the domestic output and imports of agricultural
products.
The second point is that the rigid provisions of paragraph
2 (e) will prevent an agricultural country from developing her
own capacity of production and perpetuate her dependence on
external supplies to meet her vital requirements. Such a country
may have been compelled for long periods in the past to import
large quantities of agricultural products on accountof natural
G
- 18 - E/PC/T/A/PV/19
calamities, social disturbances or simply transport
difficulties. Yet none of these temporary emergencies is an
adequate reason why that country need or should. permanently
depend on foreign supplies. As soon as these emergencies
have passed and order has been sufficiently restored, the home
supply of such products would tend naturally and steadily to
increase, accompanied by a corresponding decrease in the demand
for the imports of like products. If, however, she were
forced. to couple this decrease with a proportional reduction
in the quantity of domestic like products, as purported by
the Charter presented by the New York. Drafting Committee, the
effect would be highly disastrous. It would impair her capacity
to supply the major portion of her own needs and perpetuate her
reliance upon foreign food and raw materials to feed her people
and her vital industries It would, moreover, cause a heavy
drain on her foreign exchange resources which might otherwise
be available for the purchase of foreign capital goods. Such
an unfortunate result would be contrary to the aims of this
Charter and would render nugatory its provisions for assistance
in the industrialisation of under-developed countries.
The third reason is that the supply of these agricultural
imports, on which a Member county is made to rely so much to me et
her vital needs, may not be always reliable. Natural disasters,
social unrest, transport breakdowns may also operate at any time
in the sources of supply, and thus cause serious interrupt ions to
a steady flow of products from the supplying countries. Again,
for unforeseen reasons or an economic or political nature, these
countries may be compelled to make sudden adjustments of
production and exportation, thereby severely curtailing their
customary supplies to the said Member country.
- 19 -
G. G
- 20 -
E/PC/T/A/PV/19
This would certainly result in an abrupt and uncontrollable
price disturbance in her home market and might even lead to
widespread. starvation and unremediable dislocation in many of
her industrial enterprises. It is, therefore, highly arbitrary
and unfair to tie the economic destiny of a Member country
to unpredictable external supplies by a rigid formula of
proportional reduction as set forth in paragraph 2 (e) of
Article 25.
For these reasons the Chinese Delegation strongly recommends
the adoption of the foregoing Amendments, including the deletion
of the last three sentences of the said sub-paragraph in the
original draft.
Mr. Chairman, the Chinese Delegation does not only object
to the reduction of products, we also object to this fixed
proportion which is set by the sub-paragraph between
agricultural imports and domestic products; and we are ready
to agree with the Netherlands and Norwegian proposals in re-
wording the first sentence of this sub-paragraph; but we insist
on the deletion of the last three sentences in the original
Draft. - 21 - E/PC/T/A/PV/19
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman , if I may
I should like to refer to my previous remarks and also to those
made by Dr. Speekenbrink. It is quite clear from what
Dr. Speekenbrink has said that his case is not like my case.
He has in mind two products in the same stage of processing.
I have in mind one and the same product in different stages of
processing. I would like to add just this for Dr. Speekenbrink's
consideration, that, of course, it is clearly open to him, as
the paragraph now stands, if he regulates both wheat and rye, to
regulate the imports correspondingly. On the other hand, in the
case of the fresh herrings and the smoked herrings, we control
all the imports of the fresh herrings. It follows from that
that ipso facto we are put in indirect control on the production
in the United Kingdom of smoked herrings, so there is a diff-
erence there between our case and his case. In our case,
the one product is the raw material of the other, and we
cannot control them both. On the other hand, so far as
I can see, in the case Dr. Speekenbrink has mentioned, it is
not clear on the face of it why both the competing products
should not be controlled. The only other thing I would add
is that it still seems to me that probably the Norwegian
amendment has my point in mind. No doubt the Norwegian
Delegate will explain that to us.
CHAIRMAN: The Delegate of China.
Mr. C.L. TUNG (China): The Chines, Delegation has in mind
that China's big problem is in respect of raw materials. Other
countries also have the same problems, but they have very good
remedies. We have to feed our people and clothe our people
within our own doors. I think it is fair to supply the major
portion of our own foodstuffs and raw materials. We do not want
our economic affairs to be bound by such a fixed law, and so
make China dependent upon foreign supplies which are not always
reliable. The reasons I have already explained in full in the
paper. - 22 -
E/PC/T/A/PV/19
Mr. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
you may recall that, in London and New York, we have made
reservations about this paragraph because we believed then, and still1
believe, that it should not be restricted to purely agricultural
products and products coming from fisheries, but should also apply
to industrial products. If we had to go by the principle of
equilibrium andjkustice, and ifw e had to abide strictly by the
provisions of the Charter, we should suggest deleting this
paragraph. H owever, in asking that certani measures be aketn in
order to protect the industrial products of industrially rather
backward countrie,s we recoginse that othre countries may request
that the same measure should be applied to develop their agricultreu
ro their fihersies. In studying the text of het New York Draft, we
see that provisions tendign, to restrain them raetk quantities of
market
similar/products were limited in it, ald have now been cnsoierdably
widened, and that boisde the concept of regulating we found a new
concept of stabilising as wlel. Furtermhore, ew have formulatde
that provisions were limited to similar national products now that
the provisions have been xteneded to competitivepr oducst. This
question has already raised many conrevprtises, andpr obabl ywill go
on doing so. uF we see that there is a new notion here
of poducrt wholly ro in t * ared, and we wndoered whethe foir
the sake of logic, and if we ed not awnt to dleete hisj paragraph,
fi would not bea disavble to add X -gn to id.ustrial
pordcuts with all deure servaionst of co ruse. Icidentallyn, I find
that, ufrhetor on in the same tet,m there are ame ndments tending to
achieve that objec.t Our nitnetion isto sppuort theseam endments,
which tend to dad thesep orvisions, ubt if htey souhld be adopted
here, we would have to abide by the rservations that e w haeve a ready
made in London and eN Yorwk. - 23 - E/PC/T/A/PV/19
Mr. B.N. ADAKAR (India): Mr. Chairman, in connection with
this discussion on sub-paragraph 2(e), I would like to draw your
attention to a reservation made by the Indian delegation in London
and in New York, which has been referred to on page 8 of the
Annotated Agenda. The amendment suggested by the Indian delegation
on this paragraph is more or less similar to that suggested by
China, and so far as the concept of stabilising the prices of
primary products is concerned, I think it is incorporated in the
amendment suggested by the Netherlands delegation also. I would
only add that our main reason for suggesting this amendment was to
provide for a situation in which import regulation becomes necessary
the
in connection with/domestic scheme for stabilising the prices of
primary products, even when the primary products concerned are not
in surplus supply. Under the draft as it stands, it is possible to
introduce import regulations only in connection with measures which
operate to restrict domestic production or market. Restriction on
production is necessary only under surplus conditions, but in
countries which depend on primary production to a very large extent,
on their
and/the stability of which/economy depends - the stability of the
income of private producers - schemes for stabilising the prices of
primary products are necessary, even under normal conditions whether
the normal supply position is of shortage or of surplus. If such
schemes are to be efficiently operated and managed, it is necessary
that governments concerned should have effective control over
supplies as well as prices, and therefore it is necessary that the
governments should have power to regulate imports even when no
measures are found necessary to restrict domestic production or
markets. It seems to us, therefore, that the insertion of the
words "regulate production or marketing is an improvement. So far - 24 -
E/PC/T/A/PV/19
as the question of stabilising the prices of primary products is
concenned, I am inclined to think that if the words "regulate the
production or marketing of such products, or marketing of likely
domestic products" are inserted, then that might perhaps dispense
with specific reference to the concept of stabilising prices, because
any scheme which seeks to stabilize prices will, in most cases,
Involve regulation of production in the market of domestic products.
Therefore, if the word "restrict" is retained, it will be necessary
to make a specific reference to the other objective of stabilising
the price of domestic products. But if that word were replaced by
"regulate" then the specific reference to stabilising the price of
domestic products would not be necessary. - 25 - E/PC/T/A/PV/19
As regards the other suggestion made by the Chinese delegate,
which was also rade by the Indian delegate on another occasion,
namely, the deletion of the last three sentences in this sub-paragraph,
beginning with the words "moreover, any restrictions applied" which
requires a fixed proportion to be maintained between domestic produc -
tion and imports, I would point out that this question is directly
related to the other question of permitting the use of quantitative
restrictions for protective purposes, because the idea underlying
the suggested provision is to prevent the use of quantitative
restrictions for protective purposes, that is to say, for c 'L ,n
Securing for domestic products a greater share of the domestic
market. We have prepared an amendment on this subject in the form
of a separate Article under Article 26(a), but we would be quite pre-
pared to leave the consideration of this paragraph until after a
decision is arrived at on the other amendment.
On the present occasion I would suggest for the consideration of
the Committee that whatever the merits of the position of allowing
a fundamental restriction on quantities are, that restriction should
not be applied to any situation in which agricultural products are
in surplus supply. After all, it must be recognised that domestic
producers have a prior claim on the domestic market. If, in a
country which is dependent on imports the domestic market is all
the domestic producers have, they have no alternative but to sell
their entire product to the domestic market. The importers have the
opportunity of going to other markets, but the domestic producers
are absolutely helpless in a situation in which there is a local
surplus. We therefore suggest that the application of this principle
should be modified in this particular instance, but we would be quite
prepared to reconsider the position of this paragraph after a decision
has been reached on the other question. - 26 -
L. E/PC/T/A/PV/19
Mr. DEUTSCH (Canada): The Canadian delegation has always
had great difficulty with this sub-paragraph. We are quite
sympathetic to some of the remarks that have been made by the
delegate for Chile. It does seen to us that if we have regard to
the logic of this Charter, and if we have regard to maintaining a
fair balance between agricultural and industrial products, that we
should delete this sub-paragraph. It does draw a distinction
between the treatment that has to be accorded to agricultural exports
and exports of industrial products. This sub-paragraph would allow
the imposition under certain conditions of quantitative restrictions
against agricultural products. That is not permitted in the case
of industrial products, and therefore there ison the surface, and I
think fundamentally, a distinction here in the treatment of countries
that are dependent upon industrial exports and those that are
dependent upon agricultural exports. The Chilean delegate has
suggested the ultimate logic of this is that we should allow the
same privileges to countries that import industrial products. There
is a good deal of logic in that position. However, we would like to
see neither si tuation; we would like to see the same treatment
accorded to both which would be the result if this sub-paragraph were
deleted.
However, there have been arguments made in support of this
sub-paragraph, arguments that one can understand, namely, that
countries that are confronted with difficulties with agricultural
producers, confronted with the problem of burdensome surpluses
can only be corrected by the adoption of a programme of adjustment
by the Government, involving the control or restriction of product on.
The theory of the sub-paragraph as it now stands is that if a country,
it order to deal with a burdensome surplus of agricultural production,
adopts a programme which involves the restriction of production so as L. - 27 - E/PC/T/A/Pv/19
to overcome the surplus, then that country may impose quantitative
restrictions against imports. That is the theory of the paragraph
as it is now written. The justification is that there is very
little purpose in restricting domestic production if at the same
time you allow imports to come in freely. One frustrates the
other. If you are really to restrict domestic production, you must
also restrict imports. There is logic in that argument. - 28 - EC/PC/T/A/PV/19
Of course, the same logic, perhaps, could be applied to
industrial goods, but a distinction is made with agriculture, which
is much more difficult to deal with than industry. But now,
Mr. Chairman, these amendments seen to us to destroy any logic
there is left in this sub-paragraph, and if these amendments are
adopted, then I suggest that the Chilean delegation's arguments are
unnecessary.
The first amendment I wish to consider is the substitution of
the word "regulate" for the word "restrict". New, the word
"restrict" is very important here, because it is addressed to the
correction of a problem, namely, the problem of cealing with an
unmanageable surplus, and we are trying to restrict production to
deal with the unmanageable surplus, and if you restrict production
therefore you have to restrict imports, out if you substitute the
word "regulate", it may mean anything; it does not require
restriction; you may have any kind of programme about agriculture;
it may even mean increasing production in a regulative fashion.
It may mean any number of things, and therefore the loigic of this
would be entirely destroyed. In other words, if you do anything
about agriculture in the way of a government programme, you can
restrict imports. This is what it comes down to. Now, it seems
to me that if that change is made it would destroy there any logic,
if there is any left, in support of this particular paragraph.
Another consideration has now been introduced, namely, to
stabilise prices. In other words, if you adopt the programme to
stabilise prices, you will get an exception from the rule against
quantitative restrictions. That is an entirely new idea as far
as this Charter is concerned, and why limit it to agriculture
purely? It would greatly extend. the application of this paragraph
if, every time you had any kind of a programme which stabilised -29-
J. E/PC/T/A/PV/19
prices, then you could apply quantitative restrictions against
imports. Now, that seems to us to widen this very greatly.
Finally, the suggestion is that we should be allowed to
regulate the quantities of the like or a directly competitive
domestic product. There is some logic in the argument that has
been made there, but it would seem to us that if the import
of adirectly competitive product is to be restricted, then the
domestic production of that article should also be restricted. I
think the remarks of the memberfor the United Kingdom are very
pertinent in that connection, that is, if you want to control the
imports of a directly competitive product you should also, at the
same time, according to the logic of this argument, restrict the
domestic production of that same product. It is always open to any
country, if it can meet these conditions where it is necessary to
control quantities of a directly competitive product for the reasons
given in this paragraph, to restrict the output of the domestic
product, and then it may restrict the imports of the same product.
But if it cannot meet the conditions specified, then it should. not
have the right to control the imports of those products. Again,
the net effect of this additional "like or a directly competitive
domestic product" would be to widen the application of this Article.
For these reasons, Mr. Chairman, we take a very serious view of
these amendments. It sees to us that they would destroy the basic
logic of this sub-paragraph, insofar as there is any logic to it,
and would take us very far afield in the general balance and general
structure of this Charter, and we would get to the position where
the remarks of the delegate of Chile, to our mints, would, be
unanswerable. Thank you. G
- 30 -
E/PC/T/A/PV/19
CHAIRMAN: The Delegate of Czechoslovakia.
Mr. AUGENTHALER (Czechoslovakia): Mr. Chairman, I think
that we have recognised in our work until now that there is some
substantial difference between primary commodities and the
manufactured articles; and that it is, more or less, also the
basis of the Amendments presented here.
I would like to state that we are in favour of the
Netherlands Amendment as it stands here, because it is short
and it is clear. Now, on the other hand, we are framing here
certain rules for certain occasions. It may be that some
countries are following the same aims by means of other
procedures or by means of other instruments, such as, for
instance, the State monopolies or State tradings; and that is
why we think that when Article 32 has to be formulated there should
be in article 32 no provisions which would request from
countries following the same policies as here,which would
discriminate,or which would. impose some other duties than those
imposed upon countries here according to Article 25 2 (e).
Thank you.
CHAIRMAN: The Delegate of Brazil.
Mr. RODRIGUES (Brazil); Mr. Chairman, after reading in
my country paragraph 2 of Article 1 of the Charter, which reads-,
"To further the enjoyment by all Member countries, on equal
terms, of access to the markets, products and productive
facilities which are: eeded for their economic prosperity and
development", we think we presume to give up too many
quantitative restriction, and should try to follow as much as
possible the tendency of the Charter drafted by the United
States; and. because we believe sincerely in that drafting, which E/PC/T/A/PV/19
in general was aiming at 4 better situation for international
trade, we came to this second Preparatory Committee.
Especially in regard to negotiations we tried to co-operate, and
we made a lot of reductions and gave concessions in such a
way as to show very clearly our desire to reach a position
that could be a stone in that building we are trying to build
here.
Everybody knows that Brazil had, before the war, semi-
restriction, and a very stiff legislation about the importation
of some goods; but we are giving up all of these restrictions.
But what we think most of all in our discussion here is that
we are going very far from the first drafting, and countries
like Brazil, which are less developed, and which follow with
all sincerity, and with a real desire to co-operate, this
draft, now are having a very sad experience.
We are in a position of not being able to explain well
our attitude here in regard to our acceptance of the rules,
which, in the first moment, would be looked at as being against
our interests; and now we have to accept measures which are
being designed and suggested by countries in a better state of
industrial development which are really unfair, especially if you
take into consideration what the Delegates for Chile and Canada
have explained so well.
Because of this I can not agree with the Amendments presented
with regard to paragraph 2 (e), but I would suggest that the
Amendment presented by the United States on page 10 of this
Report should be approved; otherwise we have to reserve our
position and be strongly against any other measure which is
going very far from the Charter in which we believe, and upon
which we take up our attitude here.
- 31 - V - 32 - E/PC/T/A/PV/19
CHAIRMAN: The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, the Norwegian
Delegation is in agreement with those Delegations who have
expressed the view that quantitative restrictions ought not to
be allowed to be used as a protective measure as a general rule.
We are in full agreement, consequently, with the principle laid
down in Article 25, paragraph 1.
In regard to the exceptions in paragraph 2, and especially
2(u), with which we are now dealing, we think that the general
view that quantitative restrictions ought not to be applied
ought to be kept as the background when we discuss this Article.
On the other hand, I think that we have recognized during the
discussion of the different Articles and Chapters of this Charter
that there may be a necessity to distinguish between agriculture
and agricultural products and manufactured goods.
The problem of protecting agriculture is reallylsnot a problem
akin to the protection of industry. The problem of protecting
agriculture is a problem of a different order. It is not only
a question of the standard of living, but there are also other
implications, as I think all the countries in Europe which have
been o coupled during the War will attest to.
Now, in regard even to agricultural products, we think that
to use quantitative restrictions even then we ought to be very
careful, and to very carefully define the cases in which one ought
to be allowed to use these measures for protective purposes.
To start with the general remarks which have been put forward
by some Delegates here, I think that, generally speaking, we
would be in agreement with those Delegations who have expressed
grave doubts as to the rightness of extending these provisions
to, for example, covering the stablization problems and to certain -33 -
V E/PC/T/A/PV/19
other aspects. Further, we think also that one will have to be
very careful in extending the regulation in paragraph 2(e) to
cover not only like but competitive products. That, we think,
is of a dangerous character and one has to consider at very
carefully.
In regard to agriculture, on the other hand, it may be
that it would be necessary to introduce certain alterations, The
alteration which we ourselves have put forward has one very
limited objective. The text which we have produced does not,
perhaps, clearly indicate what we have in view, so I would like
in a few words, to indicate that. What we have in view is
that the production in Norway of meat, eggs, bacon and so on
has, generally speaking, tended to increase to such an extent
that it has been necessary to restrict it. That is our
experience during the inter-War periods. Now, in order to
restrict that production we could introduce regulations of the
kind already indicated here; but we have come to the conclusion
that the best way in which to restrict the production of, so
to speak "finished" agricultural products, namely, meat,
bacon, eggs, milk and so on, is to restrict the importation of
agricultural feeding stuff.
When I say "restrict the importation of agricultural
feeding stuff" I have, of course, in mind that some Delegation
might then say, "Well, if you restrict the importation of
feeding stuff you have to restrict the production of feeding
stuff in your own country". The reason why we have not
Suggested that is that there is really only a very limited
production of feeding stuff in Norway at all, and the possibility
of increasing it is very limited - practically nil; so that
throught the restriction of imports of feeding stuff we do not -34 - E/PC/T/A/PV/19
protect Norwegian production. If we should restrict that little
cultivation of grass, of whatever it might be which would be the
parallel rule here, it would imply administrative measures which
would really be too big and too expensive in relation to the costs.
Therefore I would make it clear that when we introduce this rule
to restrict: the importation of feeding stuff in order to restrict
the production of meat, milk, eggs and so on, that is not in order
to protect the production of feeding stuff in our own country.
That is really the only purpose of our amendment, and it is limited
to that very clearly defined purpose. ER
-35 -E/PC/T/A/PV/19
Now, with regard to agricultural products, our opinion is that
fishery products ought not to come within this general rule at all.
We think that when it is possible to conclude a commodity agreement
on fishery products, which would be possible under Chapter VII, it
would not be necessary to introduce these rules here as applicable
to fishery products. That is our general standpoint, and the
reservation we made in London is maintained here. I would also
mention one point in this relation, especially in relation to the
remarks made by the delegate of the United Kingdom. He mentioned
that, if there is a question of limiting the catch of say, fresh
herrings, by British fishing boats in the North Sea because many
boats come in and, so to speak, dump the catches on the market, he
says that it would be necessary, for example, to limit the amount
of fresh herrings and fresh fish from the Norwegian, Swedish and
Icelandic boats as well. Well, I think that there is little to be
said for that, but I think that can be covered by the commodity
agreements, and it ought not to come under this regulation here.
But then, when he said that he would not only need the right to
prevent fresh herrings and fresh fish from coming to the United
Kingdom from abroad, but also he would need to prevent, for example,
smoked herrings or sardines from coming in, I cannot see any
analogy at all as those fish products like sardines and smoked fish
and, to the same extent, dried fish and so on, can be stopped.
If they are sent in to one country they can be stopped there and
need not be consumed immediately. They can be stopped for many
years, and consequently his argument, as far as I can see, applies
only to fresh fish because there you have a possibility of stooking
it. You have the position there that, if they cannot be consumed
they rot. That is a point which should be considered, but I think
that should be covered under commodity arrangements and not those
regulations here. That is generally how we consider these Articles
and the amendments which have been so far produced. E/PC/T/A/PV/19
L. 36
M. PIERRE FORTHOMME (Belgium) (Interpretation): The Belgian
delegation were never very happy about the exception which was in-
serted in sub-paragraph (6) of paragraph 2 of this Article; however,
we finally accepted it with great reluctance. But we went to explain
that this exception limited the exact aim we have in mind. We
would remind you that in New York the Belgian delegation insisted on
introducing the notion of the incidence of seasonal variations in
the price and rules applying to agricultural products. This is
a notion widely applied in customs and tariffs and we all know
there are various rates in tariffs according to the season when an
agricultural product is imported. I would like, in addition, to
ask a question. The Norwegian delegate has explained his amendment
as being of a very limited application, and that the draft of his
own amendment might be broader than the intention of the Norwegian
delegation itself. I want to know what is the exact extent of the
exception in the last sentence of the Norwegian amendment, - "This
rule shall not apply to products used in the production of domestic
agricultural products", etc. If this rule applies to the whole of
sub-paragraph (e), then have no objection to it, but if this
rule only applies to the sentence reading: "moreover any restric-
tionsapplied under (i) above, shall not be such as will reduce the
total at imports relative to the total of domestic production" and
so on, then we consider the Norwegian amendment applies the principle
of unlimited restriction of any production which might be used, such
as the production of fertilizers, binder twine, etc.
Mr. E. McCARTHY (Australia): The Australian delegation finds
itself rather questioning the nature of the amendment proposed to
this Article. The Canadian delegate has said quite a lot that was
in our minds but we would like to point out that it has seemed to us E/PC/T/A/PV/19
from the outset that this particular Chapter or Article has been
weighted, in favour of importers of agricultural poducts. It does
appear that it can have the effect of being highly protective, and
the degree to which it would be protective would be at the discretion
of importing countries, in fact, it is not difficult to conceive
an exporter negotiating in a particular agreement a reduction of
duty in an agricultural product, finding that because
some form of government instrumentality was operative in that
country, the value of the reduction of that duty had been offset.
It, is important to consider that exporting countries with their
surpluses which have arisen by reason of the fact that they are
natural producers of the product, have got to sell the product. other-
wise they cannot buy from the countries who are probably importers of
primary products and sellers of secondary products. Therefore, we
feel we should say that we were never happy about this particular
sub-paragraph from the outset. It was in a way broken down by
certain conditions, whereby it was said that where restrictions were
imposed because there were domestic restrictions, that at no stage
should the imports be less than during a representative period.
A good deal of the work under this Charter, and particularly
negotiation on tariffs, was designed to secure greater opportunities
to sell surpluses of primary products, and to sell them under market
competitive conditions. Therefore, a country having a reduction
in duty, with a commodity that formerly never found a market in
a country at all, right now find restrictions imposed, and
would have no redress because over a representative period the im-
ports had not been reduced.
Again, we note the suggestion that if there is a stabilising
proposal in the importing country, it can at its own discretion limit
imports. At what level are the prices to be stabilised?
At considerably above import price? If they are, that is a high
degree of protection. 38
The point we emphasise is that this is taken away from the
of
negotiating field altogether, and the importers/primary products
are, if these various amendments become effective, given a degree
of protection that exporters certainly do not have, and compensation
is not provided by way of increased opportunity for the shipment of
their primary products, - compensation for the relaxation of any
import duties which they are supposed to give under the trade agree-
ment.
We realise that something is called for. We would prefer to
see the sub-paragraph eliminated; we are not saying it again
because we did agree at Church House, to a compromise which was
not very much in our favour and we do not wish to depart from it,
but the se amendments are a distinct widening of the agreement that
was reached at Church House, such a big widening that it justifics
us in reopening our protest and pressing for consideration of the
views which I have just put forward.
I repeat that I realise we cannot have it eliminated, but we
think that in sub-committee some very close attention ought to be
given to the conditions under which it is applied, and careful con
sideration should be given to the question as to whether the power
which undoubtedly has got to be there is not widened too much r
the sub-Committee we hope that these aspects will be carefully
considered.
We would summarize our views by saying the amendment put forward
here taken as a whole gives too much relaxation to the importer of
primary products. They draw mo '^ distinction between the
claims of exporters and the rights of importers to impose so me
restriction. Too much discretion is given to importers as to the
degree of protection they will give themselves under the proposal.
Whilst we agree that the sub-paragraph in some form should remain,
we do not wish it to provide for any greater relaxation for the im-
porter of primary products then is now provided.
E/PC/T/A/PV/19
L. J.
39 - .
E.0. YDEMR (United States): Or.Chairman, our delegation
has studied these amendments which are included in the various
proposals, They are five in number.
uThe first one that I wold like to discuss is the one
incorporatemd. in the amendment subitted by Norway to change the
language to "to regulate the quantities permitted to be marketed or
produced of the like domestic product or of domestic products
wholly or inm part produced by the iported commodity or". Now,
that addition of "domestic products wholly or in part produced by
the imported commodity" has set out what has always been intended
in the language of this paragraph. The intention was to include
the term "in anmy formm" and the sub-comittee ight well consider
whether that phraseology "in any form" does act sufficiently. I
do not think that there is any controversy on that question.
On the second amendment suggested by the delegation for Norway,
I agree with the delegate for Belgiwhium that in the form in ch it
is presented it leaves the door wide open for imports of products
used in producing other agricultural products. That particular
problem might be considered and taken care of by the sub-committee.
A much more difficult problem is raised by the sugggestion in
the amendments proposed by the delegations. of the Netherlands and
China to extend the exceptions to like or directly competitive
domestic products. Now. I am bosnund to say that there
something to be said for that suggestion. Manifestly, if the
Soya
United Statesc should limit the prodution of/oil it might be
necessary to restrict the import of competitive oil, like sunflower
or peanut oil, which is directly competitive, as if they were like
products. I agree, however, with the delegate for Norway that
there is a great danger in doing that, and I think considerable
E/PC/T/A/PV/19 J. E/PC/T/A/PV/19
40~~~~~~~~~~~~40
study of that problede b should becmmmby ethe sub-oomitte which will
be appointed to handle this.
The other twoa amendments tht have been ucproposed are mh more
serious. The first of them would substitute the word "regulate"
for the "word "restrict, and I do not neead to add to wht the
delegate for Canada so well saidg about the daners of that
substitution. To my mind, it would practhically throw te door wide
open to violation of the panrohibition of imposition.
Tmehe fifth amodit suggested is to alelow quotas who they are
domestic meaasures for sctbilizing pries. I should hesitate long
befr expanding the exceptions in this eway. PFrc cstabilization
is 3veery broad tom which may cover a wide diversity of measures
having widely different results. I fear that it would not be
permittced in the ase of measures taken ein the nam of price
stabilization, and the prohibition of quotas contained in this
article will becomee utterly maningless.
The exceptioavns which he alregadey been ared to in this
Article, aticle 26A, and 1in iticlel, have alre-dy seriously
weakened the prohibition of quotas. If, in addition, we have an
exception for price stabilizatiuon, not mch is lMeft. oreover,
I do not see cthat any ase can be made for it.h If te price
stabilization measures have the effect of raising domestic prices
above world prices then there is no occasion for restricting them.
not
eaIf such =ures, however, doe/raise'hndomestic price above world
prices, then the difficulty is that the measures will result in
expanding domestic production at the expenpse of imorts. In this
case, it seems to the Unieted Stats delegation that quantitative
restrictions should not be peurmeitted nlss domestic production is
also restridcted, an, if that is also restricted, then the sub-
paragraph 2(e) as it stands permits the imposition of quotas.
Than' you. E/PC/T/A/PV/19
41
CHAIRMAN: The Delegate of the Netherlands.
Mr. SPEEKENBRINK (Netherlands): I wish to say, Mr.
Chairman, a few words just to explain our position more clearly.
It is that we have proposed these amendments because there are
very grave social problems involved.
We do not object to any consultation. Indeed, we are in
favour of it. I might refer to what we have said about the
close relationship between Chapters V and VII here.
We are in full agreement that we should not do this thing
unilaterally, without consultation and the possibility of
negotiating these things, but we cannot agree at the moment to
this Article as worded in London and New York, because we think
it does not say enough and may also not be clear enough; and
indeed, in the Sub-Committee we will discuss that further and
perhaps come to some conclusions there.
The only point I still have to make is this, that from our
Amendment it was not clear that we had no objections at all
against the last part of paragraph 2 (e) - that we have no
objections against those stipulations that say that restrictions
shall not be such as will reduce the total of imports relative to
production and so on.
Our Amendment simply referred to the first part of that
paragraph, and the sentence from"Any Member" and so on can remain,
as far as we are concerned.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. SHACKLE (United Kingdom): Mr. Chairman, I do not
want to say very much, but I would like to make a few brief
comments on some of the points made in the course of this
discussion. 42 E/PC/T/A/PV/19
In the first place we have had certain suggestions which
would widen the scope of this paragraph very much, so as to
make practically general protection for both agriculture and
also industry by means of quotas.
Well now, in our conception of the object of this paragraph,
that is not at all what it is desired to do. It is desired to
deal with a particular situation of difficulty which affects
agriculture and fisheries. That may be summed up in this sort of
way, that in agriculture and fisheries you have to deal with
the precious bounty of nature, which will sometimes give you a
huge catch of fish or a huge crop, which knocks the bottom out of
prices.
You also have the phenomenon peculiar to agriculture and
fisheries of a multitude of small unorganised producers that
cannot organise themselves. It often happens that the Government
has to step in to organise them. But if it does so, it cannot
allow the results of its organisation to be frustrated by un-
controlled. importers. That is, as we see it, the raison d'etre
of this paragraph.
Well now, certain other Delegations have suggested that this
should apply, if it be adopted, to industry as well as
agriculture. The answer to that, I think, is that industry is in
quite a different case. It does not suffer from the capricious
bounty of nature, Industrial producers are usually very well
able to look after themselves. There is no need for the Government
to step in and do it for them, and consequently there is no case
for controlling imports of industrial products in order to counter-
balance an international scheme. The case of industry is entirely
different from the ease of agriculture. G. 43
Well now, I would like to come to some points raised by the
Norwegian Delegate. He first of all suggested that what is
needed in the case of fish is not the kind of scheme we had in
mind but an international commodity agreement. As to that I would
say that we do not by any means rule out the idea of an international
commodity agreement about fish, but this paragraph, in our
conception, is designed to meet certain difficulties which are
just as much applicable to the case of fish as to agricultural
products.
The Norwegian Delegate seemed to think that we had it in
mind to extend this control not merely to cured and smoked fish
but also to things like tinned fish and sardines. That is not our
idea. All that we have in view is an extension to those earlier
stages of processing which result in a perishable product.
You cannot keep a kipper indefinitely.
E/PC/T/A/PV/19 V
44
Varieties that cannot be stocked - those are the things we
have in mind. If we could not control the importation of
kippers any scheme for herrings would break down. We
notice that the principle of the Norwegian amendment does,
to some extent, seem to recognize that you have to take care
of the processed product at the same time as you take care
of the raw product. I would suggest that what we have in
mind here is the peri-:hable kind of processed product, not
the kind which is capable of being stocked. Well now, as
regards that, I hope I have made it clear that we are not
asking for any amendment of this text. We are quite content
with it if it is interpreted in the sense that it seems to us
obviously to boar with the United States wording "in any
form" and the United States Delegate has agreed that that was
the intention.
I would like to mention just a few points made by the
Delegate of Australia. I would like to say that we view
this not as a means of protection but as a moans of making
watertight, and making possible the working of, necessary
forms of internal control. The text at the end of the
paragraph about the representative period, if it stood
entirely by itself, might - as Mr. McCarthy has suggested -
make for excessive rigidity; but you will notice that that
was qualified by the term "special factors".
The meaning of the term "special factors" brings me to
the second point of interpretation which I would like to put
forward. It is this: we assume that 3* reference to
"special factors" was not intended to allow a country that
operates a regulatory scheme of this Kind to adopt measures
that would be prohibited under ether sections of the Charter.
E/PC/T/A/PV/19 V. 45 E/PC/T/A/PV/19
We take it that the term "special factors" would include real
changes in relative productive efficiency as between domestic
producers and foreign producers, or as between different foreign
producers: in a word, real changes in the competitive situation
and not, as I have said, changes artificially introduced or
encour ged by Government action of a kind which other sections
of the Charter would not allow. If that interpretation is
right, it does seem to me to follow that we need not fear an
excessive rigidity coming out of this reference to the "repre-
sentative period" and the "special factors", because if the
representative period is not representative, and if there are
special factors which have modified the competitive situation,
then those factors have got to be taken into account; and although
it is for the Member concerned, in the first place, to select
the representative period and to size up the special factors,
that is provided for elsewhere and is subject to appeal, so I
think that this point is covered.
I would like to make one more remark concerning the inter-
pretation of "special factors": that is, that it arises not
only here but in two other passages in this Draft Charter -
in Article 27,paragraph 4, and also in the Article about
subsidies (Article 30, paragraph 5), so if this interpretation
which I have sought to give to the term "special factors" is
agreed, I think it would mean that it is agreed that the inter-
pretation has that general effect. 46
Mr. B.N. ADAKAR (India): Mr. Chairman, I am very sorry to
inflict my views again in this discussion, but I shall try to be
brief. The issuesinvolved in the amendment suggested by us in
London and New York, and those which we have supported in the course
of this discussion, are of vital importance to countries in a
position such as that of India. An objection of principle has been
raised to import regulations being used in connection with schemes
for stabilising the price of primary products. I think it is too
late in the day to argue about the desirability, or otherwise, of
promoting greater stability of primary prices. I think it should
be accepted that, both in the interest of primary producing countries
as well as in the interest of the stability of world economy, it is
necessary that the income of primary producers should be kept as free
from fluctuations as possible. Now, in view of that wider objective
we must consider whether, in the case of particular primary
commodities we are interested in, there are any international
schemes which seek to promote greater stability of primary prices.
If there are no such international schemes, I think that any
primary
government which is responsible to/producers must take local
measures to secure greater stability. Such local measures for
securing greater stability of prices will necessarily involve
supplies as well as imports. Control of prices is unthinkable
without control of import regulations, and for that reason import
regulations in connection with price regulations is justified. It
has been suggested. that such measures might be used to maintain world
prices.
Now, it is true that such measures could, in certain circumstances
be employed for that purpose, but as is widely known, the main
object of most such schemes is to promote greater stability, that is
to say, to eliminate fluctuations, and if such schemes are limited
to that objective they will not result in domestic prices being
E/PC/T/A/PV/19 ER
47 E/PC/T/A/PV/19
maintained on a world level. It is quite true that, if prices are
maintained on a world level, import regulations may be used for
protective purposes. I can understand if that is an arguemnt
against the deletion of the provision contained in this paragraph,
against maintaining a fixed rate in domestic products and imports,
but if that provision is retained I do not understand how the
maintenance of stable prices could be of a useful purpose. One
cannot argue against the deletion of production and import, and at
the same time argue that that may be used for particular purposes.
If a suitable ratio is maintained between domestic production and
imports, then naturally stabilisation schemes, ipso facto, have not
had the productive effect. Therefore, one can oppose the deletion
of the provisions which require fixed ratios being maintained between
production and imports. But having secured the retention of that
provision, one cannot use this argument against schemes which aim
only at stabilising domestic prices. So far as the provision
dealing with the maintenance of fixed ratio between production and
imports is concerned, I would say that the Indian delegation would
be quite prepared to accept the same procedure for protective import
quotas and for agricultural products as for manufactured products.
We have proposed an amendment providing import quotas for
manufactured products. We would be quite content to follow the
same procedure for agricultural products agic .r, _% n:f z.t'
products.
Dr. A.P. van der POST (South Africa): Mr. Chairman, as a
representative of an agricultural country, I would join issue with
my friends of Chile and Canada in their conclusions that, if we
extend certain privileges to any country proposed, those privileges
must necessarily be extended ultimately to industry, and would
support Mr. Shackle in his remarks on this point. I believe that ER
48 E/PC/T/A/PV/19
we do not want to open the door too wide, and we have got to make
exceptions - that is, while we can confine our exceptions in this
particular case to agriculture, there is a very big difference as
emphasised by Mr. Shackel and the Indian representative, between
agriculture and industry. By its very nature, industry is dependent
on natural forces. Industry can rationalise, but we cannot do that
to the same extent in agriculture. Agriculture still depends on
natural forces. It may be that, if we attempt to rationalise in
agriculture in the same manner as we rationalise in industry,
a whim of nature may upset our whole rationalisation scheme.
Therefore, we have got to make an exception in the case of
agriculture, and I therefore protests as we cannot argue that if we
extend these privileges to agriculture, and it follows naturally
that they must also be extended to industry. Therefore, it seems
to me that the arguemnt used by our Chilean representative and by
the Canadian representative, that with these further proposed
privileges for agriculture we would be upsetting the balance of the
Charter and that this should be more related, ultimately does not
hold much water. It ignores the very fundamental nature between
agriculture and industry.
CHAIRMAN (Interpretation): We will resume our discussion
next Monday.
The meeting is adjourned.
(The Meeting rose at 6.25 p.m.) |
GATT Library | zk814jh7770 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Ninth Meeting of Commission A held on Thursday, 5 June 1947 at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, June 5, 1947 | United Nations. Economic and Social Council | 05/06/1947 | official documents | E/PC/T/A/PV/9 and E/PC/T/A/PV.8-11 | https://exhibits.stanford.edu/gatt/catalog/zk814jh7770 | zk814jh7770_90240083.xml | GATT_155 | 14,367 | 86,046 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL RESTRICTED
ECONOMIQUE E/PC/T/A/PV/9
ET SOCIAL 5 June 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
NINTH MEETING OF COMMISSION A
HELD ON THURSDAY, 5 JUNE 1947 AT 2.30 P.M. IN THE
(Chairman)
( Norway )
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247).
DES NATIONS, GENEVA
NATIONS UNIES
H.E. MR. ERIK COLBAN G E/PC/T/A/PV/9
CHAIRMAN: The Meeting, is open.
I think we may start, even if some Delegates have not yet
arrived.
Do you remember that the Article we are going to discuss
to-day, article 15 of the Draft Charter, was not drafted at the
London Session, and. the Drafting Committee, on the basis of the
discussion in Commission 2 in London, has tried to set up a
text which is inserted in the New York paper. Obviously this
places this Article in a slightly different position from the
Articles which were drafted at London, and that perhaps is the reason
for the very great number of Amendments we are going to go through.
Nevertheless, I hope we shall be able to boil down the
differences so that it can be put to the Sub-Committee to dispose
of.
You will see in the New York paper, under the heading "General
Comments", that one Delegate, the Delegate of Brazil, proposed
adding a new paragraph. I would like to ask the Delegate of Brazil
whether he wants to speak on this suggestion?
Mr. RODRIGUES (Brazil): Mr. Chairman, we have received
instructions from Brazil to withdraw this reservation.
CHAIRMAN; Thank you. I hope we can go on with the same
result for others.
The second point, in the General Comments in New York, was
made by the Delegate on Cuba, but I think that when he said nothing
he meant to reserve his position. That is now covered by his
definite proposal for certain Amendments.
Mr. GARCIA-GLDINI (Chile) (Interpretation): May I suggest,
Mr. Chairman, that we defer your lest question until the
Representative of Cuba has arrived? G. 3 E/PC/T/A/PV/9
CHAIRMAN: I regret I did not notice that the Delegate of
Cuba was not present.
We pass on then to paragraph 1. There you will see, in
Doc. W/150, that the Delegations of the United States, Cuba and
Norway propose the deletion of the first paragraph of the New York
Article 15.
The Delegate of China proposed a certain Amendment to this
paragraph, but if the paragraph should be omitted altogether, that
amendment would, of Course, disappear, and I do not think we need
to deal with that Amendment in the first instance, whether or
not we decide that the U.S. proposal is accepted,
Mr. SHACKLE (United Kingdom): Can I ask a question, Sir?
I assume that the U.S. proposal is dependent on the addition
they suggest at the end of what is now paragraph 2. Is that so?
CHAIRMAN: It is my own opinion, but I wanted to ask the
U.S. Delegate to answer the question.
Mr. Oscar RYDER (United States): Mr. Chairman, I do not
know whether I would say "dependent" but "closely connected", as
regards the two Amendments; and in the original proposal which we
considered at the London Meeting, in paragraph 2 it was provided
that Members recognise that the imposition of internal taxes on
the products of other countries for the purpose of affording
protection for the domestic production of competitive products
would be contrary to the spirit of this article, and they agreed
to take such measures as may be open to them to adopt a new or
higher tax of this kind within their territory.
Now, at the New York Meeting of the Drafting Committee, that
provision was dropped out, and apparently the first paragraph of
the present Draft was inserted. Now that paragraph is binding on
no one, it expressed an auditory principle, and I see no useful G- -4- 2E/PC/ALP/'V/9
purpose that it seervs, to retain it in the present Draft of
irciole 15.
Nnw the problem which Article 2 of the old preceding Draft
was intended to cover is covered by the Amemdtent which the U.S.
Delegation erc ofifergin to paragraph 2, which, if thi -paragraph 1
comes out, will become paragraph 1; and that reads: "Moreover,
in cases in which there is no substantial domestic production
of like products of national origin, no merber shall impose new
or higher internal taxes on the products of otheM eeembcountriesl
for the purpose of affording protection to the production of
competitive products."
That makes the meanngE uchoel.erorc hbn4it was in the
original United states proposal. V -5- E/PC/T/A/PV/9
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, after the
explanation which the United States Delegate has just given, I
say that I support his amendment: that is to say, the present
paragraph shall be deleted on the understanding that it is
replaced by the sentence which he proposes to add at the end of
what is now paragraph 2.
CHAIRMAN: The Dele legat: of aurhy.-
L. M. ANDELI}E (Norway): Mr. Chairman, our proposal for
the deletion of paragraph 1 ns Lot dependent upon the inclusion
of the last sentence of paragraph 2 which is included in the new
American prspo al-in fact, we would not be able to accept the
new proposal to paragraph 2 suggested by the United States. We
maintain our proposal that paragraph 1 should go out, and then
when we come to paragraph 2, which would then be new paragraph 1
we could t kp'u; the other problems.
CHMARY&N: eTre Dsleeaoo vf China.
Mr. K.SA M (China): Mr.aCrman,i:w vhat the Nerwaniuu
Delegateshsa Qzid in rrgaid toragaap-r1h i reseazsntz ouiew:Bws too.
CKLANMJX:A e r; thern a"y otherm rksrLr? eTht Dgaee:tc of
gBelium.
M. MOSTIN (Biumjb()nterpretationb:oi) Mr . Chairman, the
gBeliaen Dlegation ask ior the maintnance of paragraph 1.
CHAAIRMN: e Th Delte aoga f Chile.
M. F. GARCIA OLDINI (Chile) (Interpretation): M. Chairman,
may we ashek t wNgoreian Delegate to indicate why he suggests the - 6 -
E/PC/T/A/PV/9
deletion of paragraph 1 without favouring any addition to paragraph
2? e W would like to know the reasons for ihts suggestion.
CHAIRMAN: The Delegate of Norway.
ILJ T. LAUiNDER (Nwrvay): Mr. ah,mani:, the reasonsia that,
in ouv riew, pagraruphnis thexeszingL. dfact would be, practically
6peang.t, eqla1 to thexe.isting paragraph 2 and the first sentence
of paragraph 3. In other words, pararap2 L and the first sentence
of para raph 3 are, in our view, the complete application of the
principle laid down in paragraph 1. We eecl, however, that
paragraph 1 is not as clear. as it should be. Consequeltiy, we
suggest that it be delated.O n. the other hand, of cour, - we
maintain that the present paragraph 2 and the first sentence of
paragraph 3 be maintained.
CHAIAN:: The le2pgetc of Cabc.
M. G. GUTTREIREZ (Cuba): Mr. Chairman, enGL tsi;aragrap h 1
of Article 15 was discussed, the CubaneDulegation resvered its
position. Now we have presented an amendment for the deletion of
paragraph 1. We are very sorry to state that we are absolutely
unable to accept the text of the New York draft, because it
clearly says something that in our opinion no country can fulfil.
It says: "The Members ageec that neither internal taxes nor other
internal charges nor internal laws, regulations or requirements
should be udec to fafdrCidec6lt y-or indirectly for any national
product". We mu t-steta very clearly that our country is
having la s-enacdea every day and is continually enacting lawsot3
protect its national inrezestq, because there is no other way for
thenirdustrialisation of the country. If we accept that wording,
we would be acting agasn4anrx capceted law and weacrnnot accept that.
V E/PC/T/A/PV/9
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I would
say this: that I would agree,I think, that paragraph 1 of this
Article, as it is drawn, is too widely worded. At the same time,
I think there is quite a definite case for the addition which the
United States suggests to make to the end of the present paragraph
2. I might illustrate by an example. Let us suppose that some
country in its negotiations has secured the binding of the duty
on oranges. Country A gots a duty on the binding of oranges from
Country B. Now, Country B after that can proceed to put on an
internal duty of any height at all on oranges, seeing that it
grows no oranges itself. But by putting on that very high duty on
oranges, it protects the apples which it grows itself. The
consequence is that the binding duty which Country A has secured
from Country B on ito oranges is made of no affect, because n ix.
±otthpe eerca oranges f s pushed d):wsp zoghih by tshinze natra
duty that none o nca buy ethm. The Consequence is that the
jocbet of that binding is defeated. Ist esem tmeul ahlt that is
a point ahet sag eot to beat>ken cert ofancad I think that eho
United States amendment is well-ccnoeived to take care of it.
CHRAIMAN: ehQeDogebetc of Belgium.
.
_ 7 - - 8 - E/PC/T/A/PV/9
M. PIERRE FORTHOMME (Belgium) (Interpretation): I believe
that, if it is true that the Cuban delegate has made a point, it
would be excessive to draw the conclusion from that point that we
should proceed, with the suppression of paragraph 1. It is
perfectly true that a certain number of laws or international
regulations are meant to be in favour of the industrialisation of
the country, and therefore they have, in some respects, their
influence on imports in this country. However, a great number of
laws are directly and specifically meant for the protection and
therefore I should think that even taking into account the
observations male by the honourable representative of Cuba, the
suppression of paragraph 1 would not serve the purpose and to
restrict only the meaning of Article 15 to duties and taxes would
be to limit it to too great an extent.
M. GARCIA OLDINI (Chile) (Interpretation): I think that two
arguments have been brought forward in favour of the suppression of
paragraph 1. However, we could deal with this question before we
continue with the study of paragraph 2 as it stands. Therefore,
I would like, Mr. Chairman, to ask to divide the discussion into
two, just to restrain ourselves.
CHAIRMAN: I was Just going to make a suggestion on the same
lines, with a slightly different result. Some delegates would be
willing to agree to the suppression of paragraph 1 on the condition
of the American addition to paragraph 2 being accepted. So I think
in order to clear the discussion we will deal first with the
American proposal with regard to paragraph 2, and in the light of the
result of that discussion we could then decide whether we should
maintain or not maintain paragraph 1. - 9 -
E/PC/T/A/PV/9
Mr. K.S. MA (China): Mr. Chairman, I want to support the
views of the Chair, just expressed.
CHAIRMAN: If there is no objection, we shall then deal with
the American proposal of addition to paragraph 2. The text has
already been read to you by the American delegate, and I would like
to hear the opinion of other delegates.
Mr. J.J. DEUTSCH (Canada): Mr. Chairman, I would like to
support the Aerican amendment to paragraph 2.
M. GARCIA OLDINI (Chile) (Interpretation): However
attentively I have been listening to what has been said up to now,
I have not got the impression that enough arguments have been put
in favour of considering the addition of this new text, without
taking it into relation with paragraph 1.
CHAIRMAN: Obviously, when we discuss whether we shall accept
the American addition to paragraph 2, we will know that after having
done that, we shall go back to paragraph 1. We have the two
paragraphs in mind, but we look upon the two paragraphs from the
point of view of the American amendment to paragraph 2.
Mr. J. MELANDER (Norway): In addition to what I said a few
minutes ago, I would like to come back to the American proposal.
The case mentioned by the United Kingdom delegate is a point which
I think we have to meet in one way or another, but his point was
really one where you have an extreme case of a country, having
agreed to tariff reductions, introducing internal taxes in order to
defeat the purpose of the agreement on tariffs already concluded.
That is a very extreme case and a case which I think is very ER
- 10 - E/PC/T/A/PV/9
unlikely to happen in the form he mentioned. That is the reason
why I do not think we should accept the American proposal in its
present form. The main reason is, to my mind, that we are laying
down in Article 15 the principle of national treatment, in other
words that goods of foreign origin shall be treated on the same
lines as goods of national origin. That is the principle and to
introduce any amendments to that principle, which would so to say
lead to foreign products being treated in a different way, would
to my mind go much too far. However, as. I said, I think that we
could perhaps try to find ways and means to meet extreme oases like
the one the United Kingdom delegate had in mind. But I think that
in principle we should stick the rule as it stands in the present
paragraph of Article 15, and try to solve that other extreme case
in a different way. S - 11 - E/PC/T/A/PV/9
CHAIRMAN: The Delegate of China.
Mr. K.S.MA (China): Mr. Chairman, on this question of
national treatment, our new Treaty of Commerce with the United
States, to which we attach great importance and which we regard
as a concrete expression of the cordial relationship that has
existed all along between the two countries, expressly states
that national treatment is confined to taxation only.
This is as far as we can go. Any provision or any
amendment that would extend the application of national treat-
ment beyond taxation would place a serious restraint upon the
government concerned to make the necessary improvisations to
meet the needs of the constantly changing conditions inherent
in the initial stages of industrialization.
The extension of national treatment beyond the purview
of taxation would jeopardise the position of an undar-developed
country in its industrialization, which requires, from time to
time, readjustments to new conditions. It will stifle its
growth and is, therefore, contrary to the aims of the chapters
on Economic Development in the Charter. Expansion of inter-
national trade and economic development of Member countries
must go hand in glove. An impoverished China will benefit
no country, evan though international trade be free of all
restrictions and tariffs. For that reason, we are unable
to accept the United States amendment, particularly in regard
to the second part of the paragraph from "Moreover" onwards.
We propose the deletion of that part. We can accept the first
sentence in this paragraph.
CHAIRMAN: The Delegate of Belgium.
M. Pierre FORTHOMME (Belgium) (Interpretation): Mr.
Chairman, we would agree with the United States amendment with one S -12- E/PC/T/A/PV/9
slight amendment - a sub-amendment, if I say say so - because
we are not agreed upon the introduction of the words "impose
new or higher internal taxes on the products of other Member
countries. . ." I think it will be quite sufficient if we
leave the sentence as follows: "Moreover, in cases in which
there is no substantial domestic production of like products
of national origin, no Member shall impose new or higher
internal taxes on the products of other Member countries for
the purpose of affording protection to the production of
competitive products." This seems to meet the point which
has been made by the United States Delegation.
CHAIRMAN: Before calling upon the next speaker, I
would like to ask the United States Delegate what he thinks
of the suggestion just made by the Delegate for Belgium.
Mr. Oscar RYDER (United States): Mr. Chairman, first
I would like to make a few remarks about the statement of
the Delegate for China.
The United States amendment to this particular Article
does not deal with anything other than taxes. It recognizes
that national treatment may, in fact, be violated when an
importing country places a tax on a product which it produces
in negligible quantity, if at all, and does not Place that
tax on a highly competitive domestic product. P.
E/PC/T/A/PV/9
- ~~~~~~- 13 -....
Mr. OSCAR B. RYDER (United States): Mr. Chairman, first I
would like to male a few remarks about the statement of the dele-
gate from China.. This United States amendment to this particular
Article does not deal with anything other than taxes. It recog-
nises that an international agreement may in fact be violated when
an importing country places a tax on a product which it produces
ininegligible q antity If at all and. does not place that tax upon
a highly competitive domestic prcduct, and it was to oover that
situation that this amendment was introduced.
Now,os to the suggestion af the delegaae from Belgium, it wts
the purpose of. the .American Delegation in introducing this amend-
ment te ensure that there b no new or increased internal taxes
imposed in the situation I haee just outlined. Wc did not think
it was advisable to try fo force the repeal oA all the existing
measures of this kind which, as we understand it, are relatively
few. In our opinion such taxes should be treated in the same way
as protected duties.
M. E.C.RODRIGUES (Brazil): Mr. Chairman, I. support the second
part of the United States amendment, but I doubt if I should speak i
now about the first part which is the same as the New York draft,
because I see the wordc ldirectly or indirebtiy" before "on like
products of national origin," If this is the proper time I should
like to expres. my'views about that,
CHLXkIR): I hould like to finish'the discussion on the
Amerinan amendment first.
M.P. GARCIA OLDINI (Chile) (Mnterpretmai,n): Nr. Chairifnj
as you have pointed out very properly yourself, I think that in the
discussion hich we have started on paragraphs 1 and. 2 of Article
15, we should take ascese basis of our disoresion the draft which
has been prepared by the Ncw York drafting committee. P. -14- E/PC/T/A/PV/ 9
As far as I am concerned I do not see any relation of substance
between paragraph 1 as it now stands in Article 15 and the amend-
ment submitted by the United States delegation. Paragraph 1, in
fact, establishes a basic principle and says that excessive pro-
tection must be avoided in certain given circumstances . The United
States amendment, as I see it, refers to an entirely different
matter, and, as the issue is not quite clear, the wording of the
amendment is obviously fairly involved.
Let us read it together to see the points of obscurity which I
personally find in this amendment. In addition to the problem of
directly or indirectly" to which the delegate from Brezil has already
referred, there are several other points which are open to inter-
pretation and to discussion. Thus, for instance, in the first
line, the amendment refers to" cases in which there is no substantial
domestic production." What is the actual meaning of the word
"substantial"? Obviously such an expression, vague as it is, calls
for varying interpretations. Then, again, in the following lined
you find the words "production of like products." The discussions
which have taken place at this Conference and at previous meetings
of the Trade and Employment Conference have shown that the definition
of the word "like" in connection with production is far from being
an easy matter. Finally, at the end of the amendment it says "the
purpose of affording protection to the production of competitive
products." As obviously in the matter which we are discussing the
problem will not be of comparing identical products but to find out
Whether some product of a different nature may be considered as
competitive, there again it will be necessary to indulge in detailed
definitions, and, maybe, complicated issues. . P. - 15 - E/PC/T/A/PV/9
The very fact that in this amendment, as I have attempted to
point out very briefly there are so many loopholes, and so many
terms which require proper definition, would, I should state, be a
sufficient reason for not accepting this amendment. There-
fore, I wish to state that the amendment as it is now drafted goes
beyond the scope of the problem which is laid down in paragraph 1
of Article 15. There are very few States, I believe, which would
be willing to accept a classe by which a foreign umpire would have
the power to decide whether an internal tax imposed by the State is
or is not acceptable for the reasons claimed by such State. J.
- 16 -
CHAIRMAN: The delegate of France.
M. A. KOJEVE (France) (Interpretation): Mr. Chairman, as
much as the French delegation has been sorry not to see eye to eye
always with the delegate of Chile, I am this time partioularly
happy to say that I agree entirely with what has been so clearly
and aptly put by the delegate of Chile.
CHAIRMAN: The delegate of India.
MR. S. RANGANATHAN (India): Mr. Chairman, our delegation
also finds itself completely in agreement with the point of view
expressed by Chile.
Even if we were to accept the general principle underlying
this American amendment, in practice we anticipate considerable
difficulties for the very same reasons which Chile has pointed out
there will be disputes about substantial production.
The position is also complicated in India by the fact that,
for example, our Provinces have the power to levy sales tax, and
every time any Province introduces sales tax on some commodity,
it will be open to dispute whether the intention underlying that
levy is for a protective purpose or not, and also whether it does
infringe on this concept of a competitive product or not. It
was mainly with that object in view - that is, because of the
distribution of tax in India - that a reservation has already been
made, even for the first portion of paragraph 2.
So, even if we were to accept the principle underlying this
amendment and welcome it, because it restricts the use of this
Article by removing from it matters other than taxes, we feel it
will in practice give rise to considerable difficulties. Also,
it may be unwise to put in a provision which is morn likely to
E/PC/T/A/PV/9 E/PC/T/A/PV/9
lead to disputes than to the settlement of disputes - more likely
than paragraph 2 without such provisions.
CHAIRMAN: The delegate of Belgium.
Mr. P. FORTHOMME (Belgium) (Interpretation): I have listened
with a great deal of attention to the very lucid explanation given
by the delegate of Chile.
However, I would. like to put one question. Does the delegate
of Chile mean that it would be good to find, perhaps, another draft
in order to do away with the difficultics which he envisaged, or
does he want to let drop entirely the principle involved in
paragraph 2 as it stands?
Mr. F. GARCIA-OLDINI (Chile) (Interpretation): Mr. Chairman,
I ha.ve already stated at the beginning of my last remarks that,
as I eec it, tec whole of teQ United Sa-tes Amendment is outside of
the cooec of the Charter, and more particularly of prXgraaph 1 of
aticle 15.
I have already also stated that I did not believe that any
government would accept a clause which is open to such wide
interpretation. Consequantly, the only solution that I would
consider, as I suggested, is to drop this entirely.
CHAIRMAN: The delegate of the United States.
MR. O.B. RYDER (United States): Mr. Chairman, the delegate
for Brazil complains that the words "directly or indirectly" have
the same meaning as the amendment offered by the american delegation.
I do not think that that is correct, because the phraseology is
Charges of any kind higher than those imposed, directly or
indirectly, on like products of national origin", and the American
amendments desires to take care of products that are not "like".
J.
- 17 - E/PC/T/A/PV/9
Mr. RYDER (United states). Now I would like also to make
a few remarks on the very interesting statement of the Delegate
from Chile. I think we will all have to agree that in this
Charter we have to use words which are difficult to find; and
I cannot see that "like" as used in the sentence we propose to
insert is more difficult to interpret than "like" in the
preceding sentence, and I cannot see, from my own experience
in dealing with questions of similarity and competition, that
it is any more difficult to define products that are competitive
than it is to define what products are like.
CHAIRMAN: The Delegate of Brazil.
Mr. RODRIGUES (Brazil): Mr. Chairman, I have nothing to
say against it, the second part of paragraph 2 as it stands in
Document TW/150. I think the second part is the only Amendment
of the American Delegation: but as the American Delegation had
put in the same Amendment - the first part of paragraph 2 - it is
the same Draft as the New York Draft, and as I do not agree with
the expression "directly or indirectly" included in this first
paragraph in the fifth line of the New York text, I should like
to explain my views. Everybody knows in taxation there exists a
very clear division between direct and indirect tax.
In spite of being criticised, it is generally certain, and
if those two words "directly or indirectly" remain in the first
part of this paragraph, later on the Organisation and every person
who has to deal with this matter will have trouble, because we
areconcerned with all these products, and the indirect tax
cannot be imposed upon products. I should like to ask a question
of the representative of the United States.
The United States corporation income tax which is imposed with
some discrimination upon foreign countries - would it be prohibited
- 18 -
G. G
- 19 -
E/PC/T/A/PV/9
in the light of this Draft in tht New York text? It is a direct
tax - it is not on a product, because I do not know of any direct
tax upon products; but there is no doubt that the tax, the
corporation tax, is not a personal tax. But a real tax should be
regarded as a discriminatory tax upon products, and you have the
same thing in Brazil, and all the countries we represent have the
same situation.
If the representative of the United States can explain any
other meaning of these words, I perhaps can change my idea about
them.
CHAIRMAN: The Delegate of the United States.
Mr. RYDER (United State): Mr. Chairman, the question that
the Brazilian Delegate raises is a technical question, and one
that probably should be dealt with in Sub-Committee. There are
examples which I gave, of a tax, not a tax on a product as such Ac /
but on the processing of the product, which are covered by the
wor 2n r2e
It might be better, however, to delete the words "directly
or indirectly" in the fourth line, and insert them in the second
line, before internal taxes, so as to read "exempt from direct or
indirect internal taxes". However, as I said, this matter we
are discussing at this moment is a technical one.
CIIR,'& The Delegate of South Africa.
MSr. ELLOWaY(soth Africa): MirCha.iman, I had not intended
to sApeak about rticle 1, or the rredraeft of Aticl 2 which now
takes its place, because it seemed to me such an obviously necessary
counterpart of what we are doing in the tariff negotiations that
I was a little bit surprised at any discussion except on the wording;
but it seems to be necessary just to make this point. G - 20 - E/PC/T/A/PV/9
There does not seem to me to be any purpose served at all,
but if any Delegation should give and exchange benefits for the
purpose of getting a rate of duty for the introduction of its
goods into another country, that country is immediately free to
put on an internal tax to stop the concession it has given. That
seems to me to be perfectly obvious.
When the Delegate for Chile says that this Article 1 is
in conflict with the purposes of the Charter, I Just do not know
where I am, because if that is the case the value of all the
concessions we are getting must be discounted very severely -
because one never knows what sort of internal taxes may be
imposed by a country to take away the benefits they have given
you. - 21- E/PC/T/A/PV/9
CHAIRMAN: The Delegate of Chile.
M. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairman,
I want to clear up one point. I never said that paragraph 1
was in confliet with the spirit of the Charter. I said, on the
contrary, that paragraph 1 conformed to the spirit of the Charter.
What is against the spirit of the Charter it the United States
amendment, because it conflicts with the spirit of paragraph 1.
CHAIRMAN: Now, eleven Delegates have spoken on the question
and opinions seem: to be divided. I would, like to make the
following suggestion, that the ad hoe sub-Committee be asked to
see whether some re-draft of paragraph 2 of Article 15 is possible,
so as to meet such points as the one presented to us by the Delegate
of the United Kingdom and so as to clear away the objections of
the Delegate of Chile; and also to see whether, in the light of
the draft they arrive at, it would be right to omit paragraph 1
and make the New York paragraph .2, No.1.
Are there any observations on this suggestion? ...Then that
is agreed. We pass on to the next item in Document W/150.
The Chilean Delegation proposes an addition to paragraph 2. It
proposes to add: "The provisions of this paragraph shall not
imply exemption from internal taxex imposed on imported products
to bring them into line with the taxes imposed on national
products". Before asking the Chilean Delegate to kindly
explain further, I would like to say that my immediate reaction
when I read that proposal was that what it says here should be
obvious from the text already before us, but there may be some
meaning which I did not catch.
The Delegate of Chile.
M. F. GARCIA OLDINI (Chile) (Interpretation): Mr. Chairmen,
I do not understand your doubts as to the amendment suggested by
the Chilean Delegation. ..
CHAIRMAN: (Interpretation): Only this, that I find your
amendment so obvious a conclusion drawn from the New York text,
ahra kingsm-se-it iyspladimiI hdertroon-your point.nu o ER
-22 - E/PC/T/A/PV/9
M. GARCIA OLDINI (Chile) (Interpretation): As many other
delegates, the Chilean delegation have had some doubts in respect
to this Article as well as to other Articles, as to whether certain
essential problems and certain aspects of the question which are
essential for our national economy were actually applied in the
draft of the Articles. The situation to which our amendments
refer is more or less the following. After the depression in 1929/
1939 the Chilean government, for obvious reasons, had to introduce
a tax which corresponds more or less to a turnover tax. Such a
tax was not very popular and in view of the adverse reaction of the
consumers, we had to change our system and, to establish, in lieu of
this turnover tax,a tax at the basis, in other words a direct tax
which was represented by the turnover tax which had to be changed
into an indirect taxation. We consequently are faced, in our
country, with two separate systems, one dealing with direct
taxation and the other with the indirect taxation. We are anxious
that taxes so imposed nationally could be balanced by equivalent
taxes which we want to impose on imported products. This is an
explanation of the amendment which we have submitted, reading "The
provisions of this paragraph shall not imply exemption from
internal taxes imposed on imported products so as to bring them
into line with the taxes imposed on national products.
If this statement is implied in the present draft of Article
15 paragraph 2; and if such facts can be officiallyy acknowledged
either in the footnotes to the Charter or in some other official
document of the Conference, we will then be satisfied. If this
was not clearly stated, we would have to insist on our point of
view and develop it at greater length. - 23 -
E/PC/T/A/PV/9
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, if I
understandthe point raised here is really a question of whether
tax on imported goods is charged. In the case of a home product
it naturally is charged within the country - that is obvious. In
the case of an imported product it may be much more convenient to
charge it at the point at which the goods come through the customs.
That is a very common practice indeed, I believe. I certainly
see nothing in the Article which would rule that out at all. I
expect most countries would want to be sure that it is permissible.
I imagine that it is permissible already.
I would like to add just one thing more. If you look at
Article VIIl on Schedules of Concessions on Particular Products, on
page 69 of the New York text, you will see two footnotes. The
first one of those notes deals with the following point. The last
part of the note says: "Such products shall also be exempt from
all other duties or charges imposed on or in connection with
importation, in excess of those imposed on the day of the signature
of this Agreement or required to be imposed
/thereafter, under laws (name of the country) in force on that day
provided that this sentence shall not prevent the government of
(name of country) from imposing at any time on the importation of
any product a charge equivalent to an internal tax imposed in
respect of the like domestic product or in respect of an article from
which the imported product has been manufactured or produced in
whole or in. part." But it is suggested in that footnote that the
words on those lines should not appear in the text of the tariff
schedule. So it seems that,at any rate,the purposes of a general
agreement on tariffs and trade and the schedule of the Drafting
Committee was contemplated in New York. E/PC/T/A/PV/9
M. GARCIA OLDINI (Chile) (Interpretation); Just one point,
Mr. Chairman. It would be understood that the drafting of
paragraph 2 of Article 15 as it now stands, would not conflict with
the spirit of the amendment which the Chilean delegation has
submitted, and that the footnote which has been read by the delegate
for the United Kingdom would also apply in its spirit and definition
to the Charter itself.
CHAIRMAN: Unless there is any objection to this, I will take
that we agree to that interpretation.
We now pass on to paragraph 3 of Article 15. There we have,
in the New York document, a number of reservations. I have gone
through them, and I find that practically all of them have been made
subject of new amendments submitted to our Commission and
incorporated in W/150. I should think it will be the most
practicable way of considering paragraph 3 in dividing it. On
the first sentence, we have an amendment by the South African
delegate. He proposes the deletion of the word "transportation",
in the seventh line of the New York draft.
. - 24 - -25-
S E/PC/T/A/PV/9
Dr. J.E.Helloway (South Africa): There was a long
discussion in Commission B on a counterpart of the same subject
as is dealt with by the South African amendment to this
paragraph. The question was dealt with in Commission B,
whether transportation, telecommunications, insurance, banking
and certain other services should be dealt with in the chapter
on restrictive business practices.
The Commission gave a considerable amount of time to it
and ultimately came to a conclusion, which will come before the
Preparatory Committee at a later date, which is contained in
Document W.144.
In effect, the trend of their discussion was that, whilst
there are many serious problems affecting international trade
in transportation and these other services, it was the feeling
of that Commission that the laying-down of rules in detail to
deal with those matters would probably go beyond the competence
of this Conference and would in any case be undesirable to do.
The Cormmission therefore has recommended to the Preparatory
Committee another method of dealing with this matter and that
will come up later.
I could at some length explain what difficulties would be
encountered if we simply put this one word ''trans.:. ..j
the text and left it at that, It would be a fulmination against
this particular type of sin but there would be no further
discussion of what the sin was and in what circumstances it
had to be avoided. That is what Commission B round, too.
I do not propose to take up the time of this Commission
by going into details and saying how difficult it would be for
this Conference to draft the rules that would be a necessary
adjunct to having transportation in this article, unless of course - 26 - E/PC/T/A/PV/9
there is a great deal of pressure to keep the word. In that
case, I would have to press the matter further.
I suggest, Mr. Chairman, that if you cannot deal with
the type of transportation which goes between the border of
one country and the border of another country in the Chapter
on restrictive business practices, it is as difficult to deal
with the portion of transportation which takes place inside
the country. After all, the transportation which enters
into international trade is not the bit which starts at a
border and ends at a border; the goods come from some point
inside a country and go to some point inside another country,
and therefore that transportation is one whole subject, Tnere
is no difference between inland transportation and oceanic
transportation from that point of view.
I would therefore suggest, Mr. Chairman, that the word
"transportation" should be deleted from this paragraph and
that when we come to it in the Preparatory Committee we might
deal with the whole subject of transportation on the basis of
the Report from Commission B. It, however, that is not
acceptable to this Commission, I fear I shell have to go at
some length into the question why internal transportation is
not a suitable subject for treatment by this Conference. 27
Mr. PIERRE FORTHOMME (Belgium) (Interpretation): The
Belgian delegation is opposed to the deletion of the word "trans-
portation" in paragraph 3 of Article 15. The argument drawn by
the representative of theUnion of South Africa from the comparison
between the decisions x suggestions which Commission B made con-
cerning Chapter VI and the clauses in the Article which we are now
discussing seems to be somewhat broad, and in any ease I wish to
remind you that when Shapter VI was being discussed the Belgiam
delegation always favoured the inclusion of "transportation" in the
clauses of that Chapter. We should never forget that what we are
dealing with now are protective measures and it seems obvious that
the reason for manipulating rules for freight for transportation
of goods is that they may become a protective measure as many others
are. We all know from experience that it may well happen that an
imported product which comes from a point 15 miles perhaps beyond
the national boundary may actually be the object of a protective
measure, if the rate imposed for such a short distance which this
article has to be transported inside the national territory is
higher than that for a national product of the same character
travelling hundreds of miles inside the national territory.
Mr. B. RODRIQUES (Brazil): Mr. Chairman, because we fully
agree with the delegate for Belegum. we also think we must maintain
the word "transportation".
CHAIRMAN: any further remarks?
Mr. STANISLAV MINOVSKY: Mr. Chairman, I only wish to mention
the fact that the representative of the Union of Smith Africa has
mentioned the long discussion which has taken place on this problem
and I would like to remind you that the Commission finally decided that
the problem of services should be included in the Charter; a majority
E/PC/T/A/PV/9
P. 28
decision was taken on this fact, consequently we are faced with
that decision of our predecessors.
Mr. M.P. PAI (Indis).The Indian delegation, Mr. Chairman, finds
that the words "like products" in the sentence which we are dis-
cussing is likely to lead to dispute in the actual working of the
Article and for that reason we feel that the balance of advantage
would lie in accepting the proposal of the South African delegation
that the word "transportation" would be deleted from this sentence.
Mr. R.J. :. :CKLE (United Kingdom): Mr. Chairman, I would
like to say this: that if it is a question of deleting the word
"transportation" purely because of this apparent ambiguity of the
phrase "like products", surely that argument goes very much further
indeed; if that argument is a valid argument it would mean that the
whole of this paragraph ought to disappear altogether. So far as
the interpretation of like products" is concerned, my impression
is that, in practice, that is a term which has been in Treaties for
a very long time and it has not given rise, so far as I know, to any
particular difficulties of interpretation - I think for this reason:
that "like products" is related to the tariff classification of the
country co ncerned . The products which fall within a certain head-
ing of the tariff classification and are therefore subject to a
particular rate of duty are all treated as "like" and therefore when
comparing domestic products with imported products it is just a
question of what section of tariff classification the particular
products would f all in if imported. That is a question which
comes up every day, I take it, in the normal routine of Customs
operations, to decide under what headings of classification a pro-
duct falls, and that determines what are "'like products." So I don't
think there is any serious ambiguity in the term "like products",
and therefore no reason for contemplating the deletion of this
E/PC/T/A/PV/9
P. 29
paragraph which I think would be the logical outcome if we were to
decide that "like products" was too difficult to interpret.
Dr. G. GUTIERREZ (Cuba): The Cuban delegation really does
not desire to go back again through this question of the rôle of
transportation and other services in international trade because
we were happy in the sub-committee to reconcile the different points
or view so as to draft a new text which gives satisfaction to the
principle that these services are an important part of international
trade and also to the contrary idea that nevertheless they cannot
be dealt with in derail in this Charter, but transferred to the
speoialised International Agencies, in the cases where those
Agencies exist, or taken eare of by the Organisation if there is
no such specialized agency. But here "transportation" comes, in
our opinion, in a different sense. This is an Article which is
trying to avoid a discrimination on products coming into a country
by means of taxes or any sort of laws, regulations or requirements
affecting their internal sale, offering for sale, distribution or
use of any kind, and there is no doubt that transportation is a
way to bring those products in. So the Cuban delegation wonders
if it would not be wise to leave in suspension, as we say, "on
the table", the word "transportation" until we dispose of that
special article that was put before the ad hoc sub-committee of
Commission B. and then decide. Because if we decide on the first
problem, then this will be easily understood E/PC/T/A/PV/9
CHAIRMAN: The delegate of India.
Mr, M.P. PAI (India): Mr. Chirman, I would like to clarify
the point which I tried to make earlier. It is not our view that
transportation should be used for the purpose of protection at all.
The point is that in India, and perhaps in some other countries as
well, rating policy is based to some extent on the intrinsio value
of goods moved, and for that reason rates may be different in the
case of goods which are more or less similar but not exactly the
same. It is for that reason that I thought that the words "like
products" might lead to dispute when it comes to a matter of
comparing the rates charged on imported and indigenous goods.
MR. R.J. SHACKLE (United Kingdom): Mr. Chairman, I wonder
whether I might adjust one point which I made earlier. I was
saying just now that one could interpret "like products" in the
sense of customs tariffs. In the particular case which the
Indian delegate has just mentioned, it is slightly different. One
would interpret "like products" in the sense that if the particular
goods fall within a particular item, then they are "like products"
for this purpose.
CHAIRMAN: The delegate for South Africa.
DR. J.HOLLOWAY (South Africa): Mr. Chairman, as I said at
the beginning, I am trying to save the time of this Commission,
because the subject was discussed during the whole session of
Commission B, I think. It is clear, however, that all the
members of this Commission are not aware of the course that this
matter took, and perhaps I may just say a few words on that.
In Commission B , it was admitted on all sides, both by those
who wanted to include services in the Charter and those who wanted
30 31
to exclude services, that there are problems and very serious
problems affecting international trade concerned with transportation,
and other services - and I should s y that I am in full agreement
that those problems are sarious to us all. The attitude taken,
however, by those members of Commission B who did not consider that
we could deal with transportation and other services in the same way
as we are dealing with other subjects, is that the matter is far
too complicated to be dealt with in a few all-embracing sentences,
After a very long discussion, the matter was referred to a
sub-committee. That sub-committee considered the matter very
fully and came to a unanimous conclusion, which is the one to which
I referred before, given in document W/144. I shall read just
the necessary parts of that to make clear what the approach was
of that Commission, and I wish to suggest that that covers the
whole of the subject also for Chapter 5.
CHAIRMAN: Do you not think that all the members of this
Commission have read it?
DR. J. HOLLOWALY (South Africa): Well Sir, it is quite clear
from the discussion that they have not all read it.
The reports says: "Members recognize that transportation,
telecommunications, insurance, banking and certain other services
are substantial elements of international trade, and that any
restrictive business practices in relation to them may have
harmful consequences similar to those described in Article 39.
Such practices shall be dealt with in accordance with the following
paragraphs of this Article.
If any Member should consider that there exist restrictive
business practices in relation to an international service in the
meaning of Paragraph 1 which have or are about to have such 32
harmful effects, an that its interests are seriously prejudiced by
this situation, the Member may submit a written statement explaining
the situation to the Member or Members the public or private
enterprises of which are engaged in the services in question. The
Member or Members concerned shall give sympathetic consideration to
the statement and to such proposals as may be made with a view to
affording adequats, opportunities of consultation and effecting a
satisfactory adjustment of the matter.
If no adjustment can be effected, the matter is referred to
the Organization which then transfers it to the inter-governmental
agency if this exists. If they do not exist then the Organization
can make recommendations for, and promote international agreements on,
measures dasigned to improve the conditions of operation of the
service in question so far as they affect the purposes of the
Oganization".
Now that, I think, is as far as we can go. The subject of
transportation is not two subjects. As I have said, internal
transportation and external transportation is the same, just in the
same way that you have got to take into account railways and
Waterways, you have got to take into account internal transportation,
you have got to take into account airways.
All these things are vastly complex, and I claim, as one of
the members of Commission B claimed, that this Conference is not
competent to deal with those rules in detail. The matter is much
too comiplicated. I will give you an example of that. In the
sphere in which this Conference is competent to act, we have
brought our experts, and for the simple matter of defining the two
words "actuall value" for duty purposes, we have had a sub-
Comittee, which met for many many weary hours, and it has
referred this to a further sub-committee, which has spent more and
J.
E/PC/ T/A/PV/9 E/PC/T/A/PV/9
33
more weary hours, so that. some of the members had to drown their
sorrow at the "Mere Royaume" last nightl: Now, that Committee is
within sight of agreement, after having spent what would be about
three or four days of the time of this Commission on two words.
I ask you, Gentlemen, where shall we be if we try to define what
sort of practices in all the types of transportation, internal
banned
linked up with international transportation, have got to be/and
which ones have got to be allowed?
It is simply impossible for as to deal with the problem.
We recognise the problem, and I suggest that the draft I have read
out to you which covers inland tramsportation is ass far as we can
go, but if you leave the word "transportation" in Chapter 5, then
a lot of consequences follow from Chapter 5, and, it is to prevent
those consequenoes following from a matter which has not been
considered more than in just the barest outline that I more the
deletion of the word "transportation".
J. . . 34
CHAIRMAN: The Delegate of the United States.
Xr. RYDER (United States): I am much impressed by the
grem rks of the Deleate:of South Africa. There is a difficult
transportation problem. I can well understand that in drafting
a Chapter on restrictive business practices it would be very
difficult to conclude without transportation. Here in this
partiAular par5agrach of _rticle 1 we may be inclined to establish
a separate principle that there shall not be discrimination against
like produ ts in the internal.transportation of the marketing
countries; and. I should like to ask theADelegate of South Lfrica:
Wh t serious problem -do you think would arise in connection with
such. a provision?
CHAIRILE: Tho Dclegate of South Africa.
Er. HOLLOWAM (So-ah marica): dr. Ch-irz.n, I would mention
one specific example - one specific effect. The imported goods
start, at Poi-t - which, is the coast - and go to Point B, which
is thi interior; and the local goods also start at Point a, on
the coast, a go to B, which is the interior. But in actual
practice that is not the way things happen. A little bit of trade
does go along that way, but immediately you get beyond that
simplest example you get into difficulties.
Suppose that your competing local goods do. not go from the
coast to inland centre B, but from another inland centre to inland
centre B. How are you to relate those two things?
let us take a further case which happens innour country, aLd
which happens in most countries. Suppose that one of those routes
is an uphill route, having steep gradients, mountain passes,
and. the other one is on the plain or rownhill. How ate you to
relate those two things? That is obviously a problem of
rsilway economicO. You have got to ran a railway system as one
system, and immediately yoh pass beyond tWe very simplest case
E/PC/T//2'
G. G. E/PC/T/A/PV/9
35
you have a problem of what does this limitation or prohibition
mean. It requires the expert knowledge of people accustomed to
running railways under very different conditions to solve that
problem. It is a problem of railway economics, and, as every
railway system has to run as a whole, and as every railway system
has to take into account in some form or other the principle of
charging the product, by putting in a simple general principle like
this you are just barging like a bull in a china shop into a very
complicated system which has got to be built up over many years.
The second specific case,
The second specific case, the effect of including this as a
definite prohibition in para. 5, for inland transportation, when
you do not include it in para. 6 for international transportation,
is this: That you will be hitting at particular countries that
have inland transportation but no international transportation.
The people with international transportation systems are still
free to resort to these practices and do not pretend that they
do not do it. They do it every day. You are discriminating
against inland transportation and leaving the international
transportation free.
Well, I do not think that is a thing that this Conference
can stand for: - to introduce a thing which is deliberately
discriminatory, because we cannot deal with another part of it.
It seems to me to be very highly unfair towards a country which
has only the type of thing which falls inside the limited scope
of Chapter V. V
36 E/PC/T/A/PV/9
CHAIRMAN: The Delegate or Belgium.
M. Pierre FORTHOMME (Belgium) (Interpretation): The
explanations given by the Representative of the Union of South
Africa confirm me in my previous opinion that it is essential to
maintain the word "transportation" in the first sentence of
paragraph 3 of Article 15.
I am fully aware of the difficulties and of the complexity
of the problem, and I also recognize, with the Representative of
the Union of South Africa, that the practical application of the
principles which we are setting down is a matter for the specialists.
But the document of which the honourable representative of the
Union of South Africa has read a portion establishes the very fact
that the Organisation, as such, is competent in respect of the
problem of services, and that consequently the Charter is applicable
in this respect; and only in cases where the Organisation deems
that it is not competent does it say that it may refer such problems
to any other intergovernmental agencies, if such agencies exist.
All we want to do is to establish this well-recognized
principle in the Charter and have it to the Organisation to seek,
by the appropriate methods, the principles applicable to the
practical measures to be taken in this respect. The large part
of the honourable Delegate's observations does not apply to the
English text. .-.
theIR1: We nave h- tiu u £urbe :jf Delecates, an -
g"Urnl imprcsiorn i thatt the Dal&tt_ arG -j' vwry uttich .
favohe of l>vr^ ~out tLh wora t although t-isy
appreciate ehe very complex and difficult technical aspects of ths
question.
I¢ t ore sendin- the matter on to the ad hoc sub-Committee 37
I might be allowed to give my personal impression, it would be
this, that if we are going to accept the unanimous report of
the sub-Committee on services, it would then be quite logical
that we should apply the principle of such an act in some specific
ease where we can see at once that services can be run in a way
which will be harmful, It we say that to, run transport in a certain
way wuld disoriminate between netional products and imported
products, then I feel that it is natural to say so, and we do not
by doing that prejudice in any way other aspects of the harmful
effects, or the way in which services are conducted. But I am
no export, so I am speaking with considerable diffidence. I
just wanted to indicate some line of thought that might perhaps
be of some help to the sub-Committee when we send the matter on
to them.
E/PC/T/A/PV/9
V E/OC/T/A/PV/9
Dr. J. HOLLOWAY (South Africa): Mr. Chairman, I am sorry that
you leave the matter at that. I indicated, when I opened the
discussion, that I was trying to save the time of this Commission by
linking up with the other Commission, but evidently I have failed in
that; and I must carry the point one stage further. It seems to me
perfectly obvious from the discussion that has taken place, that the
point there that discrimination includes one sort of transportation
and excludes other sorts of transportation has not been taken into
account by this Commission at all and if transportation is left
here, then this Commission, in order to be consistent, must go in
for international, transportation inland waterways and aerial
transportation, and the whole caboodle. That is one point.
, . . had
The next.point hat I would- ave made if'I/not tried to save
th -Commission.time, is this. You cannot judge the running of a
~~~ . .
railway system by one little bit of a railway system. That is
completely impossible. I quoted one case to the American delegate
where, if that was the whole of the railway, there was clearly
discrimination bet the matter is not as simple as that, because every
bit of a railway system is part of every bit of a railway system.
The railway system has to maintain very expensive permanent ways.
It is a matter of great importance for it whether it can use the
permanent ways to full advantage. Therefore, on occasion, it must
charpe a rate which does not Bayfor remy much more than its peite
expenses in order not tno have empty trucks runnig to and fro.
Now, in the course of doing that,cht may charge a rate whiab happens
to ba of an advantage to o lwhice is lpe of trade and. -I:hh ;1ower
than the rate on imported goods. The question has got to be solved
by experts whether ic that case t ere is an a-tual case of.
discrimination against the impsrted articles. Membere here seem to 39
think they can make one general rule and that it is simple to apply
it. I tellyou, Gentlemen, it is not simple to apply it. You
must look upon a railway system as whole system. You are putting
yourselves, by one general rule which is ascribed to a general
management of a railway system, in a position that you tell that
railway system: "You must hold yourselves to this general rule,
and if your whole railway system loses on it that is not our
concern". Surely that is a most unreasonable and unbusinesslike
attitude to take up for any international body. The problem is
one of how to manage an exceedingly complicated system. Now if
you have a system which is under one management, let us say a state
railway which serves all parts of a single country, at least you
have one control, but in actual practice you will have that in the
case of some countries. In the case of other countries you have a
large number of railway companies running separate railways where
the control of the government is immediately less close than it is
in the case of its state railway. So again you are discriminating
against the countries with the state railways in favour of the
countries with private railways.
Then you get a further complication. You get a country where
you have both private railways and state railways, and sometimes you
have a country where you have Private railways and state railways
running next to each other in competition. You get complications
there that people do not dream of here, and to come along with one
general rule which you will, I think, admit you cannot interpret at
this Conference, and say: "Whatever happens you have got to foIlow
that rule", is I submit to you, the most unrealistic thing that this
Conference can do, but if this Conference insists on including one
portion of transportation I want to challenge anybody to give me any
argument why it should not include at the same time ocean transport
canals, airways, mater transport in every country in t e w r d or hn ol ri
everytobncym stha m xeso oa n-ber' zf thli Organizatian. You cen
answer this queotionke. yTu lip. 40
CHAIRMAN: The Delegate of Australia.
Dr. H.C.COOMBS (Australia): Mr. Chairman, I reel some
sympathy with the Delegate for South Africa in relation to this
matter, because of the very wide range of possibilities that are
brought in under this Article.
When we came to look at it for ourselves, I think we came
to the conclusion, with customary modesty, that in these matters
we were perhaps, on the whole, not unduly wicket and that there-
fore the burden of accepting this would not be particularly
severe: in fact, on balance, we might gain something from the
elimination of other people's excravagances, which in this
respect at any rate were greater than our owns But we did
feel some trepidation about accepting it, because of the
multiplicity of things which it might cover. We erice to
track some of these down and found the oddest of provisions
here and there in our economy for giving slight and unimportant
elements of protection to local products and it would, quite
frankly, be an exceedingly difficult task to find those things
in all their ramifications and remove than by legislative action
within any reasonable specified time.
Similarly, in relation to transportation, particularly where
Government-owned railways and other forms of transport are con-
cerned, the issue is particularly complex, since the matters
which Dr. Holloway has referred to are sometimes imposed by law,
or by some form of legislation, and sometimes are imposed under
the authority of the manager of the enterprise under some form
of legislative authority which he is given. In those cases,
it would appear that if he had the good fortune to fix his rates
in terms of a general authority given to him, then he would be
E/PC/T/A/PV/9
S 41
free to discriminate in any way he liked, as transport authorities
- as I gather - ordinarily do by discriminating against those
people who can pay most. On the other hand, if it happened that
it was the normal practice to require that the freight rates had
to be laid on the table of the Lagislatur and receive Parlia-
mentary approval - or at least lie there sufficiently long for
it to be assumed that the Legislature did not object - then
they would be subjected to this discrimination for something
which arose from a form of procedure in regard to the legis-
lative customs of the country.
It just did occur to us that a lot of these things are not
terribly important, and we wondered therefore whether we night not
avoid a lot of difficulties for the countries concerned if this
rule were made so that it applied in full to laws, regulations and
requirements which might be established in the future and applied
to those in the past insofar as complaints were received and it
could be established that the law or the requirements complained
of were, in fact, discriminatory against the imported product.
That would mean, I think, that a lot of trivialities would pass
unnoticed and that countries concerned would be saved a lot of
hard work in finding then and would be saved any implication
of bad faith because they happened to overlook them,
It would also mean that in the case of the rather complex
type of thing which Dr. Holloway has referred to - where you
might get things like freight rates, determined by a multi-
plicity of factors, etc, which, on the face of it, might appear
to be discriminatory but were determined on quite different
principles - it would be necessary for it to be established
that they were, in fact, discriminatory before a country, would
be expected to do anything about than,
E/PC/T/A/PV/9
S S E/PC/T/A/PV/9
42
I want to make it clear, Mr. Chairman, that we are not
seeking to evade the obligation proposod in this part of the
Charter, but we do suggest that if it is taken as it is;
in its present form, many countries will find it exceedingly
hard to observe the latter of the Article and identify all
the oddities of protective practice which they may have
embodied in their local laws in one way or another. I
believe that, if we can put it around in that way, some of
the difficulties which Dr. Holloway has in mind might well
be overcome. 43
CHAIRMAN: The delegate for Belgium.
M. P. FORTHOMME (Belgium) (Interpretation): Gentlemen. I
apologies for taking the floor so often, but I want to point out,
first of all, that I consider the explanation just given by
Dr. Coombs highly constructive and we should do well to take it
into consideration for our future work.
As far as Dr. Holloway is concerned, I would first of all
point out that,when I speak of transportation, I mean all kinds of
transportation from a man's back to jet propelled rockets.
On the other hand, if, as far as international transportation
goes, there is such a high degree of competition among our
transportation agencies that I can hardly imagine a case where one
transport organization would be brought to a point at which it should
discriminate in favour of its own national product. I quite
agree that it such a case did arise, I would be quite prepared to
have this international transport on those conditions treated in
exactly the same way.
Finally, as far as the complexity and highly complicated
nature goes, on which Dr. Holloway so forcibly insisted, I would
like to say that once the principle is admitted, then the
delegations, on the part of the Organization, could form a
specialized organization of experts, which would be charged by the
Organization itself to fulfil the principles as established by the
Charter and the reasons for maintaining the principles in the
Charter itself.
DR. J. HOLLOWAY (South Africa): I am prepared to accept
that procedure, Mr. Chairman. Let it go to the sub-committee,
and if the sub-committee is prepared on the suggestions of both
Dr. Coombs and Monsieur Forthomme to take the whole field of
J.
E/PC/T/A/PV/9 E/PC/T/A/PV/9
transportation in its stride, well let them try. I have no
objection to them finding out the difficulties.
As for the question of competition in international transportation
he must be thinking of narrow seas. Let me tell him that shiploads
of things coming from western European ports were charged the
same rate of freight as ship-loads carried by the same ship from
Durban to Mombassa; from Liverpool and Southampton and
Rotterdam rates would be the same to Mombassa, and from Durban to
Mombassa, practically next door. There is a good deal of
that international discrimination against the trade of certain
countries, and we have suffered from that.
It is particularly for that reason that I must draw attention
to the different in the treatment of this subject in this
Commission and in Commission B. In Commission B, where the
subject of international transportation was discussed, t e.h -
Commission was glroaga1y _adest Oaaling wi hby some ,' e br ad
gencoal o.ndemnation. CommisAionh&,ewnera ocertain types of
national transport is discussed, is strongly in favour of
condemning what is happening only in certain countries, and I
think certain of the delegates here do not realise that that
condemnation may be applied to their own countries, while
international transport which affects their international 1
mooetition is free fro mthose uras.eS
AIRMAN?.: The degate , of t UniJed itates.St.:
- O.B. RY(DER ed UnaietStts): Mhr.rman, I have very Cai, T;
littdle to ad to wahaet has lraday bI always recogniseeen sid.3.
that -har are great difficultielyins in eaeral principlepp na gn --XI, '
of this kind, qd many of ughttohtose ha.ve been br-bu oere-
Probably the m st dirficuplt on the-the p>inciie i z,,-
Charter of administrati n oa teansportation- chsrgss and what the
traffic will bear. I think ahon f, for this rensci,*this
provision were adopted, each country wouldhisy to conform to tid1
provision.
44 E/PC/T/A/PV/9
CHAIRMAN: The Delegate of the United states.
recognised
Mr. RYDER (United States): Mr. Chairman, I have invariably,
and I think all of us recognise, that there are great difficulties
in applying a general principle of this kind, and many of those
have been brought out here. Probably the most difficult one is
the principle of basing transportation charges on what the traffic
will bear.
I think that if this were the danger, this country would try
to conform to this provision, and, as the question was raised
with the Australian Delegate, that a country would correct such
practices as it was aware of and would rely upon complaints
naturally from other countries to catch things of which the, were
not aware.
So I think that phase of it is rather easily handled.
In applying the principle of what the traffic will bear, the country
applying that principle would, of course, base its regulations
upon that principle, and if any country felt the need, they would
make a complaint under article 35; and if the practice was a
reasonable practice, in conformity with the usual standards
observed in the transportation rates of the country concerned,
there would. probably be very little difficulty with it.
In any case, if it went beyond that, the burden of proof would
be upon the complaining country, and it might be that as a result
of- complaints of that kind you might get some practical
application of these principles which might be worth while,
CHIRMAN: Well, I think we can consider th.e discussion
closed; and as for terms of reference to the ad hoc Sub-Committee,
I think we might say that they should not try to come to any
decision on this until after Commission B has dealt with the
unanimous Sub-Committee Report on the services. when that has
been done and if that Report is adopted by Commission B in the name
G. 46
of the Preparatory Commission, then our ad hoc Sub-Committee
has a safer background for their examination of this question,
and then they will be guided by the discussion that has taken
place here.
May I take this as agreed?
Then I would like to say that it is only half-past 5, and
we could still go on; but we shall not be able to terminate
the discussion on Article 15 to-day and that is quite what I
expected; and we must then decide whether you will try to do it
in the morning meeting to-morrow - we cannot to-morrow afternoon
because B is meeting, and in principle we should not meet at the
same time; but if you all agree, we could meet at 10.30 to-
morrow morning.
One more word. Mr. Wyndham White just tells me it has been
arranged that there will be Sub-Committee meetings for to-morrow
- rather important ones - so he raises the question as to
whether we could possibly meet to-morrow afternoon at 2.30, at
the same time as Commission B; but I must then turn the question
back to him. Is he able to provide interpreters and organise
the various staffs to-morrow afternoon?
Mr. WYNDHAM WHITE: Yes.
CHAIRMAN: May we then decide that we meet to-morrow
afternoon at half-past 2, and then we go on with the examination
of our paper.
We are discussing paragraphs 1 and 2, and I have already
said that on paragraph 2 there was an Amendment by the South
african Delegation, but also by the United States. We find it
on page 6 of Document 150, and as far as I can see, that is part
of the United States proposal which does not contain many
alterations from the New York text. He inserts the word
"purchase" and also the word. "exhibition" in the text, and the
last alteration, I take it, is connected with the rest of his
proposal, and I would suggest that we pass by this until we take
it on the Amendments on the cinematograph films afterwards.
Mr. RYDER (United States): That is satisfactory, Mr.Chairman. 47
CHAIRMAN: The Delegate of the United Kingdom.,-CAor..
MlA KA. SHUCCed (Unrgdis:Kin'i): I take it that in
discussing thiedUnttur S-ates text we are supposed to turn "a Nelson
eye" wherever we see the words "exhibited" and "cinematograph films",
and discuss thg para&raph as if they were not there, reserving the
subject of films until later.
A=IRMW': But before that I would like to mention the
proposal of the Chinese Delegation, because teat s6ems to be the
most radical one. They propose the eoeplot6 deletion of this
paragraph. I do not know whether the Chinese Dclegation, after
having read all the different amendments, maintains this rather
radical proposal.
The Delogate of China.
Mr. IAS. Mi (China): Mr. Chairman, I have already explained
our position in our discussion of paragraph 2. I said those
words somewhat in anticipation of this third paragraph. As I
have already said, any attempt to extend the scope of national
treatment beyond taxation would be going too far to be acceptable
to us, so I do not think I shall go oversame azae ground again,
Our point has, I think, been made clear.
CAHAIRMN: Then we hav ie -tho middle of page 6 of Document
W/150 the next radical proposal by tho Delegation of Cuba. That
Delegation proposes to deleee thp second oarta Ogra Praaph 3.
We have also proposals by the Delegations of Benelux, Czechoslovakia
and New Zealand for a new draft of paragraph 3, similarly from the
Delegations of India and Norway. Finally, we haee thV proposal
of the United States Delegatirn alXeady mentioned.e Docs the
United States Delegate wishpto sPeak on tmisdaeencmant now?
V E/PC/T/A/PV/9
48
Mr. Oscar B. RYDER (United States): Mr. Chairman, I think
the amendment of the United States needs little explanation. In
the New York Draft there was a separate paragraph in regard to the
cinematograph film, saying there shall be no restrictions upon
regulations restricting the amount of foreign films shown in a
particular country, but subjecting them to negotiation. The
United States Delegation cannot accept that proposal. It leaves
wide open the door for violating fundamental purposes of this
Charter.
What we proposed here is that in the case of cinematograph
films they should be permitted to continue for a period of three
years af ter the Charter entered into force. Further regulations--
there is a question here of mixing regulations--are permitted to
continue for a year. In that instance, we art in agreement with
the New York Draft.
Then there is a provision that the"requirements permitted to
be maintained under the foregoing proviso shall be subject to
negotiation for their liberalization". There is also a provision
that "such requirements"-that is, the abolision of film regulations
in three years and other regulations in one year-"may be continued
for additional periods in respect of any product if the
Organization, after consultation with the other Members whose
trade is substantially affected by the requirement, determines
that in the special circumstances alternative measures permissible
under this Charter would not be practicable".
The language chosen there: "in the special circumstances
alternative measures permissible under this Charter would not
be practicable" replaces the words in the New York draft:
"concurs that the requirement concerned is less restrictive of
international trade than other measures permissible under this
Charter". V
Now, whether a requirement of one type is more restrictive
than another depends upon the degree of different restriction.
Whether or not a given mixing regulation is more restrictive
than a given tariff duty depends on the height of the duty and
the nature of the mixing regulation; and at is in order to
afford a real measure for determination here that we suggest the
adoption of the term "alternative measures pormissible under
this Charter would not be practicable'.' in place of "the
requirement concerned is less restrictive of international trade"
CHAIRMAN: May I ask the Delegate of Cuba if he would like
to support his proposal, namely, to strike out completely the
second part of paragraph 3? 50
Dr. G. GUTIERREZ (Cuba): Mr. Chairman, our reason is very
simple. We consider that this matter is so complicated that
attempting to establish international rules to handle internal
matters is something that goes beyond our power, so we are humble
enough not to insist.
Mr. J. MELANDER (Norway): Mr. Chairman, the Norwegia-
delegation is in complete agreement with the Cuban proposal to
delete the two last sentences of paragraph 3 of Article 15. I
think perhaps that it might be useful to the members of the
Commission to try to indicate, in a more general way, the reasons
why we are of that opinion.
We feel that the problems which we are to solve through this
Charter, are to regulate the external trade of the countries. We
feel, further, that it is quite obvious that, if the different
member countries shall have the right which is provided for, to
develop an economic polio in changing circumstances and especially
to introduce, or to continue, degrees of planned economy, it will be
necessary to introduce regulations, laws, requirements etc., which
may have the effect of interfering with the external trade. In
this respect, however, I think we shall have to distinguish. It is
quite obvious that a great many countries represented here and most of
those represented at the final Assembly, are in the position that
they have not got typical economic systems like, for example, the
United States, or a typically clear-set regulated system like the
Soviet Union. We shall find that most countries are somewhere in
between, and the provisions in the last part of paragraph 3 of
Article 15, in our view, would go much too far. They would, for
example, exclude the possibility for a country to lay down that, in
E/PC/T/A/PV/9 E/PC/T/A/PV/9
51
order to develop their economic life, they should have the right,
for example, to fix that a product should be composed of certain
categories of raw materials, some of which might be of foreign
origin and some of domestic origin. That I think is quite out of
the question. It is really one of the methods through which a
planned economy is developed, and to out that out would be quite
outside the scope of this Charter. On the other hand, as we have
indicated in our memorandum, if we lay dwn that, for example,
electrical equipment should be made of certain ra materials, this
or that category in that case, we will not have the right to
decide that a certain quality should be included in such a way that
qualities coming from outside should. not be allowed, whilst qualities
domestic
coming from the/production should be allowed. In that respect,
we should have no discrimination. That would, however, be provided
for through the first sentence of paragraph 3 as it now reads. In
other words, we feel that we have,in this case, the most typical
example of a clash between the methods through which we shall try to
regulate the external trade of a country, and regulate the internal
domestic policy. In out it in a nut-shell, I think we can say
that here is one example where we shall have to see whether it will
be possible to provide for a comparatively free and liberal external
commercial policy, at the same time, maintaining to a certain.
extent, a planned economy on a domestic level. That test we shall
have to come across several times, not only in this case but later
on as well. Here is one example where I think it is quite clear
that we shall get it. That is the reason why we think that the last
two sentences of paragraph 3 ought to go out. Futher, I would at
the same time mention that paragraph 2 and the first sentence of
paragraph 3, in our view, would need some exceptions, though however
I shall return to that at a later stage. E/PC/T/A/PV/9,I/ L/- /V
52
Ar. R.JTSHIedLEingdom (Unitua KLa: man Mr. Chzri I could like
just to ask a question to make sure that I understood the
Neorgweg'iapn Dleates oint correcdtly. I o not know whether what
he desires is to be freed teo treart ocmstic poduts differently
frpom like imorted ones or whether, on the other hand, what he
wants Is to be free to require that certain domestic raw materials
shall be used which are not like the imported raw mhaterials wich
they substitute.
It seems to me that is an essential point here, because it
it is No. 2 t-o the quengsicertn nof usi ai domestic raw materials
which are different - I do not see that that clashes with the
principle of this paragraph. If, on the other hand, it is a
question of leaving freedom to treat like domestic products more
favourably than like imported products, it seems to me that there
is a very direct clash with the principle 'of this paragraph, and
I think, in order to appreciate the bearing of this point, it
would be as well to have that point clear.
CHILd: The Delegate of Norway,
MMELANr. J. DER (Norway): Mr. Chairman, I think the answer
is comparatively simple. I will try to illustrate it by way of
an example..
In Norway we would normally have a regulation to define that
margarine should include a certain amount of butters Margarine
is produced either in Norway or imported. For practical
purposes, it is produced in Norway, because we can knock out
any foreign competition on that.
With regard-to butter, the answer would be that if we.
decided that, for example, margarine should include 20 per oent
of butter, we would not lay down that that should be totally
Norwegian butter, to the exclusion of foreigen buttr,but,
1l-r In 53
whether of Norwegian or foreign origin, it would be on an
equal footing so that in a case where a foreign country
like Denmark, for example exports butter to Norway, that
would be completely equal to Norwegian-produced butter in
that respect. I think that covers the question.
Mr. R.J. SHACKLE (United Kingdom): Gentlemen, in view
of that explanation I should like to raise the question whether
there really- is any conflict with the provisions of this para-
graph, because, as I had understood them, this paragraph is
concerned with like products, If we read the last two
sentences correctly, it surely must mean that this is meant to
"preclude the application of internal requirements restricting
the amount or proportion of an imported product permitted to
bo mixed . ," exactly, and if I understand the Norwegian
Delegate's explanation rightly, that is not what he wants to do.
CHAIRMAN: The Delegate of Czechoslovakia.
M. Stanislav MINOVSKY (Czechoslovakia) (Interpretation):
Gentlemen, I want to point out that it is not perhaps as simple
as it seems. If we read the provisions of this paragraph as
"to preclude the application of internal requirements restricting
the amount or proportion of an imported product permitted to be
mixed, processed or used", it all depends if we say 20 per cent
or if we say 40 per cent. If we go down to 20 per cent; it
moans a restriction of the amount of imported products.
The whole thing seems to us so involved that we cannot
grasp it.
S
E/PC/T/A/PV/9 E/PC/T/A/PV/9nIr/I
6 54 V/ /J4JX-v/a
U. Jo Xlader (Norway): Mr. Chairman, I would suggest
answering thee Delegate of the Unitd Kingdom by saying that we
have not read the last part of paragraph 3 in the way in which
he has road it. We read it in the way that we would not have
the right to li down a regulation which would, in fact, result
in the cutting down of goods, raw materials and so on, which we
have hitherto imported..
Mr. R4.SLCKE (United Kingdom): Well, Gentlemen, I
wonder whether, in that case, we might ask the United States
Delegation - as it is their amendment - if they can give us
an opinion as to what is intended, because we certainly had
read the whole of this paragraph as referring throughout to
lik;products ande nothing but likcproducts.
Mr. Oscar RYDER (United hStates): Mr. Cairman, the point
raised here is a vary interesting and complex, one and it involves
soLOspects to which I have not given conswideration, I -old
etherefore prefr not to answer that question now but to defer
y swer until tomorrow, aif ethaet is 3groammbo t the Coinsion.
CHsFRMLN Ad t is ealready tonminutes past six, I
think we can close the discussion and come together again at
30 ;morrow afternoon.
The M;tng rosa atp 6.10 s). |
GATT Library | qx889tg2965 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Ninth Meeting of Commission B held on, Thursday, 12 June 1947 at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, June 12, 1947 | United Nations. Economic and Social Council | 12/06/1947 | official documents | E/PC/T/B/PV/9 and E/PC/T/B/PV/7-11 | https://exhibits.stanford.edu/gatt/catalog/qx889tg2965 | qx889tg2965_90250078.xml | GATT_155 | 111 | 779 | UNITED NATIONS
ECONOMIC CONSEIL RESTRICTED
AND ECONOMIQUE E/PC/T/B/PV/9
SOCIAL COUNCIL ET SOCIAL 12 June 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
NINTH MEETING OF COMMISSION B
HELD ON, THURSDAY, 12 JUNE 1947 at 2.30 P.M. IN THE
PALAIS DES NATIONS, GENEVA
HON. L.D. WILGRESS (Chairman) (Canada)
Note: Owing to the fact that it was necessary for
Commission B to meet at the same time as Commission
A it was not found possible to provide a verbatim
record for the 9th Meeting of Commission B. An
expanded Summary Record has however been prepared
and will be distributed to Delegations.
NATIONS UNIES |
GATT Library | tz174bk7631 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Ninth Meeting of the Tariff Agreement Committee held on Wednesday, 3 September 1947, at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, September 3, 1947 | United Nations. Economic and Social Council | 03/09/1947 | official documents | E/PC/T/TAC/PV/9 and E/PC/T/TAC/PV/8-10 | https://exhibits.stanford.edu/gatt/catalog/tz174bk7631 | tz174bk7631_90260029.xml | GATT_155 | 12,135 | 73,126 | NATIONS UNIES
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/TAC/PV/9
3 September 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
NINTH MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON WEDNESDAY, 3 SEPTEMBER 1947, AT 2.30 P.M.
IN THE PALAIS DES NATIONS, GENEVA.
Hon. L.D. WILGRESS (Chairman ) (Canada)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247).
Delegates are reminded that the texts of interpretations, which do
not pretend to be authentic translations., are reproduced for general
guidance only; corrigenda to the texts of interpretations cannot,
therefore, be accepted.
UNlTED NATIONS J.
CHAIRMAN: The meeting is called to order.
Members of the Committee will have sean from the notes of the
circulated documents before us that the Committee, proceeding with
its consideration of the text of the General Agreement, submit
documents S7 and S8 for consideration and approval. These two
documents comprise the Sixth Special Report of the Tariff Negotiations
Working Party which was issued on August 27th, and the Special
Report given in document S8 which was issued on September 1st,
Since the Sixth Special Report deals with the situation up to
August 23rd and is therefore somewhat out of date, I think we can
simply take it as read and approved, and we might only give
consideration to document S8, which is the latest Report and which
brings the situation more up to date.
Are there any comments on document S8?
I take it then that the Committee approves of these two
documents?
The Delegate of Chile.
Mr. A. FAIVOVICH (Chile) (Interpretation): Mr. Chairman,
reading through this Report, I would like to know if the final date
for the signature of the Agreement is maintained on the 30th September,
that is to say, the date on which the Act will be signed and the
Agreement will therefore become authen le.
The date which has been fixed is the 30th September, and this
date is based on the assumption that the tariff negotiations will
end on the 10th September, but it seems to me that it is probable
that by the 10th September these negotiations will not be concluded.
Therefore it is extremely important that a definite date should be
fixed for the signature of the Agreement - especially when we consider
E/PC/T/TAC/PV/9
2 J. 3 E/PC/T/TAC/PV/9
the case of countries which have to leave Geneva for various parts
of the world, and especially if, we consider the shortage of ships
and the lack of transport by plane.
The same situation will arise, in fact, with regard to the
forthcoming Conference in Havana. Therefore, we should now fix
a date for the signature of the Agreement, and also fix a date
for the end of these tariff negotiations.
It seams to me that, in spite of what has been done, some haste
ought to be shown here by the countries which are most interested
in the conclusion of these tariff negotiations, that is to say, the
key countries.
We have read in the press various comments which are somewhat
pessimistic in tone, and which are pessimistic if we consider the
success and final result of these negotiations. Therefore, I think
that it would be to the interest of the countries which are most
concerned with these negotiations to proceed with the utmost speed
to reach a final conclusion of this Agreement.
To sum up what I have said, I should like to press the point
that a final and specific date should now be fixed for the
signature of the Agreement. 4
S E/PC/T/ TAC/PV/0
CHAIRMAN: The Delegate of Chile has proposed that we
decide now on a fixed date for the signature of the Final Act.
I would like to obtain the views of Members of the Committee
with regard to this suggestion. Are there any comments?
The Delegate of Czechoslovakia.
H.E. Mr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I
would like to support the proposal of the Delegate of Chile,
because I too would liks a fixed date for signature, especially
as I want to have some leave.
CHAIRMAN: Are there any other comments?
The Delegate of the Lebanon.
M. MOUSSA MOBARAK (Lebanon): Mr. Chairman, I am afraid
to say it, but the Delegate of Chile has said what everybody in
this room is thinking. I would like to thank the Delegate of
Chile for being our interpreter in this matter. In fact,
what he said about countries far away from here is true,
particularly about my own country.
Certain Delegations - especially the Heads of Delegations -
have to go home in order to discuss the Charter with their
Governments. If the beginning of the Havana Conference is to
be on November 21 and we are only going to be finished here on
October 15, there would be a very short time between the end
of the negotiations in Geneva and the beginning of the Havana
Conference in which to receive instructions from our Governments
and to discuss the various Articles of the Charter.
Therefore I think it would be of some interest to try and
findnow a definite date for the end of our discussions here.
At least it would be worth while to be informed as to the date 5
S E/PC/T/TAC /PV/9
which the various Delegations envisage for the end of these
negotiations. I must say that at the present moment I think
the most important countries have not yet reached agreement
here and that the negotiations have been very limited. There-
fore I am afraid that the end of September will arrive without
leading us to any real progress, and I believe it would be
useful to discuss the matter in a vary frank way, in order to
see whether thenegotiations are going to lead us to something
or not.
CHAIRMAN: Are there any other comments?
The Delegate of France.
M. ROYER (France) (Interpretation): Mr. Chairmen, first
of all I would like to answer the comments which have just been
made by the Lebanese Delegate.
If the Lebanese Delegate reads carefully the report of the
Working Party he will find at the end of this Report sufficiently
precise information to show that the parties intend to reach
an agreement. (At this point the Delegate for the Lebanon made
an observation, to which the French Delegate replied that it
seemed these parties had sufficient possibilities of reaching
such an agreement).
On the point raised by the Chilean Delegate, I do not think
we can commit ourselves now to fixing a specific date for the
end of the present negotiations. Nevertheless, there are two
possibilities. The first one is to sign the Final act and the
Protocol without appending the Schedules to the Act and the
Protocol at the time of signature. The other alternative is to
wait to sign all the documents until the time when all the
documents are ready for signature, and then the Delegations should S 6 E/PC/T/TAC/PV/9
entrust their diplomatic or consular representatives in Geneva
or Switzerland to affix their signatures to the Act.
These are the two possibilities, but I think it would be
very dangerous now to set a definite deadline for the con-
clusion of the negotiations.
CHAIRMAN: Are there any other comments?
The Delegate of the Lebanon.
M. MOUSSA MOBARAK (Lebanon): Mr. Chairman, we all agree
here that we have the best intentions in order to bring these
negotiations to an end. In fact, we have a saying in French
that "the road to Hell is paved with good intentions."
What I think is that it would not be of any value to sign
here any kind of Final Act or any Agreement and leave the
negotiations for later on, because the main purpose of the
Agreement is to include all the negotiations. If the negotiations
are not terminated, I do not see any emergency for signing the
Agreement itself, If we are delayed here it is only on account
of the key countries which have not ended their negotiations in
Geneva; they are responsible for the delay and they should
hurry to finish off those negotiations if we went to sign here
the Final Act.
CHAIRMAN: Are there any further comments?
The Delegate of the United Kingdom.
Mr. J.R.C.HELMORE (United Kingdom): There have been one or
two references to the key countries. I do not know whether it is
intended that the United Kingdom is regarded as representative
of a key country. I think probably it is, when I look at the
terms of the last Special Report of the Tariff Negotiations
Working Party. E/PC/T/TAC/PV/9
I only want to ask two questions about what has been
proposed. The first is specific: we pick the date of
September 30, for the sake of example, by which all negotiations
must be completed; suppose that negotiations between three or
four key countries are not completed? What happens then? Do
we all just put our papers away in a large tin box and disappear
beck to our capital? If so, whet happens to the agreements that
have been made between the key countries and the non-key countries,
or between two key countries? I very much doubt whether those
agreements would survive.
The second question I went to ask is whether there is a
suggestion about that these countries whose negotiations are
taking longer are delaying matters. I do not myself think there
is such a suggestion and it might be useful to remember what
the Leader of the United States Delegation said in his speech
in the final Plenary Session, that the 1938 negotiations between
his own country, mine and yours, Mr. Chairman - only three
countries - took a great deal longer than the time we have so
far spent in Geneva or are like to spend on the probable result
as shown in the last Report.
I do not myself think there is occasion for undue alarm
about the time these negotiations are taking. I ,uld suspect
that within a comparatively few days a geat deal more will happen
which will make the picture look much less gloomy than it has
been. I believe that even since your last Report was written
further negotiations have got to the state when they can be
regarded as virtually finished.
7 E/PC/T/TAC/PV/9
Mr. J.R.C. HELMORE (United Kingdom) Mr. Chairman, may I
make one comment on the translation? I think there was a
reference to Agreements between countries already signed. I said
"concluded". It is rather an important difference, in that they
have not been signed.
CHAIRMAN: The Delegate of Chile.
Mr. Angel FAIVOVV--CH (Chile) (Interpretation) Mr. Chairman,
I would like to revert now to this question of date, This meeting
has been held here now for a period of f ive months and we think
that such a conference should know by what date it is going to
conclude its work. We have decided here that the Havana Conference
should meet on 21 November and therefore it seems to me that
position of the countries which have to study the Charter and all
the documents which will be submitted to them before the Havana
Conference - and I am referring to sixty countries - ought to be able
to study those documents in time, and they will not be in a position
to do so if we do not fix a date for the conclusion of our work.
This Conference reminds me the Congress of Vienna, the
"Dancing Congress", but it seems to me that in a way, this is a
somewhat "Agonising Congress".
If I study the Report of the Working Party it seems to me that
this Report lays the burden of responsibility on a certain number
of countries which we can call key countries It seems that the
are known by
preferential régimes which/certain of these countries way
somewhat slow down the negotiations, and that those negotiations,
for that reason, might be bogged down now. I think we can state
that the success or failure of this conference will depend largely
on three or four countries. During the five months which have
elapsed since the beginning, of this conference, the differences
between the different systems of tariffs of the countries have
become well known, and in 80 days the Havana meeting is going to
8
P. 9
P. E/PC/T/TAC/PV/9
gather and therefore we ought to fix now the date for the end of
our work here.
Mr. Chairman, I think that the only solution, as I say, is to
fix a date, and if there are any outstanding difficulties then
the countries which as I have said have the responsibility for the
success or failure of the conference must do their utmost and show
the utmost spirit of co-operation and solidarity so as to end
successfully our work here. The differences between the tariff
systems and between the standpoints of the delegations are well
known and I wonder whether anything will happen before the Final
Act. But, Mr. Chairman, although I respect greatly the position
of those most important countries, nevertheless we ought to fix a
date, and our delegations must assume the responsibility for giving
their governments time to study the documents and also the other
governments of the world which will be represented in Havana.
Dr. J.E. HOLLOWAY (South Africa): Mr. Chairman, I want to
make a suggestion which might get over the difficulties which have
been raised, particularly by the Delegates of Chile and the Lebanon,
difficulties which I have, too.
The first stage of getting, a document finished is purely
certification, simply stating that that is a correct document.
Now, you said yesterday, Mr. Chairman, that we should get the
text of the document, apart from the Schedules, finished by the end
of next week. Whether we finish it then or a little later, that
text should in any case be finished well ahead of the final
negotiations being finished. Now, what I would suggest is this:
that as soon as we have that text a copy should be prepared which
immediately lies for signature, that is certification; that when
a country has finished with all other countries and it has got
schedules, then those schedules simply be initialled between those
two countries and given to the Secretariat. Then when you have 10
P. E/PC/T/TAC/PV/9
done that you can say, like Lady Macbeth: "Stand not upon the
order of thy going" but go at once. You have finished. And do
not disturb other people; let them get on with their job.
If a country is not finished to that stage obviously it
cannot go away, so no damage is done to it. And if, having done
that, something happens here in the latest stages which makes it
to
impossible for that country/go through, it just does not ratify.
So we do not lose anything that way and we can arrange for the
people to go away as soon as they have finished. 11
E/PC/T/TAC/PV/9
CHAIRMAN: The Delegate of the United States.
Mr. Winthrop BROWN (United States): Mr . Chairman, we
fully understand the feelings of she Delegates who have spoken
about the desire to know precisely when this meeting will be
oncluded, and when they may return home to report to their
Governments in more detail on the results of this conference
than it has been possible to do by correspondence.
On the other hand, it is intensely difficult to fix in
advance a firm date on which the highly complicated negotiations
which still remain to be conclude ed can be brought to a close.
I can assure all the Delegates present that so far as we are
concerned, we have an urge to get home which is as intense as
that of anyone else here, I am sure, and that we are constantly
motivated in our negotiations by the desire to bring them to a
speedy conclusion. We sense the same feeling in those with
whom we negotiate, and I think there is no doubt whatever that
the more complicated negotiations are being pressed as rapidly
as possible.
Now, when the text of this Agreement is determined by this
Committee this week and next week, and when any country has
completed the bilateral stage of its negotiations, I think it
would be quite possible for some of the Delegation at least -
perhaps most of it - to return home for the necessary
consultation and explanation with their Governments, leaving
technically qualified officers to see that the results of their
bilateral negotiations are properly included in the final form
of the Schedules, and that the indirect benefits on which they
are relying in many cases are also included as a result of the
negotiations of other parties. Thus it would be possible, V 12 E/PC/T/TAC/PV/9
when the text of this Agreement is agreed upon, for the
Delegations who have completed their tariff work materially to
out down their representation here, and to get a large part of
their staff home for necessary work. We feel that it is most
desirable, in fact essential, to have the signature of the
Final Act a complete process which takes into account not only
the text but the Schedules, so that we have before us, when
we sign, one complete document.
CHAIRMAN: I think tht all that has been said here today
shows that there is a general desire on the part of all
Delegations to finish the tariff negotiations as soon as possible
in order that the Delegations may return home to their
respective countries.
I think that the only reason why certain negotiations are
taking much longer than other negotiations is owing to the
complicated nature of these particular negotiations - the large
number of products that are involved on either side.
I know, as Chairman of the Tariff Negotiations Working
Party, that in recent days, over since the close of the Charter.
discussions, there has been an acceleration of the pace of those
negotiations, and a greater determination shown by the countries
concerned to complete those negotiations as soon as possible;
but I do not think, from what has been said today, that it would
be practicable to act upon the suggestion of the Delegate of
Chile and fix now a final date for the signature of the Final
Act, because it is impossible to predict or estimate exactly
the day on which these negotiations will be completed.
As both Dr. Holloway and Mr. Brown have pointed out, there
should be no reason why any Delegation, after the discussion on
the text of the Agreement had been completed and the particular E/PC /T/TAC/PV/9
negotiations in which they are engaged, should not be able to
send home the greater part of their Delegation, leaving behind
only a few technical officers to see that the final text
is in the way they think it should be, and then to authorise
their diplomatic representative in Berne or some other capital
to sign the Final Act. I think that, in the light of the
discussion that has taken place, we cannot very well at this
stage set a final date for the signature of the Final Act.
OHAIRMAN: The Delegate of South Africa.
Dr. J.E. HOLL.OWAY (South Africa): May I point out that
my suggestion makes it unnecessary to have technical people in
Geneva who are badly required at home, and I think it might be
worth while to see whether the suggestion would help the
Delegates, by asking for a show of hands.
CHAIRMAN: I think that depends on the circumstances in
each ease. Some Delegations might not feel it necessary to
leave technical officers behind to check the Schedules in
order to be quite sure that they are getting all the indirect
benefits they wish: that will be up to each Delegation. I
think we can only determine that in the light of the
circumstances as they arise.
M. Angel FAIVOVICH (Chile) (Interpretation): Mr.Chairman,
I would just like to say a few words on the comments made by
the South African Delegate. I think the proposal made by
Dr. Holloway is quite reasonable, and the proposal I made just
nowwas only to find a formula which would give satisfaction to
all the Delegations and not only to some of the Delegations.
V E/PC/T/TAC/PV/9
Therefore, if the Working Party takes into consideration
Mr. Holloway's proposal or any other similar proposal, it would
enable the larger part of the Delegations to return home once
the negotiations of a general character are completed, and once
they have completed their work, also, concening bilateral
negotiations. I fear that any other formula would have the
result of maintaining here for an indefinite period a large
number of people who would not be needed here once they had
completed their work in connection with their bilateral
negotiations.
CHAIRMAN: Perhaps it would enable, us to solve our
difficulties if the Tariff Negotiations Working Party, at its
next meeting, could consider this question in the light of the
suggestions made by Dr. Holloway and the Delegate of Chile, and
then we could issue a report on what we think might be the best
way of meeting the situation of those Delegations who will soon
be terminating their negotiations.
Is that suggestion acceptable?
H.E. Mr Wunsz KING ( China): May I add a word for the
information of the Tariff Negotiations Working Party? So
far as the Chinese Delegation is concerned, I think that you
will appreciate the very special practical difficulties with
which we have been faced. We have a limited number of tariff
experts. They have been away from China for almost half a year.
Their services are urgently .-ided at home, and on account of
the special difficulty of arranging transportation facilities, we
have to make arrangements at least four or five weeks ahead. As
the final date for the conclusion of tariff negotiations has been
fixed for 10th september, these experts have made their arrange-
ments for their return to China by the middle of this month.
Therefore, if by that time we are not able to finish all our
tariff negotiations, through no fault of our own, I am very much
afraid that we might have to continue our tariff negotiations
somewhere else - most likely in Shanghai
14 15
CHAIRMAN: Is the proposal to defer this matter to the
Tariff Negotiations Working Party to study the question, taking into
account the views expressed at this meeting, approved?
Approved.
The Tariff Negotiations Working Party will take into account the
remarks just made by the Delegate of China.
I should also like to make a proposal for speeding up our work,
that is, that we should endeavour to make a first run through of
the Draft Tariff Agreement as rapidly as possible, settling as
many points as we can. We may have to leave any points that give
rise to difficulties in abeyance to deal with when we come to the
second run through of the Tariff Agreement.
I would point out once more that the interpreters are only
available until the end of next week, and therefore it is most
importantthat we should make as rapid progress as possible.
DR. J.E. HOLLOWAY (South Africa): Mr. Chairman, on a point of
order, as Part II is a question of whether things are in or out, is
it your intention to take Part III before Part II?
CHAIRMAN: No, it is my intention to take up Part II after we
have finished with Part I, in order to determine which Articles
should or should not be included in Part II. I think that is the
only way in which we can consider Article XXVII, which relates to
the supersession of Part II by the Charter, after we have a better
idea of what will be in part II.
in the order
Therefore, I propose that we take the Articles /in which they
appear in the Draft Agreement and that we then take up the Protocol
and the Schedules.
E/PC/T/TAC/PV/9 J.
When we concluded yesterday, I announced that we would take up
paragraph 3 of Article I, to which the French and Czechoslovak
Delegations have submitted a revised draft. This is given in
document E/PC/T/W/317 of September 2nd.
I would ask either the French or Czechoslovak Delegation to
explain briefly the purposes of their amendment.
M. ROUX (France) (Interpretation): Mr. Chairman, the text
which you have now before you in document E/PC/T/W/317 is the
result of the collaboration between the Czechoslovak and French
Delegations - a collaboration which took place during a meeting,
because these two Delegations sit at the same end of the table
and therefore can maintain good neighbourly relations.
Our amendment is the result of very serious consideration of
document E/PC/T/189. We think that paragraph 3 which appears in
that document does not cover all the practical cases which derive
from preference margins. It seems to us that if document
E/PC/T/189 does not cover all the cases this is due to the fact
that the draft of Article I derives only from Article 16 of the
Charter and does not derive from Article 17, where various cases of
preferences appear after negotiations. The principle which ought
to guide us and which appears in the Charter is that no margin of
preference should be increased. Three cases appear in the draft
which we have before us now in document E/PC/T/l89, cases which
envisage a maximum margin of preference.
The first case is that in the tariff schedules, when the most-
favoured-nation rate is mentioned and the preference rate, and the
margin of preference between these two conventional rates is the
differentee. J. 17 E/PC/T/TAC /PV/9
The second case is when, in the tariff schedule, a most-favoured-
nation rate is provided for and no preference rate is mentioned.
the
Therefore, the margin of preference is/difference between the most-
favoured-nation rate and the preferential rate which was in force
on the 10th April 1947. This was the case which was used as an
example in the London Memorandum, when it was stated that the
margins of preferences should be reduced.
The third case appears when the most-favoured-nation rate is
frozen also, and then we also have a reference to the date of the
10th April 1947, but of course that date just happened to be chosen
and it could be any other date just as well.
We drew the attention of the Working Group, as appears in
document E/PC/T/153 on page 4, to the fact that the margin of
preference could in certain cases be fixed in the tariff schedules
when no rate appeared for the most-favoured-nation rate and when no
preference rate appeared in the tariff schedules. It was possible
to say, for instance, that a margin of preference should not be
greater than X per cent. That is why we took up that case in
document E/PC/T/W/287, which appears on page 2 of the English text.
Another case which was taken up by the Czechoslovak Delegation,
and which resulted in document E/PC/T/W/314, is the case where the
most-favoured-nation rate is not mentioned. I think that provision
should be made that in no case prior margins of preference should be
increased, and that resulted in the document E/PC/T/W/317 under
heading (iv), which reads:- "if the most-favoured-nation tariff
rate is not specified in the Tariff Schedules, the difference which
existed on 10 April 1947 between the most-favoured-nation tariff and
the preferential tariff". 18
J. TAC P 9 :~~~~~~~~~~~~~E/P / T/ DC;/JV/V
the
Therefore, we now have five cases instead of/three mentioned in
document E/fC/T/189, but it is possible that we have also forgotten
a certain number of aspects of this question, and I am mentioning
this because of what the Belgian Delegate said at one stage here.
Nevertheless, I think we ought to insert here - and we ought to
insert it in gold letters - that the negotiations should not lead
to the increase of margins of preference. This appears in
Article 17, and it ought to be, and is in fact, our guiding thread
to 'his Article.
M. R?.J SMICKLE (United Kingdom) Ir. Chairman, I have the
impression that this rather elaborate draft which is before us is
aeally a seW of rules for conducting negotintions. Iell,
surely.that is not the function of this Article at all. It is
simply to enshrine the rcz'l'.to of negotiations as they will have
emerged by the time that this document is signed.
Therefore, it seems to me that all this elaboration - or a good
. al of this elaboration - is not necessary>" My impression is
that one or two small verbal changes in the existingg text will
cover all we need. I do not think it is necessary to go into
these now, -but that is my impression - that a very small amount
of change would suffice. Thank you.
I- __ I- 19
S E/PC/T/TAC/PV/9
CHAIRMAN: The Delegate of the United States.
Mr. Winthrop G. BROWN (United States); Mr. Chairman, I
think we are all agreed that the purpose of this article is,
as the Delegate of the United Kingdom has said, to fix end
enshrine the results of the tariff negotiations and be sure that
they will take place. It is a very technical bit of drafting.
Could we not perhaps appoint a smaller group of technifna.. to
agree upon and present a draft to us, because it seems to me that
we can spend easily the whole of the rest of the afternoon in
this large group, trying to deal with a subject which is, in its
essence, a straight drafting job and a particularly technical
one at that.
CHAIRMAN. I think the Delegate of the United States has
just made a very sensible suggestion. I think we are all
aggeed as to what we want to say in this paragraph; the
difficulty is just to find the words with which to say it. It
is a complicated and technical problem and therefore, it could
best be dealt with by an ad hoc sub-committee. If that
proposal is approved, I will name an ad hoc subcommittee
The Delegate of China.
H.E. Mr. Wunsz KING (China): Mr. Chairman, without going
into the merits of this question, the Chinese Delegation would
like to point out that the joint text as shown in Document W/317
seems to be acceptable to us, because it serves to clear up
certain points in the original text which are otherwise not so
very clear.
I feel very much interested in what our French colleague
his told us. In the course of tariff negotiations which the
Chinese team has had with some of the other teams, we seemed to
be confronted with some difficulty in ascertaining what the 20
S E/ PC/ T/ TAC/ PV/3
preferential rates are. As to some of the negotiating teams,
the Chin se team felt very grateful to them for having made
known to us their preferential rates, but, as to several others,
I would like to point out that we have been somehow groping
in the dark. Therefore we should feel very grateful to those
Delegations which also have preferential tariffs if they would
be kind enough to make accessible to the Chinese team their
preferential tariffs and the rates, so as to speed up to some
extent the work of our tariff negotiations.
CHAIRMAN: Is the proposal to set up a drafting sub-
committee to consider this question approved?
The Delegate of Brazil.
Mr. R. ALMEIDA (Brazil): Mr. Chairman, I think the
French-Czechoslovak proposal is useful as an elaboration and
a clarification of the wording of Paragraph 3. I would accept
it, but I do not oppose its further examination by that group,
as the United States Delegate has proposed.
In respect of the margin of preference and vits
defination as the difference between the Most-Favoured-Nation
tariff and the preferential rate specified or indicated in the
tariff schedules,or existent on 10 April 1947 or on the base
dates indicated in Annex G, I wonder if it will not be wise to
put an explanatory footnote, setting forth that the difference
must be understood, unless otherwise indicated, as the percentage
relation between the Most-Favoured-Nation tariff and the
preferential tariff, not as the mere subtraction difference.
When I said "unless otherwise indicated," I meant the
margins which consist of an explicitdifference in percentage
ad valorem rates or an explicitspecific rate difference.
? - I- - S 21 E/PC/T/TAC/PV/9
CHAIRMAN: The Delegate of Cuba.
Mr. H.DORN (Cuba): Mr. Chairman, I am in agreement with
the proposal of the United States Delegate, to set up a small
Drafting sub-committee, and I wish only to draw attention to a
small drafting point which I think must be taken into account
when, considering the proposal, because there is a difference
made between the margin and the difference. If I make this
distinction under (a) I must make it under (b) too. Therefore
I would propose that a small committee take into account the
necessity to add, "for products not desribed in the Tariff
Schedules, the margin which existed on 10 April 1947, or the
difference existing on the same date, between the Most-Favoured-
Nation-tariff and the preferential tariff."
That is a question of formulation, but I wanted to draw
attention to this point.
CHAIRMAN: The Delegate of India.
Mr. B.N. ADAKAR (India): Mr. Chairman, I am in agreement
with the proposal to set up a small working group, but I would
like to draw the attention of the group to one drafting point
which I think is not taken care of either in the existing Paragraph
3 or in the draft submitted by the French and Czechoslovak
Delegations
Sub-Paragraph (a) (ii) in the draft submitted by the French
and Czechoslovak Delegations makes a situation in which no Most-
Favoured-Nation tariff is scheduled; neither the margin nor the
Most-Favoured-Nation tariff is scheduled, but only the
preferential rate. The situation is that only the maximum
margin is to be equal to the Most-Favoured-Nation tariff, and the 22
S E/PC/T/TAC/PV/9
scheduled preferential tariff, but if no difference is
scheduled then the margin remains practically unlimited, because
the Most-Favoured-Nation tariff is not related to any specific
date. It could be raised, so no limit is placed on the maximum
margin, because the Most-Favoured-Nation tariff referred to in
sub-paragraph (a)(ii) is not related to any date; the base
date occurs only in (iii) and (iv) and not in (ii)+
Some difficulty arises in the existing Paragraph 3, which
states in sub-paragraph (a) that "in respect of any product in
respect of which a preference is permitted under Paragraph 2
of this article, the margin of preference shall not exceed the
difference between the Most-Favoured-Nation tariff specified
and the preferential tariff in force on 10 April 1947," but
what happens if no Most-Favoured-Nation tariff is scheduled?
Is it to be assumed that the maximum margin in such case is
unlimited?
Either the Most-Favoured-Nation rate should be required
to be scheduled or, where no Most-Favoured-Nation rate is
scheduled in respect of the product appearing in the schedule,
the rate should be the one ruling on the date stated. 23
p. ~~~~~~~~ACPC/T/TlL/PV/9
CHAIRMAN: There appearg to be Feneral agreement that we
should refer this question to a Druftiom Scb-Curmittee who will be
able to take into account the various views which have been
expressed at this meeting.
With regard to the point just referred to ey the Dalegate of
Brazil, if I understood him correctly I think he suggested that
there should be some arrangement made for a percentage margin of
preference rather than the difference between the actual rates. If
my understanding is correct, the clear margin of preference has
come to be understood to be the difference between the preferential
rate and tha Most-FNvoured-Xation rate, by subtracting the one
from the other, and that is the basis on which negotiations have
been carried on at Geneva. So I fear it would be introducing an
element of confuaion if Et this stage we were to introduce
percentage rates as a means of introducing percentage ofrgins !
preference. No doubt the Drafting Committee can take into account
it
this point so that/can be made clear in the drafting of paragraph 3
and gn doinZ that they will no doubt take into account what has
been said by the Delegate of Brazil.
Aacordingly, I would name the following countries to
constitute this Ad Hoc Drafting Sub-Committee to examine the new
text for paragraph 3 of Article I: the representatives of Australia,
Czechoslovakia, France, the United Kingdom and the United states.
This Ad Hoc Drafting Sub-Committee should meet tomorrow morning at
10.30, should elect its own Chairman, and should submit a revised
text of the paragraph as soon as possible.
The Delegate of the Lebanon.
'M. MouAsAKMOB1R!Uo(Lebancn) (InttrpretabiMr): Ad. Chairman,
as Syria/Lebanon have preferences in force, I would wish if possible
that a representative of the Customs Union of Syria and the
Lebanon should sit on that Sub-Committee. 24
P. E/PC/T/TAC/PV/9
CHAIRMAN: We do not want the Drafting Sub-Committee to be
too large, but I am sure the Committee would have no objection to
a representative of Syria or the Lebanon being added to the Sub-
Committee.
Is the composition of the Sub-Committee as I have read it
out, with the addition of the Lebanon or Syria, approved?
Agreed.
yesterday
We dealt/with paragraphs 1 and 2 of Article II. We now come
to paragraph 3 of Article II. In Document E/PC/T/189; Corrigendum
2, is given a revised text of paragraph 3 which was revised by the
Secretariat in the light of the new text of Article 31 of the
Charter. Are there any comments on paragraph 3?
Mr. R.J. SHACKLE (United Kingdom): Mr. Chairman, I have two
minor corrections. Eleven lines from the bottom of the new
paragraph, after "stabilization arrangement" there should be a
comma instead of a semi-colon; and two lines below that, in the
phrase "agreement between countries", the word "the" should be
inserted. in front of "countries". Otherwise I have no observations.
CHAIRMAN: I take it that there is no objection to the small
drafting amendments just proposed by Mr. Shackle.
The Delegate of Czechoslovakia.
Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I would
like to state first that this paragraph 3 of Article II goes
further than the Charter itself and that is why we would suggest
deletion of the whole paragraph 3, for the following reasons:
It is meant only for the cases where the country negotiates
with another country tariff concessions. At that moment there is
no state monopoly. Now, after a certain time, two years, or three
years, or God knows when, the Government of that country - you never
know with Governments - decides to introduce a monopoly for the
- - - - I - 25
respective commodities. Then, if this monopoly is introduced and
nothing happens as to the functioning of the monopoly in relation
to foreign countries. there is no reason for having here some
special provision. Or the country finds it has to introduce, the
monopoly for some serious reasons; I suppose that these serious
reasons may be connected with a political crisis, because no doubt
no country would like to introduce a rmonopoly just for the Pleasure
of having monopolies but it is to follow certain politics. In
that case I think it would mean that the country receiving the
concession was somehow frastrated of the contempalated concession;
and in this case the country could come and claim, as provided in
paragraph h, that it is not receiving from the other country the
concessions as it understood at the moment of negotiations. In
this case both countries would have to sit round the table and
discuss anew, and if there is really a frastration, then there
should be some c. :. tory adjourment of the matter. As it
stands here it means that we are binding in future any internal
Price politics of a country
Then there are some !1]..j)'.' difficulties, for instance, that if
the monopoly would buy commodities from different sources, and
selling to one single price, it would be, as I understand, countrary.
to those provisions. So if, for a :: ustance, a monopoly Should buy
some commodity today and the price was 100, then in two monthe
this goes up to 200, in this case the monopoly would not be
allowed to raise the price to 300, which any , can do and is
Then there is no provisions, as there is in the Charter, for
other kinds of agreements, but only the price arrangements.
I had the honour to state once, I think in Sub-Committee that
in countries with planned economies the prices have an entirely
different function from in countries with free trade they are P . 26 E/PC/T/TAC/PV/9
a part of the whole economic and social structure of that country;
and I am afraid the Czechoslovakian Delegation would be unable to
agree to the provisions of this paragraph 3 of Article II.
CHAIRMAN: The Delegate of the United States.
Mr. John W. EVANS (United States): Mr. Chairman, I have a
feeling that Dr. Augenthaler has put the worst light on the
possible difficulties that might arise in the application of this
Article. I wonder if he has given special consideration to other
provisions which I think would permit the hypothetical country he
described to operate its emergency price stabilisation scheme
without interference from this Article, if an emergency should arise
of the kind he has described. I should like to call attention to
the wording which appears on page 23 of document E/PC/T/189,
paragraph 3 of Article X, which now reads:
"Throughout articles X, XI, XII, and XIII the terms 'import
restrictions' or 'export restrictions' include restrictions
made effective through state-trading operations".
Now I submit that one of the purposes for that wording in the
original Charter and also in this document was to permit a country
which operated its foreign trade through a state-trading
organization to use all of the devices which are permitted to
countries not using state-trading enterprises under the various
exceptions to the Quantitative Restrictions Order. I have a
feeling that the study of that will show that the difficulties are
not nearly so serious as Dr. Augenthaler has suggested.
Now, without further comment on the merits of the point, I do
want to take issue with Dr. Augenthaler's statement that this
Article as nowdrafted goes further than the wording of the Charter.
I was prepared to ask for the floor to complain that it does not
go quite as far: and that, I think, is true in two particular
respects. E/PC/T/TAC/PV/9
The first has probably already been noticed by most members
of the Committee. In the first line of the draft the qualification
appears "after the day of signature of this Agreement" ; in other
words the Article applies only to a monopoly which was established
after the Agreement, even though an existing monopoly might
subsequently take actions which would in effect nullify the value
of the tariff concession negotiated. Now that wording was
clearly avoided in the Draft Charter itself and I think it should
be avoided here. I should like to propose the deletion of the
words "after the day of signature of this Agreement".
The second respect in which this Article does not go as far as
Article 30* of the Charter is thet Article 30* of the Charter
provides rules covering the case of protective margin through the
operation of a state-trading monopoly where no rate has been
negotiated. In other words, Article 30* in the Charter has a
provision which is comparable to at least the implied obligation
elsewhere in the Charter that tariff rates must be published, must
be known and made public. That provision then relates the
operation of the state-trading monopoly to the provisions elsewhere
in the Charter, by requiring that the degree of protection afforded
shall not exceed the degree of protection in the declared import
duty.
Now we have considered suggesting that this Article be revised
so as to parallel the Article of the Charter in that respect, but I
am not sure that it is necessary in this document and we are not
disposed to press that point: but we do consider it very important
to make the first correction which I have suggested.
* Corrected to Article 31 in following speech (see next page)
P.
27 28 E/PC /T/TAC/PV/ 9
Mr. John W. EVANS (United States) (after interpretation):
I should like to make two corrections in my own remarks. The
first one is a very minor one: I referred to "Article 30", when
I should have referred to Article 31. The other correction is
much more substantive. I had not noticed - Mr. Shackle has
kindly pointed it out to me - that the wording which appeared
in document T/189 was changed in the second line and the word
"maintains" was inserted. I think that that takes care of my
point and would make unnecessary the deletion of the words "after
the day of signature of this Agreement", though I am not quite
clear what is accomplished by the words "the day after the
signature of this Agreement".
CHAIRMAN: The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, I must admit that
when the Norwegian Delegation first considered the original draft
of the Tariff Negotiations Working Party, we did not discover
more than two points on which we would like amendments to
paragraph 3; but we have studied this paragraph further, and
we feel grave doubts as to the advisability of having it
included in Article II at all.
The reasons are, to a certain extent, the same as those
explained by the Delegate of Czechoslovakia; but there are also
other reasons. I think the casiest starting-point to explain
our position is this: Article 31 of the Charter says: "If any
Member establishes, maintains or authorizes..- a monopoly....
such Member shall....negotiate... .with the object of achieving:"
and then states in '"(b): " in the case of an import monopoly,
arrangements designed to limit or reduce any protection..."
V E/PC/T/TAC/PV/9
Then in paragraph 2 of Article 31, it is 31, "In ..:rdci to
satisfy the requirements of sub-paragraph 1(b) of this Article,
the Member maintaining a monopoly shall negotiate (a) for the
establishment of the maximum import duty...." or "(b) for any
other mutually satisfactory arrangement ...".
Now, the paragraph here really goes farther than that. The
paragraph should, in our view, only refer to the negotiations
which have taken place now between Member countries having
monopolies in existence, and countries which are interested in
having either a price margin fixed or any other mutually
satisfactory arrangement. But if a monopoly has not been
established and is, in fact, not functioning now in one particular
country - for example, Norway, then, of course, we have not
conducted our negotiations here on the assumption that if we in
future establish an import monopoly the maximum duty which we
might have fixed on a particular commodity is fixed once and
for all, and that consequently we will not be able to alter that.
We have only negotiated on the assumption that insofar as
we have monopolies now -for example, wheat or grain monopoly,
those margins which the monopoly set out to use on the sale of
wheat and other grain,are v und by Agreements reached during
the tariff negotiations we have conducted here. But if we
introduce this paragraph here, one goes much farther than that.
One dees, in fact, limit to a certain extent -perhaps to a very
large extent- the freedom or action of a Member country, if in
future it decides to establish a monopoly.
If a country establishes a monopoly in future, then Article
31 says that in that case that Member is under an obligation
to negotiate with the objects either of fixing a maximum import
duty or else making any other mutually satisfactory arrangement.
V
29 30
V E/PC /T/TAC/PV/9
Now, if we maintain this paragraph 3 in the present form, it
also has two other disadvantages as far as we can see. Firstly,
paragraph 5 of Article 31, which refers to the point that "due
regard shall be had for the fact that some monopolies are
established and operated mainly for social, cultural, humanitarian
or revenue purposes" is not included at all. Secondly, this
paragraph 3, as it is drafted, does not include paragraph 2(b) of
Article 31, concerning the possibility of arranging other mutually
satisfactory arrangements. It refers only to a price margin.
Consequently, we feel that the whole paragraph is very doubtful
indeed, sand the result is that the General Agreement as it is now
does not include even in Part II the full text of Article 31,
because Article 31 in the Charter is not included in Part II -
we have only taken out part of Article 31 and included it in
paragraph 3 of Article II. Our proposal would be that we delete
paragraph 3 of Article II and include the whole of Article 31 in
Part II, together, of course, with Article 30 of the Charter,
which is already included in Part II of the General Agreement. 31
J. E/PC/T/TAC/PV/9
M. ROYER (France) (Interpretations: Mr. Chairman, the text
of the General Agreement which we first had provided for certain
guarantees in view of the possible establishment of certain
monopolies. The fact chat some monopolies could be established
should not allow certain countries to increase the margin of
protection of their industries. Nevertheless, we have been
struck by the arguments which have been put forward by the
Czechoslovak and Norwegian Delegates. Their arguments tend to
point out that there is a difference between the countries which
will now adhere to the Agreement and countries which might adhere
in the future, because the countries which might adhere to the
Agreement in the future will have time to set up new monopolies for
adhering to the Agreement. Therefore, they will reserve their
right to negotiate with the country the margin of protection before
joining in the Agreement. But the countries which now adhere to
the Agreement will be deprived of that right.
Therefore, we do not think that we should include in Part II
only a part of article 31, but the whole of Article 31. We could
invert it in a more consise form stating, in so many words, that in
the case of the establishment of monopolies, at the request of
interested countries, a substantial amount of trade negotiation
will take place under the rules set forth in Article 31.
Now, the second idea which I am coming to is that we do not
think that it would be necessary to specify a definite obligation
for existing monopolies. We have no objection to the principle,
but it would be difficult for us to accept this principle now owing
to certain difficulties which exist in our case. But, going
further, I wonder if there is any need at all to specify special
rules for existing monopolies, because we can have either of the J. E/PC/T/TAC/PV/9
cases if the commitments have already been taken by the Delegations
in the name of existing monopolies - and it is possible that these
commitments will differ from the commitments specified in
paragraph 3. As the Norwegian Delegate quite rightly pointed out,
for instance, the commitments will be not to impose maximum import
duty, but the quota of the global purchase made by the monopoly, will
be such in specified cases. Therefore, if we also added to this
the rules of paragraph 3, this would duplicate in a way the
commitments undertaken by the monopolies.
There is another difficulty regarding fiscal monopolies,
Although I do not agree with the form in which the question of
fiscal monopolies is coached in paragraph 6 of Article 31,
nevertheless, I think that this paragraph ought to be inserted.
I will not stress this point now, but I would like to state that
there are three elements to calculate the prices here, and I think
that the text which we have before us does not make this idea very
clear, and there is something rather doubtful in the conclusion to
which one can come.
The elements to calculate the prices are the c.a.f. price, the
maximum rate of import duty and such charges as transport or
internal taxation. If, for the first, we take a price of a
hundred, for example, and if we add to this the maximum rate of
import duty, that is, forty, we should have a price of 140, but I
wonder if, under paragraph 3, it would not be possible to add also
-transport fees and internal taxes and other such charges, thus
arriving at the price of 200. I think that the Committee will
agree on the second solution, that is to say, to have a prize of a
hundred only plus forty, but this seems to me rather doubtful if we E/PC/T/TAC/PV/9
look at the terms of paragraph 3.
Now, as regards the question of customs duties, in the case of
fiscal monopolies, in many cases the customs duties do not amount to
much, but if the text here were to be adopted then in certain cases
one would have to increase the rate of customs duties on such items
or to establish a special internal tax before the sale of such
goods.
To summarise what I have just said, Mr. Chairman, I adhere to
the proposal which was made by the Norwegian Delegate and I think
it would be better not to discuss at all the existing monopolies
here and to insert, as I have stated, Article 31 as a whole and,
in the case of new monopolies being created, to mention the
obligation which the country would have to undertake to negotiate
in the case of the establishment of new monopolies.
CHAIRMAN: The Delegate of the United Kingdom.
MR. R.J. SHACKLE (United Kingdom) Mr. Chairman, I cannot help
thinking that this Article is not intended to lay down all the
rules which will govern state trading monopolies. Its function
is to attach certain results which have already come out of the
negotiations. In paragraph 1, it attaches the results of the
tariff negotiations and the tariff schedules.
This paragraph 3 is meant simply to attach in the same way the
results that will have already come out of the negotiations where
state trading monopolies are involved. That is the whole
purpose of this paragraph, and it follows from that, I think, that
all we have to do is to make sure that those cases where arrangements,
whether they be maximum import duties or other arrangements, have
J . 34
J. E/PC/T/TAC/PV/9
been negotiated here are duly picked up and attached. That seems
to me to limit very much the scope of what we have to do, and I
think that the criticismsmade by Dr. Augenthaler, for example, are
largely not criticisms of this Article but of Article 31 ofthe
Charter, which does not allow for sufficient stabilization policy.
I would be prepared to argue that, but I think that this is not the
place to do so, because that is not the purpose of this Article.
I think there is perhaps one type of case and only one which is
not conditionally covered here, that is, the case where a monopoly
is set up after the Agreement has come into force and import duty
has been negotiated already, but there may be some reason why it
would not be appropriate for that particular monopoly to just pick
up the import duty and apply it in the way in which this paragraph
indicates. It would be very rare, but there might conceivably
be such cases, and I think it may be necessary to make some
additional paragraph to cover the case where the nature of the new
monopoly is such that it is inappropriate to pick up the import
duty already negotiated. We may need to make some provision
whereby there should be some new negotiation so that an arrangement
of a different type can be made in the place of the import duty,
previously operating. My impression is that that is the sole case
we need to provide for which is not covered here.
As regards the special provisions which occur in article 31
for fiscal and other monopolies, that, as I conceive it, is a rule
that due regard is to be paid to the nature of those monopolies when
they are negotiating with them. It is not a question of what you
do afterwards. As I have said before, all we are here to do is
simply to pick up and attach the results of the negotiations that
have taken place. 35
J. E/PC/T/TAC/PV/5
I am inclined to think, as regards the question of procedure,
that this is probably another case for a small working group which
would have to be employed to deal with it. My impreassion is
that the area of necessary change is quite small. Thank you.
M. J.P.D. JOHNSEN (New Zealand): Mr. Chairman, I think we
would all agree with the Delegate of the United Kingdom that this
Article is intended to cover. the cases where a rate has already
been negotiated, and then it might subsequently be brought within
a monopoly. In other words, it is a matter of attaching cases of
that nature.
I think that what we have to consider, however, is whether it is
necessary to make any special provisions such as this, having regard
to the other provisions in the Agreement to safeguard a Member's
interests, and also whether this particular provision imposes
conditions on a Member more onerous than those provided for in the
Charter. On listening to the very lucid explanation given by the
Delegate for Norway, one comes to the conclusion that this particular
paragraph is rather more onerous than the provisions of the Charter.
For instance, in paragraph 2 of article 31 there is the provision
for a monopoly to negotiate for maximum import duties, and also,
*where such negotiations are not possible on the basis of duty, then
they could make some other satisfactory arrangement, but there does
not appear to be any provision in this paragraph to cover such a
situation.
I do not think that it was contemplated that we should put into
the Agreement more onerous conditions than those provided for in
the Charter. Paragraph 4 of Article 2 in the Agreement provides,
as the Delegate for Czechoslovakia mentioned, that if any contracting
party considers that a product is not receiving from another
contracting party the treatment which the first contracting party
believes to be contemplated by a concession, they can take up the
matter with a view to coming to some arrangement. S 36 E/PC/T/TAC/PV/9
Apart from that, of course, there is always the
opportunity for consultation on such matters.
It seems to me that the suggestion which has been made
by the Delegate of Norway, and supported by the Delegate of France,
is quite a reasonable one in the circumstances; that is, that the
whole of Article 31 be inserted in Part II of the Charter, I
would be inclined to agree with that suggestion.
CHAIRMAN: The Delegate of the United States.
Mr. John W. EVANS (United States): Mr. Chairman, I am
not convinced that this Particle is more onerous than Article 31
of the Charter. My Delegation would have no objection at all to
taking up Article 31 of the Charter verbatim, except our desire
to see a chronological document. It just does not seem to us
any more appropriate to pick up the entire text or Article 31
then the entire text of, let us say, article 17.
In spite of that, I do feel there are improvements that
could be made in this Article; there are changes which could
be made to make it very clear that it is not intended to be
more onerous than the terms or Article 31. For that reason, I
should like to agree with Mr. Shackle on his proposal.
I do want to make one more specific comment. Paragraph 4
of Article II has been referred to by the Delegate or New Zealand
as perhaps making unnecesary Article III. I do not think it
would take care of the case for two reasons. In the first place,
as I understand Paragraph 4, it was written in contemplation of
changes in tariff nomenclature - problems having to do with the
interpretation of a very specific agreement that has been reached
and not to do with the nullification by an unrelated action of a S 37 E/PC/T/TAC/PV/9
tariff concession that has been negotiated. I do not think
it is worded in such a way as to take care of the former. I
think a more specific wording is required than the general
language of Paragraph 4,
CHAIRMAN: The Delegate of the United Kingdom.
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman, may
I make o, small suggestion about the Working Group. It seems
to me it is desirable to have rather limited terms of reference
for it, in order to avoid straying into other fields. I
would suggest that these terms of reference should be to
devise a means of attaching the results of negotiations to
State-trading monopolies corresponding to the provisions
attaching to the results of tariff negotiations. That, it
seems to me, is the whole job of the Working Group, and they
should go no farther than that.
CHAIRMAN: It is clear to the Chair that there is a
difference of opinion in the Committee on this particular
paragraph of particle II. Therefore I think the suggestion made
by Mr. Shackle, and seconded by the United States Delegate -
and also approved by other Delegations - that an ad hoc
Working Group be set up to study this question, is the most
sensible one if we are to make progress.
Mr. Shackle has proposed that the terms of reference of
this ad hoc Working Party should be confined to the following:
to devise a means of incorporating the results of the
negotiations pursuant to Article 31 of the Charter.
The Delegate of Syria. S E/PC/T/TAC/PV/9
M. Hassan JABBARA (Syria) (Interpretation): Mr.
Chairman, as far as we are concerned, we see no objection to
adopting either Article 31 or the draft which appears s in
Corrigendum 2, or the initial draft which was presented to
us, but there is something which I do not see. When a
State establishes a monopoly it is not for the sole pleasure
of establishing such monopoly but to raise taxes, and those
taxes are essentially internal taxes. Therefore, if a
monopolized item appears on the Schedules, and if the duty
pertaining to such item has been frozen, then no higher
duty will be perceived on such rnonopolized items, Nevertheless,
this will not prevent the Government from raising an internal
is
tax on such item once it is imported. This /in accordance with
its needs and the needs of the moment.
If the Article which we are adopting here does not prevent
this possibility for an interested Government, we have no
objection to adopting one or other of the drafts which are now
before us.
CHAIRMAN: The Delegate of the United States.
Mr. EVANS (United States): Mr. Chairman, if I may answer
that question, I think the draft of Article 31, and also of
the article under discussion, fully takes cars of that point,
because among the expenses which you are permitted to use in
determining the differential between the import price and the
retail price are taxes.
May I make one other comment on Mr. Shackle's suggestion
for limiting the terms of reference of the ad hoc sub-committee.
I think such a limitation is desirable. I think it is essential
that we should not stray off into the fields which were explored
at great length in the sub-committee which discussed article I. 39
S E/PC/T/TAC/PV/9
But I do not think Mr. Shackle's proposed terms of
reference quite cover all the necessary cases. From their
inception, the State-trading Articles have included not only
provisions for the negotiation of the margin of preference
afforded by State-trading, monopolies but also provisions for
protecting the tariff concessions which may have been negotiated
against nullification through the creation of a subsequent State-
trading monopoly and the erection by that State-trading monopoly
of other tariff barricrs.
Therefore I think Mr. Shackle's proposed terms of reference
need to be expanded to include the provision of protection of
negotiated tariffs which may have been negotiated, not with a
country maintaining a State-trading monopoly at the time; that
is, to cover the case where there was a negotiation of a
tariff and the subsequent creation of a State-trading monopoly
which erected barriers in addition to the tariff barriers on
which the negotiations were based.
CHAIRMAN: Would the following text for the terms of
reference cover the point which has just been raised by Mr. Evans:
that the terms of reference of the ad hoc sub-committee should be
"to devise a means of incorporating the results of 40
S E/PC/T/TAC/PV/ 9
negotiations pursuant to Article 31 of the Charter and of
protecting negotiated tariff concessions from the effects of the
creation of a State-trading monopoly"?
The Delegate of Czechoslovakia.
H.E. Mr. Ze AUGENTHALER (Czechoslovakia); Mr. Chairman,
I have no objection against these terms of reference, but I Would
like to have added something to them; that is, that the protection
of those concessions should be in no way greater than it is in
cases of nullification of the effects of tariff concessions by
measures like changing the method of determining the value, and
other measures of this kind. I do not see why the State-trading
monopolies should be treated in different way then nullification
of tariff concessions by other means, such as internal taxation,
and I do not know what other measures. 41
P E/PC/T/TAC/PV/9
Mr. R. J. SHACKLE (United Kingdom): Mr. Chairman, I should
just like to say that I should be very glad to accept
Dr. Augenthaler's addition to the terms of reference. I agree
with him completely. I wonder whether it would not be covered
if we made the last part of the terms of reference read like this: -
We start off by saying:
"To devise a means of incorporating the results of
negotiations pursuant to Article 31 of the Charter .."
and go on like this: -
and of providing for cases where tariff
concessions already negotiated are liable to be
affected by the establishment of a state-trading
monopoly."
I think that would cover the point.
CHAIRMAN: Does that meet the point that was mentioned
by Dr. Augenthaler?
Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I am
afraid not,
CHAIRMAN: I would like to direct the attention of
Dr. Augenthaler to paragraph 2 of Article II, which does deal
with determining dutiable value. Then we have Article III which
deals with national treatment on internal taxation and regulation,
and we have Article VI which deals with valuation for customs
purposes. So it can be seen that these points are covered,
if not in Article II, then in other Articles of the Agreement.
Dr. Augenthaler.
Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman, I want
only to make one point: that is whether we need at all this P 42 E/PC/T/TAC/PV/9
point 3 here.
CHAIRMAN: I wonder if we could not leave it to the Working
group to make these terms of reference to cover that point;
and if they think it not necessary to cover it, that should be
sufficient.
Mr. R. J. SHACKLE (United Kingdom) Mr. Chairman, so far
as the terms of reference are concerned, surely the words I have
suggested are most studiedly neutral. I say "... providing
for cases..." Would Dr. Augenthaler say there is no need to
make any provision for a case where a tariff concession has
led to a binding and then a state-trading monopoly is set up?
Is there no need to make any provision for that case at all?
I should think that there is. I have not prejudged what the
effect would be. I have merely said "liable to be affected".
I should have thought the wording I suggested was so colourless
and so neutral that it was bound to be all right.
CHAIRMAN: The proposal is to set up an Ad Hoc Working
Group with the following terms of reference: -
"To devise means of incorporating the result of
negotiations pursuant to Article 31 of the Charter and
of providing for cases where tariff concessions already
negotiated are liable to be affected by the creation of
a state-trading monopoly."
Is that agreed?
Approved.
I would like to name the following delegations to
constitute the Ad Hoc Working Group: Canada, Czechoslovakia,
France, Norway, United Kingdom and the United States.
This Working Group will meet tomorrow at 10.30 and will P 43 E/PC/T/TAC/PV/9
elect its own Chairman, and will make its report to the
Committee as soon as possible.
Is that agreed?
Approved.
I would now like to call the attention of the Committee
to a proposal of the Norwegian Delegation on page 2 of
document E/PC/T/W/312. The Norwegian Delegation proposes
that the following sentence should be added to the end of
that paragraph, paragraph 3: -
"Due regard shall be had to the fact that some
monopolies are established and operated mainly r..r
social, cultural, humanitarian or revenue purposes."
Would it be sufficient to leave this to the Working Group to
deal with this amendment, or would any member of the Committee
like to comment upon this proposal?
The Delegate of Norway.
Mr. J. MELANDER (Norway): Mr. Chairman, I would be
quite content to leave that to the Working Group.
CHAIRMAN: Is that agreed?
We can now leave paragraph 3 and pass on to paragraph 4.
The only comment we have on paragraph 4 is given on page 2 of
document E/PC/T/W/312:-
"The Norwegian Delegation questions whether this paragraph
should not contain a provision to the effect that the
contracting parties should, as soon as possible, bring
their legislation into line with the obligations
undertaken."
The Delegate of Norway. P 44 E/PC/T/TAC/PV/9
Mr. J. MELANDER (Norway): Mr. Chairman, we do not feel
very strongly on this point at all The reason vie have raised
it is that we feel that if a Treaty has been concluded and
accepted by the parties, surely the principle ought to be that
they shall have to bring their legislation into conformity with
that Treaty. The solution here is rather the opposite -
namely, to amend the Treaty. adjust the concessions.
We do not feel very strongly about it, as I say, and
the reason we have raised the point is that we would like to
know what reasons there are for suggesting this particular
proposal.
CHAIRMAN: Mr. Brown.
Mr. Winthrop BROWN (U.S.A.): Mr. Chairman, this provision
is intended to take care of the occasional case which crops up
that, after the Trade Agreement has been entered into, there
is a judicial decision that the classification which the parties
negotiating the Agreement applied to a particular article did not
in fact apply to it, and that they were wrong in the assumption
on which they entered into the Agreement. It ws as felt only
proper that in that case, if one of the contracting parties found
that, although the matter had been negotiated in good faith, he
did not in fact get what he thought he was getting, he should
be entitled to make the corresponding adjustment in what he gave.
The situation usually arises in the case of one item, at
infrequent intervals, and it is then very difficult for the
country where such a decision takes place to correct the matter
legislatively, because it would often have the effect that the
whole question of the operation of the tariff rates affecting P 45 E/PC/T/TAC/PV/9
the Agreement would be thrown into the legislature and a great
deal more difficulty and inconvenience would ensue than by
correcting it in this manner. I think that was the reason for
making this provision.
CHAIRMAN: Does that explanation meet the point raised
by the Norwegian Delegate?
Mr. J. MELANDER (Norway): Yes, Mr. Chairman.
CHAIRMAN: Are there any other comments on paragraph 4
Then I take it that paragraph 4 is approved.
It is now six o'clock and therefore too late for us to
take up Part II, so we will now adjourn, and meet tomorrow at
2.30 p.m. in the same room.
The meeting is adjourned,
(The Meeting rose, 6 p.m.) |
GATT Library | gb944dk3796 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report of Corrigendum to Eighth Meeting of Commission A (Document E/PC/T/A/PV/8) | United Nations Economic and Social Council, June 12, 1947 | United Nations. Economic and Social Council | 12/06/1947 | official documents | E/PC/T/A/PV/8.Corr.6* and E/PC/T/A/PV.8-11 | https://exhibits.stanford.edu/gatt/catalog/gb944dk3796 | gb944dk3796_90240082.xml | GATT_155 | 126 | 922 | UNITED NATIONS NATIONS UNIES RESTRICTEDNTIS
ECONOMIC CONSEIL RESTRICT3.
AND ECONOMIQ8.UE E/PC/T/A/PV/ Corr.6*
SOCIAL COUNCIL ET SO9CIAL 12 June 147
ENGLISH ONLY _
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITEDADE KMTIONMS T'ONFERENCE ON TRREILO5~N
VERBATI1REPORT OF
CORRIGENDUM TMO EIGHTH MEETING OF COMISSION A
!"Document E/PC/T/A/PV/8)
The following corrections should be made in the
statements made by the Chairman (H.E.Erik Colban):
Paz 25, fourth paragraph, first line:
The Word "four" should be deleted.
Paz 40, ninth line:
The word "need" should be deleted and the
words "meet with" should be inserted in its place. In
the same line, the word "from" should be deleted and the
word "in" should be used instead.
* Corrigenda 4 and 5 'were issued in French only.
lED aN1TI~ON'S
TIONS UNIES |
GATT Library | wx725pm4556 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Second Meeting held on Friday, 11 April 1947 at 10.30 a.m. in the Palais Des Nations, Geneva | United Nations Economic and Social Council, April 11, 1947 | United Nations. Economic and Social Council | 11/04/1947 | official documents | E/PC/T/PV2/2 and E/PC/T/PV2/1-3/CORR.1 | https://exhibits.stanford.edu/gatt/catalog/wx725pm4556 | wx725pm4556_90260189.xml | GATT_155 | 5,410 | 33,889 | UNITED NATIONS
ECONOMIC
.;AND
SOCIAL COUNCIL
SECOND SE
OF TEE UNITED
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
E/PC/T/PV2 /2
SSIONHOF TEE PREPARATORY COMMITTEE
PATIONS CONFERENCE ON TRADE AND YMPELONEMNT
VBATIM REPORT
SECOMD BEETING
HELD ON FRIDAY, 11th APRIL, 1947
At 10.30 A.I. N THE PALAIS DES NANS,IOt GENEVA.
; E/PC/T/PV.2/2
CHAIRMAN: (Interpretation): The meeting is called to order. We
shall now continue with the list of speakers and the general debate.
The first speaker on my list is the first delegate of Canada.
HON. L.D. WILGRESS: (Canada): Mr. Chairman, we are gathered
together in Geneva for the second session of the Preparatory
Committee of the United Nations conference on Trade and Employment
A great responsibility has been placed upon the seventeen countries
represented here and, like all the other delegations, the Canadians
intend to play their part in making the second session a success.
It is fitting that we should be holding this conference
in Switzerland, a country that has contributed so much to the
cause of peace. Before the war Switzerland always worked among
the first half dozen countries with the highest volume of trade
per capita. Liberty and a high standard of living for the
individual are combined. Here diverse racial groups have
contributed their best qualities in a successful co-operative
effort which we all might emulate, and it seems all together fitting
that we should be meeting in this beautiful country to put the
finishing touches to a Charter on International Trade.
The Canadian delegation, Mr. Chairman, is gratified that
at this second session we shall continue to have the benefit of
your long experience and your unfailing tact which contributes
so much to the success achieved at the first session. We combine
great encouragement in the large measure of success that has been
achieved so far. I have been reading over the opening and closing
statements made on the occasion of the first session held in London
towards the close of the last year. I have been impressed by
the spirit of optimism revealed in the opening statements and by
the general note of satisfaction on which the session terminated.
~~~ i. -I- E/PC/T/PV.2/2
This satisfaction was fully justified. The delegations
represented on the Preparatory Committee approached the problems
contronting them in a spirit of compromise and good will. All
points of view expressed were carefully considered and discussed.
The task had been facilitated greatly by the commendable. initiative
of the United States government in drawing up the draft of a
Charter as a basis for discussion, but the draft Charter that
emerged from the deliberations of the first session represented a
considerable advance along the road to the realization of an
International Trade organization. It embodied a substantial
measure of agreement among all the Members of the Preparatory
Committee. It incorporated many of the ideas evolved out of the
discussions at the first session and provided for the solution of
problems that at one time appeared difficult of solution.
Since the meeting in London the work has been carried
further along the road to success by the admirable work of the
Drafting Committee which met in New York during the winter. They
have put refinements to what was done in London and have even gone
some distance to fill in some of the gaps that could not be
attended to in London. They have brought us up to the final stage
in the work of the Preparatory Committee upon which we are now to
embark.
This stage will not be an easy one. There are further
obstacles ahead just as there have been obstacles to be surmounted
on the road we have traversed so far. The Canadian delegation is
confident that these obstacles too will be surmounted successfully
if we continue to apply to our tasks the same determination and the
the same spirit of compromise and good will that have characterized
the proceedings of this Preparatory Committee up to now.
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E/PC/T/PV. 2/2
At this session we shall have to embark upon the
laborious task of negotiating mutually advantageous tariff
concessions. This will be the first occasion upon which a
multilateral trade agreement has been attempted on this scale.
The very magnititude and unique character of our task demand vision,
patience, and continuous co-operation but also should provide the
incentive to an achievement that will be of lasting value. It is in
this spirit that the Canadian delegation proposes to enter into this
phase of the proceedings of the second session a phase that may
not be spectacular in its character but will involve much detailed
and painstaking work.
In considering the granting of tariff concessions we must
not overlook the restrictive character of some forms of customs
regulations. A reduction in a rate of duty would be of little
practical significance if too great latitude was still left with
the customs administration of the importing country to impose
restrictive regulations on the importation of the goods in question.
Let us, therefore, direct our attention to the liberalization of
customs procedure at the same time as we are discussing concessions
in respect of rates of duty.
Besides bringing about a multilateral trade agrement
this second session of the Preparatory Committee has to complete the
drafting of the Charter for the International Trade Organization and
to prepare the ground for the holding of an international conference.
This conference of all the United Nations, we hope will, confirm all
that the Preparatory Committee has done and is about to do at this
Second session. That will be the last stage on the road to bringing
into being the international Trade Organization.
It is difficult to exaggerate the importance to the world
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t I ~~~~~~~~~~~~~~~i E/PC/T/PV*2/2
of such an organization. It will play its part in the field of
trade comparable to that played by other specialized agencies of
the United Nations in other branches of international economic
co-operation. It is indeed the keystone of the arch of
international economic co-operation without which the two bases -
the International Monetary Fund and the International Bank for
Reconstruction and Development - would be left incomplete and
unable to fulfil effectively the functions for which they were
established. We have only to think how valuable it would have
been if we had had an organization of this kind established when
the economic blizzard struck us nearly two decades ago. Since
then the war has brought further complications into the whole basis
of international economic relations. If trade is to function with
smoothness in the future it is essential that there should be a
body through which international co-operation can be effective
If this is not the case the attainment of higher standards of living
for the individual is impossible.
Never before have the problems of international economic
co-operation been approached in such a comprehensive manner. The
attempt to find solutions on a piece-meal basis has been one of the
reasons for failure in the past. The achievement of an expanding
volume of trade and rising standards of life throughout the world
call for effective international co-operation in respect of each of
the important phases of economic policy concerning employment,
economic development, commodity arrangements, restrictive business
practices, state trading, customs administrations, as well as the
level of the more direct barriers to trade. One of our principal
tasks will be to maintain the consistent purpose throughout this
wide and complex field of international collaboration. While we
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I |~~~~~~~~~~~~~~~~~~~~~~~~~~~~ E/PC/T/PV/2/2
should, as far as possible, seek to accommodate the differing
situations and the legitimate aspirations and needs of the various
nations of the world, we must not, on the other hand, resort to
expedients and indulge in incompatibilities which would destroy
our general objective.
No country in the world has a more vital interest in the
success of our deliberations than Canada. We have been blessed by
nature with an abundance of natural resources which the industry and
skill of our people have developed to create surpluses of which the
whole world stands in need. From our prairies, our mines, and our
forests, from our farm lands, our orchards, our fisheries and our
factories we are producing commodities far beyond our own
requirements which we desire to exchange for the products of other
countries. It is only through the co-operation of other countries
that we can assure our people of a better way of life by exchanging
our surplus products for those surplus to other lands. In this
way also we can make our contribution to a better way of life for
the people of these lands.
Canada has stood for the fullest possible.co-operation
between nations to assure the maintenance of international peace and
security. Co-operation in the political sphere would be of little
avail if there is not at the same time economic. co-operation between
nations. We, therefore, look upon what we are doing here as the
culmination of a whole series of efforts that have been made since
the signing of the Atlantic Charter to give full effect to the
principles enunciated in that Charter.
All forms of co-operation between nations conflict to
some degree with sovereignty. This is so whenever any two countries
conclude any sort of agreement with one another.
-6- Cl E/PC/T/PV2/2
The world is becoming smaller as new forms of transport are
developed, and each decade increases the complications in inter-
national relations. This situation necessitates co-operation
among nations and there is no field in which that co-operation
is more essential than in that of trade. There must therefore
be a spirit of give and take and a mutual readiness to accept
sacrifices to the degree necessary to achieve that measure of
co-operation among nations that is required for the good of all
nations. It is with these thoughts in mind that the Canadian
Delegation is anxious to make its full contribution towards the
success of this Conference. This is the unequivocal mandate
which we have received from our Government.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. D.1
E/PC/T/PV. 2/2
CHAIRMAN (Interpretation) I call upon the first Delegate for
China.
H.E. Dr. WUNSZ KING (China): Ladies and Gentlemen, after a recess
of six months we meet here to-day in Geneva for the purpose of
completing the Draft Charter of which certain provisions have
been agreed upon. In addition to this important and difficult
task, we are also to start multilateral negotiations on tariff
reductions and a discussion of related matters so as to implement
one of the principles embodied in the Charter. Never before
has such an attempt been made on such a scale, although suggestions
of multilateral negotiations for tariff matters were made at the
international conferences after the first world war. Inregard
to this aspect of our work, some people would like to lay
emphasis on the importance of bringing about a general state of
economic stability prior to making any attempt at the lowering of
tariff walls, while others tend to take a different view.
Mindful of the disasterous consequences in the economic field
during the decade following the termination of World War No. 1, they
feel that no time should be lost in endeavouring to make the
necessary tariff arrangements which would in turn, it is hoped,
help to put right economic chaos and dislocations caused by the war.
The Chinese delegation attaches equal importance to
tariff negotiations and the drafting of the Charter as a whole,
but if our delegation feels able to associate itself with the new
school of thought by which tariff disarmament, if I may be permitted
to coin this new term, should. precede the stabilisation of general
economic conditions, it is only because we believe that the new
experiment will be made on no less than three assumptions.
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E/PC/T/PV. 2/2.
In the first place it is to be assumed that the sellers' market
will shortly shrink and the conditions of acute shortages will
soon improve; for otherwise the channel of trade will continue
to be blocked as it has been blocked not so much by tariff walls
as by the lack of means of payment. But is is likely that these
conditions will persist during the life of the general agreement
on tariffs. It follows, therefore, that countries with the
sellers' market at their command and with terms of trade in their
favour. under these conditions and with manufacturing ,industries
geared up to full production should have a.greater share or
responsibility in bringing about the successful conclusion of
these negotiations than have the other countries.
Secondly, it is also to be assumed that the concessions
to be made and gained will balance each other. In this connection,
however, we must realise that in balancing a scale, the weights
used are not of uniform size. It is our view that the yard
stick should be such as will measure not only the mutual benefits
which the negotiating parties will have from the bargain, but also
the extent of sacrifices country makes in relation to its stage
of economic development. Other.factors which we have to take
into consideration in weighing the scale should include among
other things the low level of existing tariffs, the degree of
recovery from war devastation and the severity of economic
dislocation.
Lastly, it is also to be assumed that the tariff policy
which we are pursuing is an integral part of the plan for the
re-establishment of an expanding world economy. Whether the
tariff policy will lead to an expansion of world trade depends to
~~~I I D. 3
E/PC/T/PV/2/2
a large extent upon the progress we can make in other directions.
It is obvious that, with the festering wound of war devastation
on world economy still unhealed, our hope for an expanding world
trade will be, I am afraid, short-lived. It is equally obvious
that the expansion of world trade will be greatly accelerated by
the pace with which industrial development is realised in a number
of countries. Industrialization is a process which will take its
own course, whether aided or unaided , but with international -
investments and other forms of international assistance, this
process can be quickened. Of course, I have to content myself
with the reasons which are closely connected with the questions of
economic stability. It goes without saying that this stability
is intertwined with that of the general political situation.
It is the view of the Chinese Delegation that, since
we are to project into the future an agreement to reduce trade
barriers and since we cannot foresee at this moment all the factors
which will contribute to the successful operation of such an
undertaking, the tariff arrangements which we are making should in
no case run for more than three years, as had been suggested, so
as to afford an opportunity to the signatory parties to re-examine
their position in the changing circumstances during the interval.
M. le President, if I refrain from dealing with those
aspects of the Charter other than tariff matters, it is because
these matters will be the immediate concern of this second session
of our Committee, and I wish to assure you, Ladies and Gentlemen,
it is certainly not because we, the Chinese delegation lack
interest or enthusiasm of the Charter or the future ITO. On the
contrary the Chinese delegation is second to none in wishing to
see our efforts crowned with success, so that the way will be
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E/PC/T/PV.2/2
cleared for the calling of the proposed international conference
on Trade and Employment, and the foundations laid for the creation
of the new international organization. Let us hope therefore
that animated by the same spirit of understanding, co-operation
and good will in which the proceedings of the first session of
the Preparatory Committee at London, and also of the Interim
Drafting Committee at New York were conducted, this second session
will not fail to achieve the purposes for which it has been convened.
Ladies and Gentleman, I am sure I am only interpreting
the feeling of this gathering when I say that under the wise and
able leadership of our Chairman, M. MAX SUETENS, who is the
embodiment of wisdom, tact, and last but not least, has a sence
of humour, and in collaboration with all the members of this
Committee this Conference cannot and will not fail.
- 11 - E/PC/T/PV2/2
CHAIRMAN ( Interpretation ):
I call on the Delegate of France. E/PC/T/PV.2/2
CHAIRMAN: (Interpretation): The meeting will be adjourned
immediately after the interpretation of the French delegate's speech
has been given. The afternoon meeting will start at 3 o'clock to day
with the speech which is going to be given by Sir Stafford Cripps.
M. ANDRE PHILIP: (France) (Interpretation): Mr. Chairman, ladies and
gentlemen. The task upon which this conference is now engaged
was undertaken on the initiative of our friends from the United
States. Even before the war was over President Roosevelt thought
before anybody else of the need of preparing conditions which would
allow of world economic unity and which would make possible the
basis essential for international peace. Even in the first Lend
Lease Agreements which his administration concluded, economic
clauses were foreseen which were later taken up in the draft which
our American friends submitted, and which was studied by our
conferences both in London and later re-drafted in New York. Our
American friends understood that the political solidarity which they
pursued throughout the work between various nations, must rest on
the basis of an economic unity established in the economic field.
They understood that even the very wide home market of the United
States was not sufficient for them. They understood also that for
their own very prosperity the United States must develop and increase
and improve economic bonds with other countries and their commercial
relations with outside countries. From the very start France gave
its unqualified approval, to such a policy and we took steps which
were reassumed recently in May 1946 in Washington between Secretary
Byrnes and President Leon Blue. In London we also expressed
unqualified approval for that new policy which meant a return to
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bi-lateral trade in the world and to an ever increasing volume
of international exchanges. We realise of course that the task
which we have undertaken is a very long one. The world is now
in a state of economic destruction. Even before the war after
the crisis through which we had gone, we went through a period of
protectionism and autarchy which not only separated national
economies one from the other but also set up one country
economically against the others. Experience has shown that such
a policy could only lead to a general lowering of a standard of
living, to an increase in the poverty of everybody and to
economic difficulties of all sorts which were in their turn bound
to lead to political friction and thereby create a serious danger
for the world's peace. We are now in a position when we must
rebuild the world with what fragments are left. We realize that
it is only step by step, stage by stage that we can slowly move
towards the economic unity which we want to reach.
From the very start France agreed to that policy because
that policy is a very condition of its own existence. We import
a very large quantity of the raw materials which we need for our
industry. One third of the coal we burn, all the oil, 90% of
non-ferrous metals, a very large proportion of.cotton, textiles,
wood paste etc., and much of that comes from overseas countries.
Therefore, we must export similar quantities of values so as to
reach a satisfactory balance of payment.
Now, the very geographical position of France makes it
the natural intermediate between countries from across the
Atlantic and countries in Europe. Here after what we have done
in London, we are going to face two different tasks. First of
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all we want to bring down as much as possible tariff barriers and
second we want to prepare a draft possibly a final of the Charter
of our organization. Those two tasks are really closely inter-
dependent. We cannot meet the requirements of the Charter if all
nations do not bring about real substantial and permanent reduction
of their own tariffs as compared with those obtained before the
war. Similarly if we do not bring down such tariff barriers we
shall not be able to reach a satisfacotry balance of payment and
therefore the Charter cannot actually be put into effect. Also
if we do not bring the tariffs down to a sufficient extent, if
we cannot agree on the very basic concept of international trade as
we view it, if we cannot subscribe to mutual obligations such as
those that are at present envisaged, we shall never be able to
reach effective co-operation. We must realize further, that the
abolition of barriers and obstacles, even to a very large extent,
enough
will not be/because if we were content with that we should merely
come back to the old system of free trade which leads us again
into the periods of prosperity and the depressions and slumps with
which we were so familiar before the war. Therefore it is
necessary that in addition to the minimizing of those obstacles
and barriers we should simultaneously create international bodies
and build the practical basis for economic co-operation.
H .
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This of course we all realise must be done by successive stages.
Our world has now been thrown completely out of balance. It is
at present split into all sorts of fragments which differ widely
from each other, but we must attempt loyal and effective co-opera-
tion. This was clearly understood by those of us who sat in
London and New York and we all realise that from the very start
we must agree on some relative equivalence of the conditions
of production so as to lead to an equivalence of fair competition.
We must for that take into account not only the conditions of
countries whose economies were practically destroyed but must be
reconstructed but also those new countries to which our Chinese
colleague alluded and which have to build up their own economic
system anew. France, and that also applies to many other countries
in Europe, is in a condition which we know to be non-permanent,
to be passing, but which must be taken into account. Our economy
was wrecked, our industry w.s destroyed, not only through the fighting
which took place on our territory and through the bombing to which
we were subjected, but also because our industrial plant is very
largely obsolete; not only was the material not properly kept in
good condition but it was also not replaced and kept up to date.
We also suffered from having been isolated for a number of years
from the outside world. For those countries which are in the same
condition in which we are ourselves, it is absolutely necessary that
some plan should be adopted and put into practice for reconstruction
and re-equipment of our industry. Since the French territory was
liberated, our country has made an effort, which is probably without
precedent in our history, for rebuilding our industry and for
bringing it up to date. This of course entails very heavy sacri-
fices for the bulk of our population, since our industrial needs
had to be taken care of, with priority over consumer goods and the
raising of the actual standard of living. For those reasons,
-16- E/PC/T/PV2/2
it is necessary for us that for a period to come we shall still have
a definite program of imports and a definite programme of exports
to balance them. We must choose what we are going to import so
as to bring our equipment back into shape as soon as possible and
we must export whatever products may be acceptable to those countries
from which we import the material we need and this must go on to
some extent until we have reached more or less lasting equilibrium
in order to balance payments. This same condition applies also
to other countries which have to be rebuilt and reconstructed. It
applies also to those new countries which have to build up their
economy anew. Of course we all realise that there no longer is
at present the hard and fast line with which we were familiar
between importers of industrial products and exporters of the same
products. Now all countries are either actually or potentially
industrial countries and the exchanges of industrial products
must be considered on an entirely new basis, but there is a need
of a sort of transitory period for such cases, during which we
must determine, according to our own needs the conditions of pro-
duction and the conditions of our own trade. During that period
a few unavoidable preferences have to be respected. For instance,
in the case of countries which, although geographically distant,
are very closely bound economically because they are also bound
politically, imperial preferential treatment must be respected for
some time to come. As a matter of fact, we must realise that a
general world improvement can only be made possible if we respect
the existing economic bonds between countries with which we are
politically tied together, and we should not attempt to break up
those bonds, to break up existing units for the sake of getting
more rapidly into a world wide organisation. In the French Union,
where we have such bonds, with due respect to the needs and privi-
leges of local units inside that Union, we must realise that those
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H2 E/PC/T/PV2/2
bonds must be kept for some time to come, although arranged in such
a way of course as not to be prejudicial to trade with outside.
To sum up this particular point, we must confirm that
principle of imperial preference but we must reduce the volume of
its application.
I want to say a few words now on the problem of bilateral
agreements. Of course we all realise that multilateral agreements
are more preferable and that our final ultimate aim must be world
wide agreements, in which all countries are included. But the
experience acquired during the last two years has shown us that
with the world in its present condition it is not bad to start by
making up fragmentary agreements and it is in that spirit that
France has concluded arrangements with Belgium, with Switzerland,
with the Netherlands, with Sweden, in order to rebuild trade
currents which existed before the war and which are still absolutely
necessary. The results of those agreements are that the volume
of goods exchanged between the signatory countries has gone up
substantially. We should therefore be very careful not to hamper
the application of the development of such agreements to any extent
and France hopes to conclude similar agreements soon with other
countries.
We must realise that any widening of an existing customs
union and any widening of existing markets can only be helpful for
international exchanges as a whole, and the French Delegation hopes
that in the final text of the charter provision will be made to
respect customs unions in process of formation or development and
that they will be allowed to grow until the fruit is actually ripe
and becomes palatable for everybody . This same remark ,applies
also to international agreements. Before the war we had a number
of painful experiences with those agreements and we felt that in
many cases they followed a Malthusian policy, in a decrease in
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H3 E/PC/T/PV2/2
production and increase in obstacles put in the way of foreign trade.
The United States will certainly remember the bitter experience they
had in that respect and they are certainly keen to prevent a
repetition of such experiences. The French Delegation feel that
such agreements, however, can play a useful part and that to a
certain extent they may compensate the too narrow markets from
which certain small countries suffer. We should not, as a matter
of principle, oppose any intermediary stage between the national
economic unit and the world-wide unit which we are aiming at, but
we must take certain precautions. We may ask, for instance,
that full publicity should be given to such agreements. We may
oppose any abuses to which they might leads. We may ask that a
measure of international supervision should be set up and also
make sure that such agreements, with a view to reaching a collective
international policy, have not only the advantage of private
entries to whatever they are.
I Want to add a few words on the necessary liaison which
will have to be established between the new organisation we are
setting up and the other world economic organizations. That was
provided for already in the Treaty of Versailles, which in Part k3,
setting up the International Labour Organisation, stated very clearly
that labour was not to be treated as merchandise and that conditions
have to be provided for which would allow for satisfactory labour
conditions and fair competition. Now we have not only the I.L.O
but we have the Food and Agriculture Organisation and a numberof
others which either have been set up or are now being organised.
We certainly believe that the one which we are setting up here
should be given its due importance and should be given whatever
economy may be necessary for it so that it can play a very positive
part in the establishment and improvement of international economic
relations. That co-operation must be regular, continuous, and
effective between all nations, so as to load to the desirable and
-19-
I :'~~~~~~~~~~~~~
H4 E/PC/T/PV2/2
desired increase in permanent international trade. On the other
hand, we must realise also that many countries have now found it
necessary to prepare national economic planning but perhaps that
sort of planning should not be exclusively on a national basis.
France, for instance, which has had to resort to planning, has
opened relations on that very subject with Great Britain and
explained fully the French plan, with a view to trying to harmonise
it with the corresponding plans in Great Britain. In Europe, in
its present dilapidated condition, such plans may be needed in a
great many countries, but we must see to it that those plans are
not drawn up absolutely independently from each other but that they
are orientated in the sane spirit and that in each one due account
is taken of the conditions of the other. Similarly, our organi-
sation must certainly lead all nations towards more intensive inter-
national exchange, because we want to prevent those periods of
depressions and slumps which periodically followed, before the war,
periods of prosperity, and unless we prepare for some common action
now we cannot take any decisions which would be of a permanent
character, as all the bodies which we could possibly set up would
simply fade out if we came into a slump such as the ones through
which the world went in 1929. We must plan right now some common
effective positive co-operation through international bodies and we
must/immediate provision for the calling of an international con-
ference should conditions arise similar to those which led to the
1929 slump, so that we can take common action. For that reason
it is necessary that the premanent body which we are setting up
should be open to all countries and should also gain the confidence
of all nations. Here we are working on very divergent bases in
our respective countries. The economic structure of our countries
is very different and would seem to be in direct opposition to each
other, but we shall succeed in our efforts here exactly in the
-20- E/PC/T/PV2/2
measure in which we can prove that countries working on that
collective economy - those with a liberal economy, those with
a planned economy - can work together and co-operate in their
trade policy because they have one aim which is common, which
is world-economic unity, the prerequisite for reaching an
increase in the standard of living for all and which can provide
the only possible basis for international peace.
VICE-CHAIRMAN: The Session is adjourned.
The meeting rose at 12.30 p.m.
I
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H6 |
GATT Library | vg940bg7776 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Second Meeting of Commission A held on Tuesday, 27 May 1947, at 3.0 p.m., in the Palais des Nations, Geneva | United Nations Economic and Social Council, May 27, 1947 | United Nations. Economic and Social Council | 27/05/1947 | official documents | E/PC/T/A/PV/2 and E/PC/T/A/PV.1-3 | https://exhibits.stanford.edu/gatt/catalog/vg940bg7776 | vg940bg7776_90240058.xml | GATT_155 | 10,594 | 64,490 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
NATIONS UNIES
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/A/PV/2
27 May 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
SECOND MEETING OF COMIMSSION A
HELD ON TUESDAY, 27 MAY 1947, AT 3.0 P.M., IN
THE PALAIS DES NATIONS GENEVA
M. MAX SUETENS
(Chairman)
(Belgium)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247). - 2 - E/PC/T/A/PV/2
CHAIRMAN (Interpretation): Gentlemen, the Meeting is
called to order.
As I told you this morning, we will start our afternoon
meeting with discussion of a paper, E/PC/T/78, which is the
Second Report of the Drafting Committee on Charter Nagotiations.
Would the Chairman of this Committee like to add some
comments on the Report?
Mr. E.T.HAWKINS (Chairman, Charter Steering Committee):
Mr. Chairman, I do not think much is needed in the way of comment.
All the Committce has done is to schedule the meetings for
Chapter VIII and Chapters I and II. In doing this, it has
set the date for the discussion rather late, in the hope that
Committee B, to which the discussion will be assigned, will have
completed its work on Chapter VII by the time the new matter
is taken up. We thought probably that would be more practicable.
CHAIRMAN (Interpretation): Does anybody wish to speak on
this Report? M. Baradue.
M. PIERRE BARADUC (France) (Interpretation): I am
sorry, Mr. Chairman, that I myself was not at the Committee
meeting, but from discussions I had this morning I realise
that a certain number of Delegations would not be able to
conduct, as speedily as suggested here, simultaneous discussions
on tariff negotiations and on the Charter. I believe it is
necessary to take into account the small Delegations, for which
this time-table would present certain difficulties. I would
suggests for example, that in the mornings we should discuss the
Charter and that we should leave every afternoon free for the
tariff negotiations. This is simply a suggestion on my part.
S E/PC/T/A/PV/2
As far as we are concerned, we should probably be able to do the
two things at the same time, but I have heard from other
Delegations that they could not keep up such a pace. I Would
also like to ask the representatives of the United States and
of the United Kingdom if they have not heard similar criticisms
on this scheme.
CHAIRMAN: The Delegate of Cuba.
Dr. GUSTAVO GUTIERREZ (Cuba): When the discussion of
this time-table was taken up with the Steering Committee, we
co-operated with other Members of that Committee in framing it
At the same time we thought that too many things were
included in this short amount of time. We did not raise any
formal objection because we thought we oould push ahead with
the work in the time allotted and at the same time undertake the
tariff negotiations. We have also found it impossible to attend
at the same time several meetings of the different negotiating
teems, the different sub-Committees and special committees; it
is really more than we can do. We know that several other
Delegations are in the same difficulty, so we second the proposal
made by the French Delegate. We could go ahead with the schedule
as it is, but try to have the morning dedicated to the Charter
discussions and the afternoon for the tariff negotiations.
S
- 3 - E/PC/T/A/PV/2
4 _ J1 ./( V/U
Mr. JT. CP'IN (China): The Chinese delegation supports
the proposals put cforward by the Frenh and Cuban delegations. As
a matter of fact we think that it is utterly impossible for our delega
tion to do this double work as it is scheduled.
CHAIRMAN (Interpretation): I believe that I should not allow
this disc.ussion to go astray We are not discussing our time-table
proper, the whole of our time-table, but Mr. Hawkins has proposed
dates for the Study of Chapters VIIIof, II, and I. I, course,
realise the difficulty mentioned by Mr. Baraduc and other delegates
but I tbvhink t has always n arranged that we should begin by
following the order of our time-tablef and see, after a ew days,
whether it is possible for us to keep to the time-table or not. But
today is the first day and I think it is a bit too early to decide.
I think we should lolok at the time-tabe circulated, and if you look
at it you will see that Thursday, Friday and Saturday have been left
without any maatter to discuss, nd I suggest that these days could
But in any case,
be usefully ocupied in discussing tarif f negotiations. /I suggest
that we do. not immediately discuss tehe question of th time-table but
merely decide now whether we agree to the date fixed for discussion
of Chapters VIII, II and I, and if after a while, we consider that
we cannot follow the time-table or that some delegations are unable
to adhere to it, then we can always revise it.
:-CGn'tr.':tc ) (latei pedion: Mr.Cehairman, th( Cuba
delegation have no objection of course to disposing first of the
sauggestions mde as to the setting out of the work, but they reserve
the right teo state the ase immediately afterwards about the time-
table because, up to this time, we have already started and we have
found that woit does not rk.
- E/PC/T/A/PV/ 2
Mr. BARADUC (France) (Interpretation): I apologise: when
I opened this debate I did not intend in any way to slow down our
discussions here, but when this morning I was told that some of the
tariff negotiations had to be suspended or adjourned in view of the
discussions taking place on the Charter I wondered whether it was a
good idea to adjourn temporarily the discussions on tariffs. But,
of course, I agree with you that the situation will not arise this
week, in view of the fact mentioned by you that we have three days
free. But in future I wonder whether it would not be a good idea
for the two Working Parties, those working on the Charter and those
working on Tariff Negotiations, to come together and have some sort
of agreement and hear the complaints of some of the smaller delega-
tions.
CHAIRMAN (Interpretation): I think the suggestion just made by
the delegate for France is an excellent one and that the two Steering
Committees might meet and hear the complaints of the delegations which
find themselves overworked by the time-table.
This being said, are all delegations in favour of the Report?
The Report is adopted. E/PC/T/A/PV. 2
CHAIRMAN (Interpretation) (Contd.): We resume the discussion
on Article 9 of the Charter, it being understood that vwe reserve
until tomorrow any discussions on the United States amendment
regarding capital Investments. I will remind the Committee that
in addition to that amendment, the United States delegation
submitted four more amendments, which are all more or less
substantial amendments.
I would ask the delegate for the United states to explain
to us the consequences of his amendment.
MR. C. WILCOX (United States): Mr. Chairman, the amendments
that are suggested for the first sentence in Article 9 on Economic
Development - the first proposal is the addition of the term
"countries or dependent territories". The purpose, there is to
give recognition as to the desirability of promoting the development
of dependent countries as well as the development of self-government.
The second amendment proposes the deletion of the phrase
"contribute ultimately to economic stability." Delegates will
remember that this point was discussed by the Committee in London
in connection with the report on this Chapter. The phrase was
deleted from the report, but by inadvertence, I believe, it was
allowed to remain in the text of the Charter. What the phrase
says is that highly industrialised countries have greater economic
stability than undeveloped countries. If the Committee wishes it
to go on record in support of this statement as a matter of
principle, I think it may raise some question concerning some of
the statements that are made in connection with Chapter III, where
the suggestion is clear that highly developed countries are
susceptible to considerable instability.
A third amendment proposes the substitution of the phrase
"standards of living" for "levels of real income'. This is in line,
J.
- 6 - E/PC/T/A/PV/2
I believe, with the suggestion made by Mr. Nash in an earlier
statement to this Committee. It was our view that "Standards of
living" is more generally understood and less susceptible of
misinterpretation. We are not insistent on this point.
The fourth amendment suggests dropping the phrase "thus
strengthening the ties of international understanding and accord".
This suggestion does not involve any lack of enthusiasm for
international understanding and accord, but on reflection it seemed
to as that this was the purpose of the whole Charter that this
phrase as it appears probably belongs in Chapter I rather than in
this Chapter, and appearing in this context it involves, perhaps,
unnecessary ornamentation. On this point,. also, we are not
insistent.
MR. J. HELMORE (United Kingdom): Mr. Chairman; if I might
refer to the first of the .amendments put down by the United States
delegation, which is to add the words "or dependent territories",
I would like to say that in the view of my delegation this discloses
a fault in the drafting of this Chapter as a whole, or rather a
fault which ocouredd because this Chapter was inserted at a later
stage than the developments of the other parts of the Charter,
particularly in Chapte. V. In Chapter V, Article 38 there is
a paragraph which is called. Territorial Application of Chapter V,
and there it is said that "if there are two or more customs
territories under the jurisdiction of any Member, each such customs
territory shall be considered as.though it were a separate Member
for the purpose of interpreting the provisions of Chapter V".
J. G.
-- 8 - E/PC/T/A/PV/2
Now if you look at Article 13 of the Chapter we are
now discussing, it provides that Members may take protective
measures in certain circumstances. Well clearly "Member"
there is intended to mean separate customs territories.
A separate customs territory is the only separate entity which
can take a protective measure in this contect, but it is
nowhere provided in Chapter IV. That "Member" does, even in that
Article, even refer to a separate customs territory; and that
seems to me to point to the need for looking at the whole of
this Chapter and seeing whether the words "Member", "Country",
"Territory", "Dependent Territory" and. so on are rightly used.;
and. I am not sure that the Preparatory Committee will really
be able to do that properly until it has considered Article
88(4), which refers to a particular class of territory which
is, as it were, neither independent nor dependent. It is
self-governing in respect of matters covered by the Charter,
that is to say, it is self-governing in respect of its plans
and aspirations and projects for industrial development, and
therefore it seemed to us that there is some further
complication to be worked out there, and indeed, it might
require to be looked at in relation to the definition of who
can become Members of the Organisation in Chapter 2.
I use the opportunity of the introduction of the words
"dependent territories" here to point out those matters
which really, it seems to us, require clearing up. Whether it
is profitable to try to clear them up at this stage in the
consideration of Chapter 4 is a matter on which I would. welcome
the views of the Committee. As for the insertion of "dependent - 9 - E/PC/T/A/PV/2
territories" here, I think it is undoubtedly true that a
dependent territory - that is to say, one that is not at all
self-governing in these matters - is likely indeed to be
relatively under-developed; but that is not because being in
a state of dependence has kept it under-developed, it is because
its political and economic development go together, and as
countries become politically developed they tend to become
industrially developed or economically developed - or the other
way about. So I am not at all sure whether it is right or
wrong to put this in here. On the whole I think it is wrong,
in that the implication is that dependence has in some way
retarded economic development. One might just as well say that
a lack of economic development has retarded political development.
On the whole I think it is better to leave the words as they were
- just refer to countries as yet relatively undeveloped.
not
1 am/sure that that question can be finally settled until
we know what are going to be the exact provisions about the
territorial application of this Chapter.
With regard to the other Amendments which the United States
Delegation has mentioned, I do not think we have any strong views
on the particular questions of drafting.
On one point, I hope of correction: I heard the Interpreter
say that I had made this series of remarks "pour clarifier la
situation". If I did so, say I was making a series of remarks
in order to clarify the situation, I withdraw it unreservedly
CHAIRMAN (Interpretation): Mr. Helmore, the Delegate of the
United Kingdom, has raised a question already dealt with in a
._curment which has been circulated. Document 110, circulated on
23rd May, 1947. Mr. Helmore himself pointed out that he did not G. - 10 - E/PC/T/A/PV/2
believe we should now attempt to solve this problem.
I believe myself that we should take up the question in
connection with Chapter 8, and more particularly with Article 88,
paragraph 4.
If the Committee is in agreement with what I have just said,
I propose we leave Article 9 as it stands, as far as the United
States Amendment is concerned, and that we take up the matter
again, if necessary, when we discuss 88. - 11 - E/PC/T/A/PV/2
Mr. AUGENTHALER (Czechoslovakia): Mr. Chairman, I should
say that I agree entirely with your proposal that this question
should be discussed later, especially as Czechoslovakia has no
trouble with her dependent territories. As to other amendments
of. the United States delegation, we agree entirely that there is
no need to leave in this Article 9 "contribute ultimately to
economic stability",and in the last amendment "thus strengthening
the ties of international understanding and accord". As to the
point of "real income," of standard of living,. I would like to point
out that this question is discussed, as far as I know, in the
Sub-Committee for the interpretation of Articles 3 and 4, so I
think that would be better left until the formulation could be
found.
There is one more point. I would like to know why, in this
Article, the words "increased demand for goods and services" are
used, while in other parts of the Charter the word "services" is
no more employed, especially in part 6 of the Charter. So I
wonder if it would not be better to leave "goods and services"
throughout the whole Charter.
M. BARADUC (France) (Interpretation): I do not want, Mr.
Chairman, to start a lengthy discussion on the French text. I
have said this morning that I would agree to the United States
amendments, provided that the French text be amended to
"territoires en dépendent". I know that the distinguished
interpreters have, from time to time, adopted the Secretariat
version and sometimes my version. I would like the French
translation section to be informed so that there should be no
ambiguity in the text. ER
- 12 - E/PC/T/A/PV/2
Mr. L.C. WEBB (New Zealand): Mr. Chairman, the New
Zealand delegation would submit that the words "ultimately to
contribute to economic stability" have a useful place in this
Article because they express a truth of some importance that
undeveloped economies are dependent on a small range of products,
and that usually those products are primary products which are
less stable in the world's markets than manufactured products.
Furthermore, we do not see any inconsistency with Chapter III if
this phrase is left in Article 9, because there are, of course,
other. sources of economic instability.
CHAIRMAN (Interpretation): If no other delegation wishes
to speak, I think we can refer the amendment to the Sub-Committee.
We now pass on to Article 10. On this Article we have an
Australian amendment which consists of replacing the words
"within their jurisdiction" (and putting them in other places) by
the following sentence: "Members within their respective
jurisdiction and the Organization generally shall take .. etc."
I would ask the delegate for Australia to explain his amendment. S -13 - E/PC/T/A/PV/2
Mr. E. McCARTHY (Australia): Mr. Chairman, the object
in suggesting that the words "within their jurisdictions"
be moved from where they are in the existing draft to the
earlier position we suggest, is that it is really a drafting
amendment. As it stands now, it suggests that the object is
to raise standards of productivity within their jurisdictions.
We can assume that the objective is that "action designed pro-
gressively to develop," and so on, should be taken within
their jurisdictions.
We thought the words "and the Organisation generally"
followed upon the decision of the Economic and Social Council,
which was circulated on 25th April, Docuc nt T.45. The
particular section of Article 11. which was referred to the
Economic and Social Council appears as Article 11 (2) and the
decision of the Council, as set out in that circular, was
that reference should be made to the fact that the Organisation
could take part or could take the initiative in plans for
economic development. That decision also appears in Article
11 and we suggest, in article 11 or 11(1), the insertion of the
words,"with the Organisation" after the words "shall co-operate
with one another."
As the words come into both Articles 1O and 11, Mr.
Chairman, should we take these Articles together or should we
wait and deal with Article 11 separately?
CHAIRMAN (Interpretation): I fully agree that in the
case of this problem we should discuss articles 10 and 11
together.
The Australian amendment to Article 11, Paragraph 1,
would consist in adding the words "with the Organisation" to
the part of the sentence reading as follows: "Members shall E/PC/T/A/PV/2
co-operate with one another, with the Organisation and with the
Economic and Social Council" and so on.
Mr. E. McCARTHY (Australia): Mr. Chairman, it also raises
the question of Paragraph 2 of Article 11, and we would raise the
question - we have not made a proposal in this case - whether
at the end of Paragraph 2 we night add: "In carrying out this
function, the Organisation shall co-operate with the Commissions,
sub-commissions and specialist agencies of the Economic and
Social Council." That arises out of the last sentence of the
communication of the Resolution of the Economic and Social Council.
That is all we have to say on it. I think in the case of an
addition to Paragraph 2 of Article 11, the sub-committee which is
looking into it might like to consider it.
CHAIRMAN (Interpretation): It is indeed an important
question but one which could be dealt with in Plenary Session only
with great difficulty. If the australian Delegate is in
agreement, I therefore suggest we refer it to the sub-committee.
The Delegate for Brazil.
Mr. J. G. TORRES (Brazil): Mr. Chairman, the Brazilian
Delegation wishes to support the amendments put forward by the
Australian Delegation, for the reasons already advanced by them.
We attach great importance to this whole Chapter and we
think it would be considerable improved if these amendments were
accepted, especially in view of the Resolution of the Economic and
Social Council already referred to.
CHAIRMAN: Mr. Helmore.
S
- 14 - S - 15 - E/PC/T/A/PV/2
Mr. J. R. C. HELMORE (United Kingdom): Mr. Chairman, I
just want briefly to put forward one question for the consideration
of the sub-committee: that is, that whilst I entirely agree
with the spirit of the Australian amendment, it might be a pity
to destroy the particular point and punch of article 10 by
inserting the words "and the Organisation generally," It seemed
to us that it was much more valuable to leave in Article 10 a
definite obligation on Members to take action within their own
jurisdictions to develop and to raise standards of productivity.
It seemed to us that the question of co-operation on this matter
between Members inside the Organisation with the Economic and
Social Council and with the other specialised agencies was more
appropriately dealt with according to the plan of this Chapter
that we developed in London in Article 11. On my suggestion,
Article 10 would then read "Recognising that all countries.
Members shall take actions . within their respective jurisdictions
designed progressively to develop industrial and other economic
resources," and so on. We could then go on in Article 11 to
lay down the obligations. E/PC/T/A/PV/2
Mr. J.H.G. PIERSON (United States): I hardly need to speak
to this question because I was going to raise the same point as Mr.
Helmore has just raised. We are fully in agreement with the intent
that action taken to develop industrial and other economic resources
should be within the jurisdiction of the countries just as well as
action to raise standards of productivity. We also fully agree
with, and would second the suggestion that in Article 11, paragraph
l, / lembers should oooperate with the Organization as well as with
other Bodies. We do foel, however, some doubt about the ad-
visability of introducing into Article 10 a statement of obligation
of the Organization, when it had seemed to us that this Article
very clearly and uniquely referred to the obligation resting upon
a Member country. Therefore we would be inclined to suggest that
the drafting Sub-Committee give considerable thought to the advis-
ability of not bringing the Organisation into Article 10 but making
the other changes which have been suggested.
Mr. R,L. FRESQUET (Cuba): Mr. Chairman, we follow the view
already expressed by Mr. Helmore and Mr. Pierson: we are already
establishing here in Article 10 an undertaking for members to develop
industrial and other economic resources and we agree to that: but we
cannot go as far as to allow the Organization to impose any economic
plan of that kind upon the Members.
CHAIRMAN: (Interpretation): May I ask the delegate for
Australia what are his views on what the delegates of the United
Kingdom, the United States and Cuba have just said?
Mr. E. McCARTHY (Australia): We rather think there is some-
thing in what has been said. We had no particular objective in
suggesting it other than that, as we were proposing an amendment in
another form, in another direction, it seems to follow that, arising
P. P. E/PC/T/A/PV/ 2
-17 -
out of the resolution of the Economic and Social Council this
adjustmtent ought to be made in both.
Could I suggest that when the Drafting Committee is looking at
Article 11, they look at this Article 10 too, and we would probably
if
take the view that/ is covered sufficiently in Article 11, we
would then let it go in Article 10.
CHAIRMAN (Interpretation): I think therefore that the time
has come to refer this question to a sub-committee which will take
into account all the opinions expressed, and in particular the last
remark made by the delegate of Australia.
Mr. L. GOTZEN (Netherlands): There is only a small ques-
tion at wording which I should like to raise now. Throughout the
Chapter when we speak about that matter, we speak about measures
consistent" with the other provisions of this Charter. Now, only
in this Article we use the word "compatible." I do not know
whether that is quite the same, but if it is not, perhaps we had
better use the word "consistent"
CHAIRMAN (Interpretation): I believe that such a question is
precisely the kind of question to be solved by the sub-committee.
I therefore think that we can - leaving out the first amend-
ment of the Australian delegation which has been referred to the
Sub-committee, and also the second amendment in paragraph 1, that
is the one proposed by the United States delegation which deals
only with a small matter of drafting, replacing the word "and" by
the word "with" in another part of the Article - we can pass on to
paragraph 2 of Article 11 immediately. - 18 - E/PC/T/A/PV/2
CHAIRMAN (Interpretation): We therefore pass on to paragraph
2 of Article 11. I will remind you that Article 1l has already
a long history. Originally, as you may remember, Article 11
consisted of three paragraphs. The drafting committee in New York
deleged paragraph 3 and incoorporated it as the first sentence of
paragraph. 2 of the same Article. However, the Drafting Committee
cautiously put between square brackets that part of paragraph 2
pending the decision to be made by the Economic and Social Council.
Such decision was therefore made on 29th March, 1946 and you can
find it in document 55, dated 5th April, 1947. This decision
should enable us now to delete the square brackets, but it might
necessitate some alteration to the paragraph. On that particular
paragraph there are four amendment, one of which comes from the
Secretariat. We should take up now the first amendment which is
submitted by the Cuban delegation, and which consistss in adding
the words "specially as for the ways and means of financing, said
plans". That part of the sentence would come at the end of the
first sentence. I wonder, however, in view Of the discussion which
took place this morning on Movement and Investment of Capital if it
is still necessary to have this amendment, and whether it might
not be better to reserve its discussion until after the discussion
of Capital Investment.
BR. R. L. FRESQUET (Cuba): Mr. Chairman, we were aware that
we would be suspected of being too specific with our amendment and
but
now I am aware that our amendment may be misunderstood/'we are not
concerned about the actual financing, but also with the plans and
ways and means of finance. It is useful, in the case of small
countries who do not have enough research personnel to plan in the
proper way either the finances or the actual engineering or
execution of economic plans, so we insisted on that in order to J. E/PC/T/A/PV/2
- 19 -
benefit also from the advice that such an organization as the ITO
may give to the small countries. Thank you.
CHAIRMAM (Interpretation): In that case, it might be found.
that the Cuban amendment is closely related with one of the United
States amendments, which explained the term "technical assistance".
We have a United States amendment, it may be different but it
stresses also the same point and reads as follows "and. assist in the
procurement of appropriate engineering and other technical
assistance".
I now recommend that the two amendments should ultimately
be put together and be made into one single drafting. I will thus
refer the question to the sub-committee.
MR. J.R.C- HELMORE (United Kingdom): Mr. Chairman, I am not
absolutely sure which was the other amendment, besides the Cuban,
which you are proposing to send to the sub-committee.
CHAIRMAN (Interpretation): The amendment I referred to was
the United States amendment which is on page 4 of document 125.
It consists in adding at the end of the first sentence of paragraph 2
"and aesist in the procurement of appropriate engineering and other
technical assistance". This amendment, though different in form, is
similar in spirit and has pursued the same idea as the Cuban
amendment. It has been said, if there is any doubt, in the
Commentary that "the term 'technical assistance' has been widely mis-
understood to mean that the ITO proposes to establish industrial and
scientific research laboratories, execute construction projects,
and. generally go into the business of providing industrial
technology".
Mr. J.R. C. HELMORE (United Kingdom): Thank you very much
Mr. Chairman, I take it we are not leaving the subject of the
first part of the United States amendment? G.
E/P C/T/A/PV/2
20
Mr. AUGENTHALER (Czechoslovakia): I think we are in
full agreement with the United. States proposal for the wording
of this paragraph 2. I suppose, of course, it means that the
Organisation is not entitled. to take any initiative as to the
countries, but that the words "upon request of each Member"
are binding towards the whole of the Article. Therefore, we
thought that it would be better, maybe, to put "That Member",
rather than to express the same idea in the second paragraph:
"The Organisation may, etc." We would put "That Member may make
a Recommendation".
CHAIRMAN (Interpretation): This seems obvious, Mr. Delegeate.
Mr. HELMORE (United. Kingdom): Mr. Chairman, I am not quite
sure how one gets at that interpretation - I have understood
the point of the Czechoslovak Delegate rightly. The paragraph
now begins by saying "the Organisation upon the request of any
Member may advise such Member" - and that goes down to the end
of the first sentence, with which, I imagine, most Delegates
here are in agreement.
Then, a new sentence: "the Organisation may in accordance
with the principles of this Chapter consult with and make
Recommendations to Members and appropriate inter-Governmental
Organisations relating to the encouragement of the industrial and
general economic development of Member countries". How the
Organisation may on the request of a Member make Recommendations
to appropriate inter-Governmental Organisations about the general
economic development of Member countries, I am not quite sure;
and. I was going to raise the question whether the New York Drafting
Committee in transferring that sentence from another Article
altogether have not made a mistake, and that it would be better G. - 21
to revert to the London text and leave the general proposition
for the consulting and making Recommendations in the general
powers of the Organisation as we had it in London.
Mr. FRESQUET (Cuba): I wondered if the objections to the
New York wording can be overcome. If we may make a separate
paragraph of the last sentence of paragraph 2.
CHAIRMAN (Interpretation): So that in a sentence, "It may,
in accordance with the principles of the Charter, consult and
make Recommendations to appropriate inter-Governmental
Organisations".
I think that we can consider the Debate ended on this
question, and that the Sub-Committee may profit by the views
expressed on it.
Mr. NAUDE (South Africa): As a Member of the Drafting
Committee at the beginning of its work, while there may be
possibly very sound sense in what you said, the only point we are
interested in at the moment is, how are the words "in accordance
with the principles of this Chapter" interpreted in connection
with a situation such as one can conceive? Is the Organisation
to be entitled to advise a Member of the ITO that its general
economic development in a certain direction is unwise - or that
it would be wise to develop a high productive power? I throw out
the question because it seems to me there is a certain doubt
about what precisely the Organisation may do in the framing of
that sentence.
I do not know whether the Sub-Committee you have mentioned
can also solve this, but it is a matter of principle,and it seems
to me to need some attention.
E/PC/T/A/PV/2 22
CHAIRMAN (Interpretation): It would be difficult for me
to answer this question, but I am sure there is in this room
someone who attended the meeting of the Drafting Committee either
in London or New York, and would be able .to explain the exact
meaning of that sentence, and whether it should be interpreted as
the South African Delegate has just suggested it.
In any case, when I read the text of this paragraph, it
seems to me that it is clear sense. It is said "the Organisation
may in accordance with the principles of this Chapter consult
with and make Recommendations to Members" and so on. It seems
clear the Organisation is entitled to advise the Members in
regard to the encouragement of the industrial and general
economic development.
Mr. NAUDE (South Africa): I do not think the Drafting
Committee in New York - speaking as a Member of it - discussed
this matter au fond, as you suggested. I was not present
in London when this particular subject was discussed; but
nevertheless the phrase "in accordance with the principles of
this Chapter" reminds one of a great deal of rather general
language in this Chapter unspecifically, and I am doubtful whether
all Members would be willing to give the ITO the power on its
own initiative to make Recommendations to Members of the
Organisation as to economic development and as to the direction.
I do not press the point - it can be left right where it is.
It can be left to the Drafting Committee to solve. ER
- 23 - E/PC/T/A/PV/2
Mr. HELMORE (United Kingdom): I cannot remember very
accurately what took place in London, but perhaps I can try and
deal with the point underlying the South African delegate's
question which I think is the same point which worried the
Czechoslovakian delegate, and indeed myself when I spoke. It
seems to me that in Chapter IV we are in the prooess of
constructing obligations and right's for members and that if this
sentence appears here in this context, though it only says
"consult with and make recommendations" there is an implication
that, having made a recommendations to one, under powers conferred
in the Chapter that cons-.ructs obligations, there is some
particular necessity to take notice of that, recommendation, either
to adopt it or to feel slightly red in the face if one has to
explain why one does not adopt it. What we did in London when
a sentence was not clear, was, first of all, to construct this
Chapter and then to look at the first Article dealing with the
functions and structure of the Organization, and we wrote a
paragraph under functions to conform to this Article. Clearly
the Organization does have a function to perform in connection
with all the economic developments on the Article, and there we
said it should be the functions of the Organization to consult
with and to make recommendations and reports to members
regarding any matter relating to the purposes of the Organization
or the operation of the Charter including the following which is
sub-paragraph (d) : "recommendations as to measure for
implementing the objectives of the Organization in e. ouraging
and assisting the industrial and general economic development of
members. I think the sense of those words is very much less ER
E/PC/T/A/PV/2
24
specific and direct and that if they appear there, they do allow
the Organization to perform the useful functions which is to say
from our central position we use this happening in the field of
industrial development and we wonder whether it is right or we
wonder whether it is going too slowly or too fast, but it does not
put into this Chapter, with its obligation on members, the
opportunity for the Organization to make direct recommendations
about the development or reconstruction plans of individuals.
Mr. NAUDE (South Africa): Mr. Chairman, I might just add
this. If the general interpretation of the London Report was
borne in mind by the Drafting Committee, I think the matter might
be dropped. S
- 25 -
CHAIRMAN: Dr. Augenthalor.
H. E. Dr. Z. AUGENTHALER (Czechoslovakia): Mr. Chairman,
I have a small remark to make. When I was in London, I saw
a play "Is your Honeymoon really necessary?", and now I am
wondering if the words "the Organisation" are really necessary
in this part of this Article.
There is something in human nature in general which tends
to give good advice to others. It is always rather difficult
to give good advice to one's own Government, but to other
Governments it is extremely easy (Laughter), especially if the
Government is far removed and there are no direct dangers of
complications. That is why I thought maybe this part of this
Article is not so necessary here at all. In practice, it would
probably be that some countries would be introducing some now
breach of industry. For this new branch they would require
some technical or financial aid; they would approach the
Organisation, possibly, and request this aid. In this case the
question would be discussed and probably the Organisation might
make certain recommendations to the Member requesting this aid,
or might make recommendations to some other organisations, for
instance; to the International Bank. But I cannot see how the
Organisation, on its own initiative, could deal with the problems
of the internal plans of any country.
CHAIRMAN: The Delegate of Brazil.
Mr. J.G.TORRES (Brazil): Mr. Chairman, if I remember
correctly, the idea of putting this paragraph in Article 61 was
to give to the Organisation some function that would make it
the business of the Organisation to advise on specific projects S - 26 - E/PC/T/A/PV/2
of industrialisation or other economic development. In New
York it was deemed advisable to make Article 61 more general
and to transfer this particular part of 61 to that part of
Chapter IV that seemed to be consistent with what we had in
mind.
I think it would be very desirable to bear this thought in
mind and provide for such functions upon the request of the
interested Member. I see, for instance , in the American
amendment - with which we are in general agreement - that the
word "shall" was substituted for "may" and I wonder whether
that does not somehow weaken the Article or the Paragraph,
because if it is true that the matter does not concern the
I.T.O. alone, we want to make sure, on the other hand, that,
whatever concerns the I.T.O. , the I.TO. should have the
obligation to do it.
On the specific amendment of the Secretariat, I wonder
again whether it is advisable to insert the expression relating
to the Economic and Social Council, because, as it is an
operative paragraph or Article, it seems to us that it would
make it more involved. Unless this point is made clear to
me, I do not know whether or not it is necessary to consult
the Economic and Social Council on these specific projects.
CHAIRMAN (Interpretation): Gentlemen, we all agree
that Paragraph 2 of Article 11 is to be referred to the sub-
committee, but before doing so I would like to have the opinion
of the Committee on the two amendments already submitted -
that of Czechoslovakia, which I understand is only a drafting
amendment and should not take us a very long time, and that of
the United States, which consists of the substitution of the word S - 27 - E/PC/T/A/PV/2
"powers" for the word competencee". I would ask the Delegate
of Czechoslovakia if he has anything to say on. his amendment,
and then I will give the floor to the Delegate of the United
States.
H.E. Dr. Z. AUGENTHALER (Czechoslovakia) (Interpretation):
Mr. Chairman, I fully agree with the text submitted by the
Delegate of the United States.
Mr. J.H.G.PIERSON (United States): Mr. Chairman, with
regard to the word "powers" as a substitute for the word
competencee", I will not detain you long. Our thought there
was that the word "competencee" might be ambiguous; it might
refer to ability, in which case the word "resources" already
covered the idea and that if what we meant - and we believe we
did mean - was legal right, the word "powers" was the more
accurate word for expressing the idea that we all had in mind.
Our suggestion that the word "'may" be substituted for the
word "shall" arose out of our interpretation of the reply
that the Economic and Social Council gave to the question
asked by the Preparatory Committee following its London
meeting. P. E/PC/T/A/PV/2
28
The Economic and Social Council indicated that it was in difficulty
with the language which the Preparatory Committee had adopted in
London but it wished to have the Preparatory Committee take into
account in the final draft of this Article the powers and obligations
of other specialized agencies already in existence or to be estab-
lished. Our feeling is that if the word "shall" is retained there
is the danger that, by appeal to this Organization the exclusive
responsibility might be established upon this Organization to assume
all the duties in connection with advice concerning economic develop-
ment, and from that pointeof view it seemed to us that a more
accurate reflection of the situation as it has been left by the
reply of the Economic and Social Council would be given by the use
of the word "may".
Dr. P.S., LOKANATHAN (India): Mr. Chairman, we have some
difficulty in accepting the amendment proposed by the United States
delegation. As far as the substitution of the worde "powers"
for "competence" is concerned, we see no objection, but as regards
the change of the word "'shall" to "may", we feel some real difficulty;
beceuse although there will be the danger of making this obligatory
on the Organization, still we feel that if it is replaced by the
word "may" the Organization may not staff itself with sufficient
personnel to do the thing which we wanted it to do. That, combined
with the latest amendment proposed by the United States delegation,
namely the substitution of, the words: " .... may advise the
Member concerning its plans or arrange for the provision of such
assistance and assist in the procurement of appropriate engineering
and other technical assistance." These two taken together. in our
opinion, seriously detract from the positive functions which the
countries want the I.T.O to undertake. P. 29 E/PC/T/A/PV/2
In this connection may I refer to page 8 of the London Report
where the Committee that is responsible for the drafting of these
Articles definitely indicated the scope of the I.T.O. in respect
of these Chapters. It is there pointed out in Section, para-
graph 1:-
"From the point of. view of the purposes of the Charter and the
effective working of the International Trade Organization, there
are strong arguments for empowering. the Organization to perform
certain positive functions in relation to industrial development,
particularly in the provision of technical aid to members in the
formulation and execution of plans for development. "
In the seoond paragraph, the matter has been even more clearly
stated:
"This task, because of its essentially administrative character,
would be appropriate to a specialised agency....... Furthermore it
would provide the personnel of the Organization with continuous
experience of the positive as well as the protective aspects of
national development policies and so assist them in maintaining the
balanced point of view which will be essential to the wise exercise
of the discretions which the Charter entrusts to the Organisation."
We are quite aware, Sir, of the danger which you yourself just
now pointed out, of the misunderstanding which the existing draft
may lead to: that is to say, there might have been created in the
minds of several countries the idea that the I.T.O. is going to have
a large staff of engineering, technical and financial experts, who
try to replace their private firms, and so on.
I quite agree that we should. guard against that misunderstanding,
but it would be an error if we fall into the opposite extreme and
make this I.T.O. just a sort of advisory body which may or may not
undertake, at its own option, the functions which we want assigned
to it. P. 30 E/PC/T/A/PV/ 2
I think the drafters of these articles in London at least
believed that it was the duty of the Organization to have a nucleus
staff, an advisory staff, which would be able to talk matters in
hand. If any particular country has any definite plan, those
plans, at their own request, would be referred to this I.T.O., and
the I.T.O. should have a personnel to deal with those plans, to
consider them, to vet them, and, if they find that there is a
prime facie case for the going forward of those plans, then the.
I.T.O. should be able to procure the services.
There are really two facts. One is that the I.T.O. should
have some administrative personnel. If the United States amend-
ment means that it will not have that administrative personnel, may
I say, with all diffidence, that that is not the spirit in which
this Article was drafted in London. I personally was responsible
for at least a little of the drafting and we know what we were lead-
ing to Maybe that is not acceptable to this meeting but that is
another matter. But so far as the idea behind this Article is
concerned, we are quite certain that, while it is true we do not went
the I.T.O. to have all sorts of staff which are envisaged by the
Chapter, we did mean that the I.T.O. should have an advisory per-
sonnel which would be able to throw light upon the plans and to advise
countries on those particular plans. And if, as I say, the I.T.O.
felt that some help, some assistance, should be rendered, then the
I.T.O. should provide the necessary technical, engineering and other
assistance.
For these reasons, Mr. Chairman, I feel that, in the way the
United States amendments have been drafted, we should find it rather
hard to support them. J. 31 E/PC/T/A/PV/2
MR. J.G. TORRES (Brazil): Mr. Chairman, we appreciate the
explanation given to us by the United States delegate for this
substitution of "may". However, if it is true that we do not want
to create future difficulties and conflicts between the ITO and
other inter-governmental organizations, it is also true that
throughout the Charter we provide for consultation, and we
show that we are quite aware that this should not occur. I think
that we should not worry very much about this possibility,
especially because if we retain the second sentence of paragraph 2
that provides for this very same consultation, it will be taken care of
It is just a matter of writing it outin the proper way in a very
adequate manner.
CHAIRMAN: Monsieur Freaquet.
M. R.L. FRESQUET (Cuba): Mr. Chairman, we associate ourselves
with the words expressed by the delegate from England and the
delegate from Brazil, and consequently we do feel strongly tagainst
the substitution of the word "shall" for "may". We think that in
a way we have framed into words the idea that we tried to
express here, that is, if we say that the organization will act
within the powers and resources of the organization. We do not
see how, in that way, the action of the organization will go over,
the recommendation of the Economic and Social Council, and the
substitution of the word "shalll" for "may" may take completely out
of the text or the Article the security of the under- developed
countries who have always the advice and recommendations of the
ITO in such a matter. 32 E/PC/T/A//PV/2
Mr. PIERSON (United States): Mr. Chairman, although
Dr. Lokanathan has left the room, I should. like just very
briefly to comment on certain of his remarks, because I have
the feeling that actually there is not much - perhaps not any -
difference between his conception of the intent of this part of
the Chapter and that of my Dlelegation. We fully subscribe to the
idea that technical aid. should. be provided. by thoroughly
competent people, but the point that we have in mind is that
this Article should be drafted so as to avoid the implication
that the ITO itself would act as an entrepreneur, would. itself
construct public works and development projects. We believe that
technical aid. should be provided., but we want to make it clear
that the ITO would act in an advisory capacity. Now it may not
always be possible further ITO, even though it has personnel
working on economic development - it may not always be possible
for the ITO to have on the premises the engineering and other
experts who would go out and undertake a particular survey or a
particular job of assistance for a particular country. We feel
that it should be the function of the ITO to assist in the
procuring of the proper technical assistance of the proper
calibre to undertake advisory work. I think that leaves us in
a position that is very close indeed to that expressed. by
Dr. Lokanathan with respect to technical aid.
CHAIRMAN (Interpretation): The Delegate of the United.
Kingdom.
Mr. HELMORE (United Kingdom) : I wonder if I could. say a
word. on the question of this suggestion, that we should delete
" shall " and substitute "may". As the lndian Delegate read
two paragraphs of our London Report, I think perhaps it would be
fair to begin by reading the following paragraph, which said.: 33 E/PC/T/A/PV/2 .
"The Preparatory Committee is aware, however, that this problem
cannot be looked at solely from the point of view of the purposes
of the Charter. There are a number of inter-Governmental agencies
and organisations concerned with various aspects of industrial
development. These include" (and then follows a list of seven
of them) '- and. then the Report goes on, "The Preparatory Committee
assumes that the Economic and Social Council will shortly be
giving consideration to the question of the appropriate division
amongst various agencies of responsibilities not yet allocated
in the field of economic development, and to the means whereby
their activities can be adequately guaranteed"- and the decisions
of the Council on these questions must be based on other,
possibly wider, considerations than those that fall within the
competence of the Preparatory Committee.
Now I am sure the words of that Report were within the
knowledge of the Economic and Social Council when it considered
its reply to cur question, and. they have sent us a polite reply,
which does not tell us how to do our own drafting, but I am
assured by a Member of my own Delegation who was on the Committee
of the Economic and Social Council which drew up that reply, that
the only reason they did not suggest the substitution of "shall"
by "may" was that they felt it would. be more polite to leave us to
do it for ourselves.
If we leave in "shall" it seems to me inescapable that we
can have, and shall have, before long, over-lapping between the
agencies. It is quite true there is provision for consultation
between the agencies and with the Economic and Social Council
later on, as has just been said; but these words are extremely
direct. The Organisation, if a Member asks, has to take on the
job of advising. There is no let-out there. it is quite
G. E/PC/T/A/PV/2
mandatory on the Organisation, and if a particular Member
chooses to ask two Organisations, both of which have such words
in its Charter, then both the Organisations would. have to do
the advising and that seems to me to be rather a ridiculous
result.
On the other hand, I think we can all understand the
anxieties expressed by various Delegations about the apparent
weakness of using the word "may", and I wonder whether it would
be possible for the Drafting Committee to look out a form of
words which would express more closely what we really mean.
What we mean, I think, is this. That if people ask for advice
they ought to get it, provided that it is right for the idea
that we should give it, and that it is not for some other agency
to give it; and if it is possible to express that thought more
closely than by using the word. "may", which leaves the conditions
to be understood, perhaps we should be wise to think of it.
I have not really had time to work out the words, but
some thing like "The Organisation, upon the request of any Member.
shall, unless it determines that the matter falls within the
competence of another Charter or Organisation" - or whatever the
words shall be . Those words might help to solve the problem. ER
- 35 - E/PC/T/A/PV/2
Mr. J.G. TORRES (Brazil): I beg to be excused for coming
back on this matter for the third time. However, we would, of
course, welcome any new drafting that may make this paragraph
more explicit and that may do away with the fears of the
delegations who are concerned with the possible dangers of this
that
substitution. May I, however, point out that the words/follow
such expression already qualify the conditions under which the
Organization may give this advice because it says here that the
Organization, upon the request of any member, shall advise
such member concerning the latter's plans for economic development
within the powers and resources of the Organization. This seems
to cover already, the point, as we have already decided, that we
do not have any objection to finding a better drafting - at least
from the standpoint of the other delegations.
CHAIRMAN (Interpretation): I believe that we can consider
the discussion on this Article as closed and refer this Article
to the Sub-Committee. We pass on to Article 12. There are two
amendments, one presented by the United States delegation and one
by the Cuban delegation. Are these delegations willing to speak
on their amendments?
Mr. J.G. TORRES (Brazil) : Mr. Chairman, here again we are
in general agreement with the amendment of the United States. If
I may call the attention of the Committee however, to the question
of the title and if this is under discussion I would like to
.suggest whether we could word the title of Article 12, instead of
" Means of Economic Development and their Promotion", "Means of
Promoting Economic Development". I am not, of course, very well ER
E/PC/T/A/PV/2
36
versed in the English language, but it seems to me it accomplishes
the same purpose and possibly in a better wording. Regarding the
text itself,we would like to hear the explanation of the United
States delegate.
Mr. CLAIR WILCOX (United States): Mr. Chairman, the first
three suggestions for the amendment in the Article are formal.
The first is to add the words "among other things" because the
list does not seem to be entirely complete. It does not refer,
for instance, to such matters as fuel, power and transportation
and markets and so on. It is suggested that the word "advanced"
be dropped because we are not advanced technologists, but
need to know about elementary technology as well. The one
important suggestion here is the insertion of the words "on
equitable terms" which seems to us to make a stronger and more
specific commitment that would be involved in the absence of those
words. - 37 - E/PC/T/A/PV/2
CHAIRMAN: The Delegate of China.
Mr. J. T. CHWANG (China) asked permission to make a remark,
but later apologised for having misunderstood the number of the
paragraph which was under discussion.
CHAIRMAN (Interpretation): In this case, I think we could
refer to a sub-committee the two amendments on Paragraph 1.
The Delegate of Brazil.
Mr. J.H.G.TORRES (Brazil): Mr. Chairman, there is just
a minor point of drafting here. I wonder if this expression
"on equitable terms" would look more adequate after "obtaining."
The paragraph would then read: "Accordingly, the Members shall
impose no unreasonable impediments that would prevent other
Members from obtaining any such facilities for their economic
development on equitable terms, and shall co-operate," etc.
CHAIRMAN: Mr. Helmore.
Mr. J.R.C. HELMORE (United Kingdom): Mr. Chairman, on
the United States amendment, I only want to say that we agree
with the insertion of the words "among other things", but it
does seem to us to make the drafting very clumsy. If the
Drafting Committee would make the phrase so that it reads:
"depends, among other things," or, if the Committee would agree
to it, it would be better if the words could be "requires,
among other things."
I think I can refresh Mr. Wilcox's memory as to the
origin of the suggestion regarding the use of the word "personnel." S - 38 - E/PC/T/A/PV/2
There are two possible ones: one is that it was done
especially to get the United Kingdom Delegation into trouble,
because we have a Member of Parliament who always complains if
we use the word "personnel" in a document; the other is that
it is generally believed that managers do not work.
(Laughter).
Before you pass both amendments to the Drafting Committee,
Mr. Chairman, I wonder if we could have some oxplanation from
the Cuban Delegation of the amendment which appears at the
top of Page 5.
CHAIRMAN: Mr. Fresquet.
Mr. R. L. FRESQUET (Cuba): The Cuban Delegation thought
that the word "unreasonable", at least in Spanish, had such an
uncertain connotation that the idea would be better covered by
using this longer but more specific phrase, but it is the same
idea, I think.
CHAIRMAN: Mr. Wilcox.
Mr. CLAIR WILCOX (United States): With respect to the
amendment suggested by the Delegate for Cuba, if the word
"unreasonable" were to be dropped in favour of something more
explicit and detailed, I think we should have to have further
consideration. 1 recall, for instance, that in discussing this
matter in London, it was clear in the minds of the Delegates and
the Sub-committee that the word "unreasonable" would cover, for
instance, measures that were taken in the interests of national
security. I think probably the word "unreasonable" is a better
word than the substitution that has been suggested. 39
It seems to me that excellent suggestions have been
offered by the Dolegates of Brazil and the United Kingdom with
respect to changes in the drafting of this Article, and I shall
be happy to leave those matters to the Sub-committee without
further comment.
There is one matter, however, that does require some
comment. I should not like to let it stand on the record that
the Delegation of the United States was motivated, in introducing
the word "personnel", by any desire to provide embarrassment for
the Delegation of the United Kingdom. Our solicitude for the
mental composure of the Delegation of the United Kingdom knows
no bounds. (Laughter).
CHAIRMAN: The Delegate of South Africa.
Dr. W.C.NAUDE (South Africa): I take it, Mr. Chairman,
that that particular point is exhausted now (Laughter).
I am reminded, Mr. Chairman, by the discussion here on
the title of this Article by a suggestion made by the South
African Delegation in New York - it did not receive any popular
support - and that was that there is an advantage in the dropping
of titles of Articles from the whole Charter. I only hope the
Drafting Committee will bear that in mind. We could avoid an
awful lot of argument by simply dropping the titles of Articles
- I am not saying Chapters, but Articles.
I may add, Mr. Chairman, that we have a sacrosanct example.
In the United Nations Charter itself 'there are no titles to the
Articles.
E/PC/T/A/PV/2
S P. E/PC/T/A/PV/ 2
40
CHAIRMAN: (Interpretation): I think that it would be in
certain cases extremely easy to satisfy this requirement by dropping
all the titles.
Mr. J.G. TORRES (Brazil): Just two words to correct what I
think was an error in translation, and for the benefit of our fellow
French-speaking delegates. My second suggestion was that the
expression "equitable terms" came after "obtaining", and also I
understood Mr. Wilcox to say that he was favourable to suggestions
which the translator apparently overloaded.
Mr. L. GOTZEN (Netherlands): Mr. Chairman, on the Cuban amend-
ment, I was just wondering if the word "unnecessary' would not give
more short expression to the thought which moved the Cuban delega-
tion in submitting their amendment.
M. ;cri.-: (Interpretation):. Mr. Chairman, I see that in the
French text there is no translation of the word. "unreasonable ", or
"unnecessary", and I will recall the words of Mr. Wilcox when he
said that it might be necessary in some cases for some countries to
restrict the assistance to be rendered to other countries in view of
the obligation of international defence, etc. in agreement with the
Security Council. Therefore we wish to have also in the French
text something to qualify, as it is done in the English text.
CHAIRMAN (Interpretation) It seems to me, gentlemen, that
it is very difficult to go any further with this Article 12. You
will see that on paragraph 2 there are very r:merous amendments, two
of which propose to change drastically the drafting of the paragraph
as it stands - I mean the amendments of the delegations of India and
the United States: and further as in the United States draft the
question of investment and movement of capital is mentioned, a 41
question which we have reserved until tomorrow, I think it would be
wiser to reserve paragraph 2 and its discussion to tomorrow's
meeting as well.
Tomorrow Mr. Chundrigar, Chief of the Indian delegation who
has to leave Geneva, will make a statement on the views of his
delegation as to Chapter IV. We shell therefore begin our meet-
ing by his statement.
I think before we part it will be a good idea to appoint the
members of the sub-committee. We never know - they might wish
to start their work even tonight: In any case I cannot lose the
opportunity. I suggest that the sub-committee be composed as
follows: the United States, India, France, Chile, Australia,
the United Kingdom, and Brazil.
Does everyone agree with this proposal?
(The proposal was agreed).
I would ask this sub-committee, when the time comes, to call
upon another French speaking delegate, other than a representative
of France, to assist in putting into shape the French text.
Mr. WYNDHAM WHITE (Executive Secretary, Preparatory Committee):
Mr. Chairman , following the intervention by the delegate of France
at the beginning of this meeting on the difficulty which was being
experienced by certain delegations to provide representatives at
the same time for Charter discussions and for Tariff negotiations, I
have been in touch with the Chairman of the Charter Steering
Committee and the Tariff Working Party, and they have agreed to
hold a joint meeting tomorrow afternoon. However, I think that
that meeting can hardly yield the best results unless the delega-
tions which are experiencing these particular difficulties could
let the Secretariat know by noon tomorrow what their difficulties
E,/PC/T/A/PV/2
P. 42
are, so that we can make arrangements for these to be brought before
the Joint meeting and in appropriate cases for those delegations to
present their views to the joint meeting and to discuss their
difficulties with the two steering Committees.
CHAIRMAN (Interpretation): Tomorrow morning, after the state-
ment by the Chief Delegate of India, we shall study the amendments
to this Article. We shall, however, leave over the amendments
dealing with the investment and movement of capital which will be
discussed in the afternoon.
The Meeting is adjourned.
(The Meeting rose et 6 p.m.)
E/PC/T/A/PV/2
P. |
GATT Library | cr092xr5418 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Second Meeting of Commission B held on Thursday, 29 May 1947, at 3 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, May 29, 1947 | United Nations. Economic and Social Council | 29/05/1947 | official documents | E/PC/T/B/PV/2 and E/PC/T/B/PV/1-3 | https://exhibits.stanford.edu/gatt/catalog/cr092xr5418 | cr092xr5418_90250065.xml | GATT_155 | 10,272 | 62,195 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL RESTRICTED
ECONOMIQUE E/PC/T/B/PV/2
ET SOCIAL 29 May 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
SECOND MEETING OF COMMISSION B
HELD ON THURSDAY, 29 MAY 1947, at 3 p.m. IN
THE PALAIS DES NATIONS, GENEVA
HON. L. D. WILGRESS (Chairman) (Canada)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office
Room 220 (Tel. 2247).
NATIONS UNIES G.
2 - E/PC/T/B/PV/2
CHAIRMAN: The Meeting is called to order.
Before we adjourned for lunch the Commission had a very
thorough discussion of the question of the inclusion or the
exclusion of services in the scope of the Draft Charter. We
stopped at Chapter 6. The way the situation appears to the
Chair is that there are three propositions now before us.
The proposition which has been before the Preparatory
Commission for the longest period of tile is the reservation
of certain Delegations who wish to have services included in
Chapter 6.
The next proposal in point of time is that of the United
Kingdom, who wish to have services excluded from the scope of
Chapter 6. We have also this morning listened to the proposal
of the Delegation of India, who wish that services should
neither be specifically included nor excluded. If, therefore,
these propositions can be put to a vote I propose we should
first of all vote on the proposal of the Delegation of India;
secondly I propose that we vote on the proposal of the Delegation
of the United Kingdom; and then, if neither of these are
carried, on the proposal of the Delegations who are proposing
that services be specifically included.
But before putting the matter to the vote I would like to
know if any Delegation has any proposal to put forward which
may be a means of reaching a satisfactory settlement to which the
majority of Delegations can subscribe.
E/PC/T /B/PV/ 2 E/PC/T/B/PV/2
CHAIRMAN: The Delegate of Cuba.
Dr. Gustavo GUTIERREZ (Cuba): Mr. Chairman, after
having a talk with some of the Delegates who presented a
dissenting view of the criterion of the British Delegate
this morning, we wondered if it would be a wise procedure to
start now with a discussion of Chapter VI following the
Articles in the order in which they are, beginning with
Article 39 and eventually arriving at Article 45; and we will
try in the meantime to draft a formal paragraph that
incorporates the views of all those participating in the
matter, not only of his side of the table but also those of
the Delegates of India and Great Britain. In that manner
we think we can expc~iite the work of the Commission and in
the meantime try to find a way of satisfying every one of the
views expressed here this morning.
CHAIRMAN: The Delegate of the United States.
Mr. Robert P. TERRILL (United States): Mr. Chairman,
I was about to make a suggesstion similar to that which the
Cuban Delegate has mado. I think.that before any opinions
are d definitely carystallised here by way of a vote, the situation
should be clarified. Some of the issues, to say the least,
are not at present crystal clear to us as to the meaning of
these alternatives.
I would like to suggest that the Commission considers
the possibility of approprietely modifying the original
provision contained it tha United States suggestions for the
Draft Charter in Article 40. Those provisins, together with
the suggestions, perhaps, of the Indian Delegate, and the
V. -4 -
E/PC/T/B/PV/2
Delegate of the United Kingdom, might form an appropriate basis.
I need hardly add that this would not be an appropriate task
for Commission B as a whole, but would be more appropriately
assigned to a sub-Committee as its first order of business.
CHAIRMAN: The Delegate of the United Kingdom.
Mr.. S.L. HOLMES (United Kingdom): Mr. Chairman, I was
very interested to hear the proposal of the Cuban Delegate,
and I think that it probably holds the possibility of a
settlement of this important question by agreement. I
confess to a lively curiosity as to the exact rabbit which
M. Gutierrez is going to produce out of his hat: but I still
think that it is certainly not beyond combined ingenuity basing
ourselves on the various proposals that have been made, and
I think we might also arrive at an arrangement on the text
of our own proposed revision of Article 45.
I had felt before that the matter was perhaps not quite
appropriate for sub-Committee treatment, as there seems to
be rather a wide gap between us, but I myself would be happy
to fall in with the suggestion made by the Cuban Delegate
that we should proceed with the other Articles and. allow
ourselves a little time to see what could be produced by way
of an agreed text for Article 45.
CHAIRMAN: It has been proposed by the Delegate of Cuba
that this matter be deferred until we come to consider Article
45. To that proposal an amendment has been made by the
Delegate of the United States, seconded by the Delegate of the
United Kingdom, that this question of the inclusion or exclusion
of services be referred to a sub-Committee. I will first
put to the Committee the proposal of the United States Delegate
that this question be referred to a sub-Committee. Does
that meet with approval? V. E/PC /T/B/PV/2
The Delegate for New Zealand.
Mr. G. LAURENCE (New Zealand): Mr. Chairman, in the
event of the subject being referred to a sub-Committee, would
those countries who are not represented on the Committee have
access to the proceedings of that Committee, and if desired,
have the opportunity to present a statement to the sub-Committee?
CHAIRMAN: It is the, same procedure as in the case of
the sub-Committee of Commission A. The Delegations can
express their desire to be heard, and they can be invited to
express their views.
I take it that the proposal to refer this matter to a
sub-Committee is approved. I would, therefore, like to
nominate now the following Delegations to constitute the sub-
Committee, the Delegations of Cuba, Czechoslovakia India,
the Netherlands, United Kingdom and the United States. If
the composition of the sub-Committee is approved, I would
suggest that the sub-Committee meet tomorrow morning whilat
Commission A is meeting, so that they can have their first
meeting and deal with this subject before we have to refer
other questions to a sub-Committee.
- 5 - ER
E/PC/T/B/PV/2
Mr. C.H. CHEN (China) The Chinese delegation wishes to
make a suggestion to the Sub-Committee.
CHAIRMAN: I am sure the view of the Chinese delegation will
be taken into account by the Sub-Committee, and the Chinese
delegation will be invited to express their suggestion.
We now pass to the next point on our Agenda. On page 2 of
document W/132 we find that there has been a reservation regarding
compulsory
/registration of restrictive businesspractices. This reservation
is made by the delegates of Brazil and Chile, seconded by the
delegation of Czechoslovakia. I propose, however, that we discuss
this subject when we come to paragraph 1 of Article 39, because the
Brazilian delegation have already submitted their amendment
regarding this particular subject. We will then take up paragraph
1 of Article 39. There have been two proposals in relation to
this paragraph. The Canadian delegation have proposed the
revision of this paragraph, and so have the delegation of Belegium.
Are there any delegates who wish to speak regarding these two
Proposals?
Mr. F.*.. McGREGOR (Canade): Mr. Chairman, the delegates will
observe that the proposals we have offered in connection with
Article 39 paragraph 1 are more or less drafting chances. I will
call attention to two or three proposed alterations that are not
purely drafting ones. On the first page of the Canadian document
you will see that we have attempted to reorganise paragraphs 1, 2
and 3, and for this reason paragraph 1 in the New York draft
includes reference to the type of practice - that is, practices
which restrain competitive access to markets, or foster
monopolistic control. The next part refers to the harmful effects. ER
7 E/PC/T/B/PV/2
Then later, in paragraph 2 (a) you have a reference to the type of
organization - "the public or private commercial enterprises" -
but in between 1 and 2(a) you have paragraph 2, which says that
practices that are referred to here shall be subject to
investigation. That is the vital part of that second paragraph.
What we have attempted to do here is to put, in paragraph 1, a
statement that members shall take appropriate measures to prevent
business practices affecting international trade. These are the
words that are used here: "whenever such practices (a) limit
access to markets or foster monopolistic control or otherwise
restrain competition in international trade ... etc." We could
keep the same order: "which restrain competition, limit access
to markets, or foster monopolistic control", and we think it is a
neater way of doing it. S - 8- E/PC/T/B/PV/2
The next are two types of effects that it is desired to
prevent. The third is when they are engaged in or made
effective by one or more public or private commercial
enterprises. That is an exact transcript of the rest of
that paragraph except that at the end we say "and if such
commercial enterprises", and there we take the language of
Paragraph 2(b) - "if such commercial enterprises, individually
or Collectively, substantially control or influence trade
among two or more countries in one or more products."
I should have inserted a footnote of comment after the
changes suggested at the end of that paragraph. The
suggestion that the words "possess effective control of"
be replaced by the words underlined on that page, "sub-
stantially control or influence" is made in order to make
it clear that an international combination or monopoly can
be subject to investigation, even though it does not have
complete or absolute control of world trade.
Effective control could be interpreted as complete
control. The word "effective" does not limit the word
"control"; it rather expands its meaning and suggests an
overall domination that could be possessed by very few
combinations of commercial enterprises engaged in inter-
national trade. If I were to say that I had control over
the Delegate for the United Kingdom - I could not possibly
have, of course; he is uncontrollable - it would mean a
less degree of control than if I said I had effective control
over him.
We have suggested also "two or more countries" instead of
"a sumber of countries." One country should have facilities
to safeguard its interests from the operation of a monopoly S - 9 - E/PC/T/B/PV/2
in another country. If you have to prove a number of
countries, I think you have to prove too much. It may mean
world-wide control and that, I think, was not the idea
generally in mind at our London Conference.
I submit this very modestly for the consideration of
the other Delegations.
I am not too happy about "substantially"; I am not
happy about "effective"; I um not happy about "influence",
but I want to bring up the question of changing the words
"possess effective control" to something that would be more
satisfactory.
Then as to the next paragraph - Paragraph 2, which is the
one that now appears as Paragraph 3 - I think it is desirable
to place it next to the types of practice that we are
declaring to be undesirable.,
CHAIRMAN: I would prefer, Mr. McGregor, that you
confine your remarks to Paragraph 1 at the present time.
We can deal with Paragraph 2 at a later stage. P. E/PC/T/B/PV/ 2
CHAIRMAN: As the Canadian delegate has observed, most of
the changes which he proposed are matters of drafting, but there
could be certain points of substanc which arise out of the Canadian
proposal and also out of paragraph 1 of the text of the New York
draft. If any members would wish to discuss questions of substance
with relation to paragraph 1, I should be glad if they would indi-
cate their desire.
The delegate of the United States,
Mr. ROBERT P. TERRILL (United States): Mr. Chairman, I
rather regret that the Chair considers it necessary to confine the
discussion on the Canadian amendment to Article 39 to paragraph 1.
My reason f or that is that, as I see this re-drafting, it consists
of substituting a completely new framework for the entire Article
and at first sight (we have had only four or five days on this ; we
have no clear draft as yet) :.t is very difficult to road the
present draft. Nevertheless, I think it has some very ingenious
and important advantages to offer. The former, the original
Article, is highly confusing when you start to analyse it. Para-
graph 1 of the original draft contains a general and very sweeping
obligation on the members. The second part of that Article con-
sists of paragraphs 2 and 3 and relates to the procedures which the
Organization will undertake by way of investigation upon complaints,
but the second part, consisting of those two paragraphs 2 and 3,
is in no way clearly related to the first part, that is to the first
paragraph. This has been a source of constant confusion to all
of those -b whom we in the United States have tried to explain this
Article and we think we have become somewhat confused ourselves, but
we di.4-~.t: have the wit to recast the Arti-:,;tin proper form to pro-
vide continuity in all the paragraphs so that they clearly related
to each other and so that the obligations of the Organization were
parallel to those of the Members concerned.
- 10 -
- I ----- - 11 -
P. E/PC/T/B/PV/2
Therefore it seems to me that the real question to decide is
whether this re w framework which includes all the paragraphs of
Article 39 is a suitable vohicle, or, at least, is preferable to the
framework that we originally had.
I might add, by way of a side-remark that may not be entirely
relevant, we are not wholly convinced that the obligation has not
been somewhat watered down in the process of this revision, but we
could take that matter up when we come to it in due course.
CHAIRMAN: I very much regret that it was necessary for me to
interrupt the delegate in the course of his discourse, but I felt
that he was going into details in his proposed relation to paragraph
2 and I wished him to confine his remarks for the present to para-
graph 1.
I realise, however, that the Canadian proposal goes much beyond
this and was really a rearrangement of the whole article. If the
Canadian delegate would like to add anything to what he has said
with regard to the purpose of the rearrangement I will be very glad
to give him the floor now.
Mr. F.A. McGREGOR (Canada): Merely this, Mr. Chairman:
that in paragraph 1 - this may be a repetition, but it is clear
that paragraph (a) relates to the type of practice; (b) to the
effects, (c) to the kind of people who are engaged in the practices.
Then in paragraph 2, formerly 3, we would amplify or give
examples of the type of practice that is referred to in 1(a) of this
draft: limit access to markets and otherwise restrain competition.
We would say that the practices referred to in paragraph 1 (a) shall
include the following: ( it is not intended that these shall be the
only practices but they shall include these.) P. - 12 - E/PC/T/B/PV/2
Then in paragraph 3 we take over paragraph 2 of the Now York
draft. I have to tried to get rid of what we thought of as a rather
legalistic phrase without limiting the generality of paragraph 1
and substitute for it a direct statement: "Any practices which
are alleged, under Article 40 ...... "( that means that they must
be practices which members or other parties are entitled to com-
plain about). " Any practices which are alleged
under Article 40, to be as described in paragraphs 1 and 2 of this
Article shall be subject to investigation, in accordance with the
procedure regarding complaints......" - 13 -
E/PC/ T/B/PV/ 2
Mr. F.A. McGREGOR (Canada) (Contd.): The next part of it has
been stolen from the United States, and perhaps it might be better
if the United States would speak about their own property, except
that I have added to their phrase in the second underlined line
"whether these or related practices are as described", when we
read that these practices shall be subject to investigation in
order that the Organization may determine, in any particular
instance, whether these or related practices are as described in
this Article.
I think it is desirable to have the Organization empowered to
examine related practices when they are investigating practices
that have been complained about. If the complaint is about one
particular practice and in the course of the investigation the
Organization observes that other related practices have been
engaged in, it surely should not be necessary to go through all the
procedure, to go back to the complainee to ask him if he would like
to have that included too. The Organization should be empowered
to carry on with that.
Those are all my comments on that paragraph.
Mr. Chairman, in spite of my last sentence, may I make a
comment on line three of page 2 which suggests that if this wording
is adopted it might be bettor to change the words "individually or
collectively" and to put them after the word "if" to read:
"if individually or collectively such commercial enterprises
substantially control. ". One of the delegates has suggested
that it is bad musically to say "individually or collectively
substantially".
CHAIRMAN: Are there any other comments with regard to the
Canadian proposal?
J. J.
- 14 -
E/PC/T/B/PV/ 2
MR. W. THAGAARD (Norway): Mr. Chairman, on behalf of the
Norwegian delegation I will Gtrongly support the amendments proposed
by the Canadian delegation. It seems to me that these amendments
givv the Article as a whole a much better form than in the Draft
Charter, and I will especially stress the point that these
amendments make it quite clear that the International Trade
Organization should limit its activities in these fields to the
control of real international trusts and cartels. It means that
the Organization shall not interfere with Nember countries in
internal trust and cartel policy, even if some of the national
cartels might have some slight influence on the international trade.
The condition is that the cartels or trusts which substantially
control or influence trade among two or more countries shall be
a substantial control or influence. It seems to me that that is
the right way to go.
I shall not prolong the debate, it seems to me that the
Canadian delegate has very thoroughly given his reasons for these
amendments which are proposed.
CHAIRMAN: The delegate of Belgium. - 5- E/PC/T/B/PV/2
Mr. THILTGES (Belgium) (Interpretation): Mr. Chairman, in
the opinion of the Belgian Delegation, although certain proposals
might meet with the agreement of the Commission and. ameliorate
the Draft (and I am speaking of the Canadian proposals), they
still present an aspect which somewhat frightens the Belgian
Delegation, because it might lead to a new beginning of discussions
which have been so difficult to conclude. Indeed, the Canadian
proposal contains the engagement for the Members to take steps
when certain practices are applied, oven if these practices do not
lead to effects which may bear a certain prejudice. This is
contained in Article 39, paragraph 1 (a).
Now the second point which gives rise to doubts are certain
precisions which are brought in by the Canadian Draft and which
concern effective control. The Canadian proposal. suggests to
introduce the words "to an appreciable measure"; but this is not
fully satisfactory. For instance, a firm which controls a certain
trade - let us say to 20 per cent. of its complete extent - controls
the trade in an appreciable measure, but not completely, and it
does not exercise the uttermost influence on this trade, although
the control is appreciable.
Furthermore, the.Canadian Draft contains the deletion of any
reference to at least one objective of the Charter. This is not
specifically alluded to. However, I would like to mention it,
because this gives me the opportunity to explain the Belian
Amendment. Article 39 contains a reference to Article 1, and
Article 1 enumerates the various aims of the Charter. Now many
countries have proposed either the deletion or the omission or
the addition of certain aims of the Charter. A Delegate has
proposed a specific addition of a certain aim of the Charter; but
I would call your attention to the fact that the text of Article 1 G. - 16 - E/PC/T/B/PV/2
has not been discussed. Article 1 has not been yet fully
discussed, and until the text is fully established, it seems to
us impossible to establish a certain order of priority. It seems
to us impracticable to establish an order of priority of the
aims of the Charter - of its objectives - until those objectives
are fully determined.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. HOLMES (United Kingdom): Mr. Chairman, like some previous
speakers, I should like to say that in general the Canadian re-
arrangement of the Article seems to us to have a good deal of
logic and convenience, but I do not intend to be entirely
intimidated by Mr. MacGregor, and I would feel with our Belgian
colleague, for instance, that we should have to look rather
carefully at some of the Amendments of wording which the Canadian
Amendment introduces - that is apart from the general structure.
I would feel, for instance, much sympathy with what the
Belgian Delegate has said in regard to substantial control or
influence. We should think that in attempting, perhaps, greater
precision, the Canadian Draft really fails in its object. Would
not, for instance, the word "influence" lead to a good deal of
discussion? It is not even clear, according to the words, whether
the word "influence" is governed by the word "substantially".
So, as Mr. Macgregor explains, he has a' -ered "a number of" to
"two or more countries". Now unless we are going to spend a
very great deal of time on this revision, we should feel that
there was much to be said for adhering as closely as possible to
the text established in London. One could point out that two is
a number - more than two is a number - but is that alteration
really necessary? 17 -
G E/PC/T/B/PV/2
I had also something to say about the proposal 1 (a) of the
Canadian text. Here I think Mr. MacGregor indicated that he would
be prepared to revert to the original order; perhaps he would also
which
be prepared to drop the word, otherwise has now crept in - a
word which, I think, does imply a certain judgment and really adds
very little to the sense of the text.
I have also a point to make on paragraph 2, or rather paragraph
3 of the Canadian text, but perhaps that can wait for the moment. - 18 -
V E/PC/T/B/PV/2
CHAIRMAN: The Delegate of South Africa.
Mr. A.P. VAN DER POST (South Africa): I will not detain tho
Commission long. In general, I think that tho Canadian proposal
is to be welcomed as a great improvement on the New York Draft, it
makes for clarity; but we have, I find, a number of other amendments
to consider on the New York Draft Article 39. It is very difficult
to consider these and give fair treatment to these various amendments.
We seem to be more or less generally agreed that the Canadian text
is an improvement on the original, but we have got to discuss this
on the basis of the original, and I would suggest for the consider-
ation of the Commission that before entering into the merits of the
wording and so forth, we might accept the Canadian draft as a basis
for further discussion in that order, because in principle it does
not affect the proposals of 39, but it is bettar to relate the
rest of the discussion and the other amendments to a basic draft,
otherwise we have to relate the Canadian draft and the other
amendments to the original Article 39. If the Commission would
agres that the Canadian order is a better order, than the original
one, I suggest that we night uize that a basic for discussion.
CHAIRMAN: The Delegate of Brazil.
M. Monteiro de BARROS (Brazil) (Interpretation): Mr. Chairman.
in principle the Brazilian Delegation is inclined to accept the
text submitted by the Delegate of Canada. as a basis for discussion
instead of the New York Draft; but in this connection tho Brazilian
Delegation would like to make two comments.
Our first remark concerns economic development. Already in
London we have introduced our amendment in this connection, and we
suggested the explicit mention of the economic development in - 19 -
V E/PC/T/B/PV/2
paragraph 1 of Article 39. However, at that stage it was
pointed out that economic development was anyway implicitly
included since it was proposed to mention it explicitly in
sub-paragraph 3 of Article 1. We discuss now Article 39
before the draft of Article 1 is definitely established, and
therefore we would like to mention again our desire to see an explicit
reference to the economic development of the less industrialised
countries, if this economic development is not explicitly mentioned
in the final draft of Article 1. Our second comment conccrns
public enterprise. We have formulated a reser;ation in London
and the Brazilian Delegate still fully abiUes by this reservation.
CHAIRMAN: WIth regard to: the remarks of the Brazilian
Delegate, I would like to point oat that for the purposes of our
discussion of Chapter VI, we have to assume that Article 1 will be
accepted in the form in which it is now. As the Brazilian Delegate
knows, it will be Home little time before the preparatory Committee
comes to consider Article 1. Therefore, for the purposes of our
discussion, we have to take it in the form in which it is in the
Report of the Drafting Committee. If, however, later on thers
should be a change in Article 1, we can always come back to
Article 39 and make the appropriate changes or consider the
appropriate changes, suggested by the Delegate of Brazil. - 20 -
E/PC/T/B/PV/2
M. LECUYER (France) (Interpretation): The representative of
Canada, Mr. McGregor, said modestly that he wishes to present some
observations to the Commission. It seems to me that Mr. McGregor
should not be so modest - in fact, the proposal submitted by the
Canadian delegation is a complete structure in itself, worked out
very carefully from the judicial point of view, and it proposes in
fact, not only drafting changes, not only changes in the form of
the Article, but also some changes in the substance of these
provisions. It seems to me that it would be premature now to
discuss the substance of the Canadian proposal, but in view of the
remarks made by the representatives of Belgium and the United
Kingdom, I should like to draw the attention of the Commission to
certain risks which we would run if we accepted the Canadian
proposal as such. For instance, with regard to the point
concerning the various restrictive practices, there may be some
additional consideration to be presented, and if you take the
Canadian draft as such, we might re-open the previous London
discussions. I thought at first sight that we might take up
for instance paragraph 1 of the Canadian proposal, but I
discovered immediately that paragraph 1 was closely linked with
paragraph 2, paragraph 2 with paragraph 3 and that in fact, as
soon as one begins to analyse the Canadian proposal, not only the
whole Article 39 but indeed the whole Chapter VI is involved.
This goes to show how carefully we should proceed in examining the
Canadian proposal. Mr. McGregor did the work of a distinguished
legal expert, and it seems to me that an element of art is present
in his work, and I should. like to compare it with the work of an
architect. It reminds me, for instance, of a considerable work ER
1 E/PC/T/B/P?V/2
which was undertaken at the Paris exhibition of 1937. At this time,
as it is well known, the old Palais de Trocadero was entirely
transformed and out of the building which was constructed in
accordance with the style of 1860, came out a brand new palace,
although some parts of the previous structure remained. In fact,
changes were operated which went very deeply in the structure of
the building. Therefore, I think that the Canadian proposal, which
may be compared to such an artistic work, should be considered very
carefully. As the representative of the United States said, the
text has been submitted to us very recently, and there is another
consideration which was not mentioned by the United States
representatives, and that is that we have also before us a United
States proposal which, on some points, deals with the same question
as the Canadian proposal. Therefore, I think that we should study
them with all the care and attention they deserve to confront the
views in order to try to reach a final and satisfactory solution,
but I think that it would be difficult to take the Canadian
proposal as the basis of our discussion before we have studied the
question of the differences which it might contribute from the
outset as compared with the original text, and I submit that
question to the Commission. 22
CHAIRMAN: It has been proposed by the Delegate of
South Africa that we should take the Canadian proposal as the
basis of our discussion and I take it that the Delegate of
France is of tho view that we should consider the text as
given in the New York Draft as the basis of our discussion.
The Canadian proposal has had very general support
regarding it being an improvement in arrangement. Certain
Delegates have expressed doubts as to certain changes in
substance. I think, therefore, it is the feeling of the
Committee that the Canadian proposal, along with the proposal
submitted by the United States and Belgium in regard to Article
39, should form a proper subject for detailed study by the
Sub-committee.
Therefore I would like to propose that in due course
these provisions proposed by the Canadian Delegation, the
Belgian Delegation and the United States Delegation be
referred to the Sub-committee, but before making that proposal
I would like to have the feeling of the Committee as to
whether we should proceed now on the basis of the original
New York Draft in considering the other amendments which
have been proposed, or whether we should take the Canadian
proposal as a basis for our discussion.
Does the South African Delegate still wish to sustain
the proposal that we take the Canadian proposal as a basis
for discussion?
MR. A. P. VAN DER POST (South Africa); Mr. Chairman,
I do not see that there is much difference in principle
between the Canadian proposal and the original New York Draft
and I would suggest that we take the Canadian proposal as the
basis,
E/PC /T/B/PV/2
S E/PC/T/B/PV/2
CHIRMAN: Is that agreed?
The Delegate of France,
M. LECUYER (France) (Interpretation): Mr. Chairman,
it seems to me advisable to avoid taking as abacis for dis-
cussion a proposal which has not been fully studied here and
which, on the other hand, is somewhat parallel with a proposal
submitted by the Delegation of the United States. As you
have pointed out, both proposals could be considered on their
merits and conciliated within the Sub-committee, but it seems
to me that the text established in New York could usefully
be taken as the basis for discussion, with any modifications
which will be brought later during the course of the discussion,
modifications which are necessary and which we all recognise
as such after studying the American and Canadian proposals.
It seems to me that the New York text could, for the
time being, be taken as the basis for discussion without
prejudice to any re-organization of the text which may prove
necessary during the course of the consideration of this text,
CHAIRMAN: The Delegate of the Netherlands.,
Dr. P.. LEENDERT (Netherlands): Mr. Chairman, it is
not very clear to me which proposal is to be taken as the basis
for discussion, and we may not be in the technical sub-committee
which may tackle the subject. I do think, however, that there
are one or two points of fundamental interest in the new Draft
proposed by Mr. McGregor which have a much wider importance
than merely a matter of drafting and wording,
Is it your pleasure that these things should be discussed
here now or left to the Technical Sub-committee, in order to be
discussed later on in full committee?
S
23 S 24 E/PC/T/B/PV/2
CHAIRMAN: I do not think the details of the Canadian
proposal are suitable for discussion in full committee, They
had much .better be considered by the Sub-Committee. But any
questions of principle arising out of the proposal would be
a proper subject for comment in the Committee.
I .ust confess that I have a great deal of sympathy
with the point of view just expressed by the Delegate of France,
and that is that we should stick to the New York Draft as the
basis of our discussion, as that is the Draft which was
approved for submission to the Preparatory Committee, and
that would be without any prejudice to the Canadian proposal,
because any amendments we might discuss on the basis of the
New York Draft could later on be fitted into the Canadian
proposal, for, as the Delegate for South Africa has mentioned,
there is really no particular difference in essentials
between the two proposals; it is more a matter of re-arrangement. P 25 E/PC/T/B/PV/2
Has the delegate of South Africa any solution?
Mr. A.P. van der POST (South -Africa): Yes, Mr. Chairman,
if you are willing: I would only point out that so far as have
not discussed the original text at all.
CHAIRMAN: The procedure that we propose is to take the
text as it is and consider any amendments or reservations. We
have before us the Canadian proposal which is an amendment to
Article 39 I think we can agree that the Canadian proposal is a
subject better suited for disoussion in a Sub-committee than a full
Commission.
Unless any delegations have any further comments of a general
charactor to make with regard to the Canadian proposaI I propose that
it be left over to the and of today's Session when I propose it be
referred to sub-Committee.
Mr. A.P. van der POST (South Africa): Mr. Chairman, when I
spoke reoently it was only with the intention of raising a question
of procedure; it was not a question of examining principle and I
do not intend to do so now as this will go to a sub committee.
I merely want to explain that in principle, too, the Canadian order
of the draft t is welcome to us. There may be perhaps some parts of
it wiih which we do not agree altogether, but 1 would point out, for
example, that The wording "two or more" is welcome to us because it
relieves two of our doubts as to whit the meaning of the word
"monopolistic" is, as to how far that does extend. This clearly
indicates that the Article has r reference to international cartels,
and not to action which may be taken in the local interest of a cer-
tain industry. P. 26 E/PC/T/B/PV/2
CHAIRMAN: Are there any other comments. with regard to the
Canadian proposal and the Belgian proposal in relation to paragraph
1? If not, we will then pass on to paragraph 2.
On page 3 of document W. 132 there is a reference to words in
paragraph 2 which were inserted by the Drafting, Committee. Those
words are: "in accordance with the procedure with respect to com-
plaints provided by the relevant Articless in this Chapter." Those
words were inserted on the motion of the delegate of France by the
Drafting Committee in order to make it clear that the investigation
procedure provided for in Article 40 should only follow upon specific
complaint in accordance with Article 40 and not as a consequence of
steps undertaken by the Organization in accordance with Article 41.
The Drafting Committee was not certain whether this condition con-
stituted a substantive change or not, because it limited the
authority of the Organisation to investigate restrictive business
practices on its own issue.
The Drafting Committee decided to include the sentence but to
refer the question of any substantive change to the second session
of the Preparatory Committee.
It would now like to know the sense of the Commission as to
whether this change which has been adopted by the Drafting Committee
may be approved.
Mr. S.L. HOLMES (United Kingdom): There is only one point as
regards Article 1 which we have not in fact touched on, I think.
It may be that it is your intention that a sub-committee should deal
with it. It is one of the proposals by the Belgian delegate in
W. 130, at the bottom of page 2 of W.132. J. . 27 E/PC/T/B/PV/2
CHAIRMAN: Yes, I-mentioned that. In dealing with
paragraph 1 I said that that proposal of the Belgian delegation was
to be referred to the sub-committee.
There being no objections, I take it the changes made by the
Drafting Committee are approved,
We have a reservation by the United Kingdom with regard to the
insertion of the words "public or" in paragraph 2(b). Does the
United Kingdom still wish to maintain that resolution?
Mr. S.L. HOLMES. (United Kingdoma): Mr. Chairman, I think it
is paragraph 2(a), is it not?
We should feel it very difficult. to. withdraw our
reservation on this point. We feel that to include these new
words (that is to say, new in the London text) would probably lead
to confusion, and we cannot feel that anyone would be in any way
injured if the London test is reverted to. Article 39,
paragraph 1 as it stands will give sufficient pretaction to Members
against the possible conduct of a public monopoly acting
independently. In a case of that sort the proper course for
Members would be under Article 35.
We quite appreciate that here logic may demand that everything
is put on the same level, but we feel that this is one of the cases
where logic can be a little misleading, and the question is really
fully covered by Article 35 which allows for a general complaint
against nullification.
CHAIRMAN: Reservations have also been made regarding the
inclusion of "public commercial enterprises" in paragraph 2(a) by
the delegates of Brazil and China. Do these delegations still
wish to maintain these reservations? 28 E/PC/T/B/PV/2
M. T.M. de BARROS FILHO (Brazil) (Interpretation):
Mr. Chairman, the Brazilian delegation is not in a position to
withdraw its reservation.
MR. C.H. CHEN (China): Mr. Chairman, the Chinese delegation
wishes to say that their reasons are very similar to those given
by the delegate of the United Kingdom, The United Kingdom
reservation is to omit these words "public or", while our reservation
is to omit three words "public commercial enterprises", because
we are thinking that there are three Articles dealing with state
trading under Section E of the same Charter, so it is quite easy
for us to have any other special measures in Articles 31, 32 and
33 dealing with State Trading. We have laid down this principle
to admit of state enterprise and also any other measures, whish
is quite sufficient for the interests of other nations concerned.,
so we think it is quite unnecessary to include "public commercial
enterprises" in this paragraph.
CHAIRMAN: The delegate for Czechoslovakia.
J.
r IPr /r Pu I G.
29 E/PC/T/B/PV/2
Mr. MINOVSKY (Czechoslovakia) (Interpretation): The
Delegation of Czechoslovakia, Mr. Chairman, wishes to support those
statements and shares the views of the Delegates of the United
Kingdom, Brazil and China.
Mr. TERRILL (United States): The United. States Delegation
expressed its views on this subject at some length in London.
I refer the Commission to those views. The substance of them
was that if public enterprises were not subject to this Charter,
we would in fact be setting up two standards of commercial morality
in world trade. We feel that it would be a distinctly backward step
in the Charter to change the text as it now appears. It would
have unfortunate psychological consequences in the first place,
and in the second place, we agree it would be incorrect in
principle. Our reason for that, I think, is that Article 35
relates to the impairment of the Charter as an act for which a
Member Government is responsible. It was argued in London at great
length and. very conclusively by many Delegations whose countries
operate industry wholly or partially on a State basis that these
enterprises which had been nationalised or were otherwise under
public control were operating in accordance with commercial
principles.
Now if that is so, I hardly believe that the contention which
the United Kingdom Delegate has brought forward, and which was
aupported by other Delegations, can be sustained.
As to the State-trading section, to which the Delegate from
China referred, only Article 31 is of significance, I think, for
this particular point which is at issue.
Mr. MINOVSKY (Czechoslovakia) (Interpretation): If we want
to avoid a double morality we must also alter the Article which G.
30
E/PC/T/B/PV/2
concerns State enterprise, since they are subjected to different
regulations than a private enterprise, Therefore, if we want to
avoid a double-deal, we must also alter the Article concerning
State enterprise.
Mr. McGREGOR (Canada): All this phrase says is that if it
is thought that public enterprises are engaged in harmful practices
they should be subject to investigation. Surely that is not too
much to impose in this Chapter.
The phrase "public commercial enterprises" is defined in
a (a) as meaning trading agencies of Governments for enterprises
in which there is effectiva public control. What we are concerned
about, for one thing, is the possibility of a commercial enterprise
securing immunity from this Article and this Chapter by securing
the sanction of the Government of the country in which it is
ope rating.
Before the war we all know of instances where particular
enterprises were sponsored by the State and engaged in practices
which were definitelyharmful. If we do not include it here, then
such private commercial enterprises may secure public sanction
and work very very serious damage. If there were a State in the
Organisation which controlled all traders - each of the commercial
enterprises operated by the State - then that State would. not be
subject to the provisions of this whole Chapter.
Mr. TERRILL (United States): I just want to extend what I
said very slightly, because I think there may be a misunderstanding
in the mind of my Czechoslovak colleague. What I meant to imply
was that under Article 31 State-control enterprises are to be
operated in accordance with commercial principles. If that is the
case, and an enterprise is operating entirely in accordance with E/PC/T/B/PV/2 .
commercial principles, it might nevertheless engage in a number of
restrictive business practices. -It might, either singly or in
combination with other firms situated in other countries...
Therefore, it is perfectly clear that the sort of commercial
activities contemplated in Chapter VI are not covered at all under
Article 31, and that is the reason why, if State trading
enterprises or national enterprises were not included in Chapter VI
you would have them running, in effect, Scot free; or at least
not subject to any of the provisions of this Charter, except those
to which the United Kingdom Delegate has called attention.
I think, therefore, it is warrantable to say that if we do
not include State controlled enterprises within this Chapter we
will be setting up a double standard now - whether it is one of
morality or not I would not want to dispute - but there would at
least be two standards in the world. V.
- 32 - E/P/ T/ B/PV/ 2
CHAIRMAN: The Delegate or the United Kingdom.
Mr. S.L. HOLMES (United Kinggdom): Mr. Chairman, if a
Government decides to become a Member of the Organization, it
will have acceptec, among otner things, paragraph 1 of Article
39 in this or some substantially similar foum. Iz a Government
engages in a public enterprise and allows that public enter-
prise to indulge in practices which are fundamentally contrary
to Article 39, thlen it seems to me that we are up against a
situation in wiach the good faith of a Govenment is involved,
That would be a fairly utrious matter, and we should feel that
that would be a matter where complaints under Article 35 would
be appropriate. That is, aa we -W it, a simple statement
of the difficulty. A Government should know what its public
enterprises are coinc. It is true that they are to conduct
themselves on commercial lines for certain purposes elsewhere
mentioned here, but we should say that under Article 39 a
Government is bound to see that its public enterprises conduct
themselves on good commercial lines.
CHAIRMAN: The Delegate of China.
Mr. C.H. CHEN (China): Mr. Chairman, we are inclined
to think that state trading is not purely for commercial pur-
poses. It may be for physical purposes or for social purposes.
For instance, Article 32, paragraph 4, states "In applying
the provisions of this Article, due regard shall be had for
the fact that some monopolies are established and operated
mainly for revonue purposes". Such physical monopolies
exist even now in China. We have a tobacco monopoly, and
so forth, and the Government fix the prices. Similar treat-
ment cannot be afforded to nationals of other countries.
Than there are also other undertakings purely for social
purposes. We think that in some enterprises under private
management, the profit may be enjoyed only by the few capitalists
so it is better to have enterprise under State management. In that
case; I think there are some special considerations to keep in mind, ER
- 33 - E/PC/T/B/PV/2
so we are still inclined to think that Article 31, 32 and 37 are
not quite sufficient to deal with State enterprises.
Concerning these so-called practices, it is definite to state
in
that/paragraph 3 of Article 39 - that is (a) , (b) , (c) and (d) -
there is a point concerning fixing prices where we are inclined
to think that in government enterprises in many cases the prices which
are fixed sometimes by law, sometimes by administrative order, are
not competitive prices. We cannot avoid that. Then, concerning
paragraph 3(b), in some case we have territorial market limitations
even within the country. For instance, in China we produce sugar
in the West and also in Formosa. If the Formosa sugar is allowed
to have free expansion then the sugar industry in Western China
will be killed entirely. The same is true in the salt industries.
So we have territorial limitations of different kinds of salt or
sugar industries .
Concerning limited production in paragraph 3(d), it is also
that
quite natural/if we have social or physical monopoly we often
limit the quantity produced. In the case of luxury or tobacco,
we do not want to have an unlimited production. We have even
specified the process to raise tobacco and so on. So only in
the case of (c), that is ndiscriminating against partbau'lXr
enterprises whether by boycott or otherwise", it seems such
practices are, of course, against the international morality and
to the detriment of the country and the interests of others, and
therefore it should be excluded. We quite agree with the opinion
expressed by the United Kingdom delegation, that is that the state
should know - that is the government which has such public
enterprises should know - what the proper practices which will not
be inconsistent with the provisions of this Chapter, are. ER
E/PC/T /B/PV/2
34
CHAIRMAN: It appears that there is a considerable lot of
difference of opinion regarding the subject of the inclusion of
public commercial enterprises. I would therefore like to propose
that this subject be referred to the Sub-Committee which I am
going to nominate at the end of this session, to deal with the
other proposals and the other amendments. Is that agreeable to
the Commission? S 35 B/PC/T/B/PV/2
Mr. F.A.McGREGOR (Canada), Mr. Chairman, before we leave
this subject may I just make one comment, to make clear the
remarks of the Delegate of China. I gather that he is of the
opinion that State control of domestic trade would come under
this Article. Even in Canada we have State control of certain
products and they will not be affected.
If the Delegate of China will refer to the statement con-
tained in the Canadian draft/of Article 39, he will see that
such monopoly as we have in mind must affect international
trade and must limit access to markets, and it must have
certain harmful effects. It must also substantially control
trade among a number of countries in one or more products.
Mr. C.H.CHEN (China): Mr. Chairman, the Chinese
Delegation also finds some difficulty in interpreting this..
Articles For instance, in the passage concerning State
enterprises, we say that such enterprises may establish a
monopoly in certain commodities which of course affects
international trade to a certain extent. You could interpret
this as the enforced monopoly of State control. That might
be interpreted as a violation of the Charter, but, on the other
hand, in another section State monopolies are permitted. I
do not know how these two provisions can be reconciled.
CHAIRMAN: We will leave it to the Sub-committee to
endeavour to reconcile the differences of views which have
been expressed on this particular subject, in order that they
may explore the possibility of reaching a solution.
The next item on our Agenda is a reservation by the
Delegate of Chile with regard to the changes which were made in
Paragraph 2 by the Drafting Committee,
Does the Chilean Delegation wish to make a statement on that
question? E/PC/T/B/PV/2
Mr. Harold Briggs VALENCIA (Chile): We withdraw our
reservation.
CHAIRMAN: Thank you very much.
We now have a proposed revision of Paragraph 2 by the
Delegation of the United States. This revision will also
be referred to the Sub-committee, but I would like to ask
the Delegate of the United States if he wishes to make any
remarks on this proposal.
Mr. Robert Pe TIRRELL (United States): Mr. Chairman,
I think that this revision is adequately explained in the
comments that are to be found on page 1 of Document E/PC/T/W/122
of 24th Ma.y,
All I can say is that it amazes me that so many people
could have gone over an Article so many times and not noted
this rather glaring lack of logic.
CHAIRMAN: Are there any comments on the United States
proposal?
Dr. P. LEENDERTZ (Netherlands): It is going to be brought
to the Sub-committee too, Mr. Chairman. If so, we might
perhaps leave it to them.
CHAIRMAN: We will therefore refer the proposal of the
United States Delegation to the Sub-committee,
We come next to the proposal of the Canadian Delegation
with regard to Paragraphs 2 and 3. I take it, Mr. McGregor,
that you have already made all the comments necessary in regard
to that part of your proposaI ?
Mr. F.A.McGREGOR (Canada):
S 36
Yes, I have. S 37 E/PC/T/B/PV/2
CHAIRMAN: The Canadian proposal with regard to Paragraphs 2
and 3 will therefore be referred to the Sub-Committee.
Mr. S. L. HOLMES (United. Kingdom): I would like to say, if I
may, that this seems to us to be a case where it is not merely a
Matter of drafting but rather that an important question of
principle has been introduced. I am in your hands entirely as to
whether I explain what the point is or whether our representative
on or at the Drafting Committee which you propose to appoint
should make the point. 38
CHAIRMAN: I think this is the place in which to make any
comments with regard to the substance pertaining to any of the
proposals which have been submitted to the Commission.
MR. S.L. HOLMES (United Kingdom): Mr. Chairman, I should
like to be as brief as possible but it will, I think, not escaped
Members' notice that the Canadian draft is really very much wider
than what we had before. It is wider in, I think, two instances.
Before, we were dealing with a particular complaint about a
particular practice. Here, we are dealing with practices
alleged to be as described in the earlier parts of this Article,
but are giving the ization power to determine whether those or
related practices are as described in any particular instance.
We do not quite understand what the significance is of the phrase
"in any particular instance". We would have expected to see
"in this particular instance", but in any case we do feal that the
addition of the words "or related practices" represents a fairly
wide new concept.
CHAIRMAN: Mr. McGregor.
MR. F.A. McGREGOR (Canada): The United States is the
father of the phrase "any particular instance". I shall leave
it for the United States to speak on that.
I acknowledge parentage of the words "or related practices"
and I did attempt to explain that when I commented on that
particular paragraph before. I think it is desirable that when
the Organization is investigation a particular practice that has
been complained of, and when it finds during the course of that
investigation other practices that are related practices that
must be of the type that we have described in the earlier part of
J.
E/PC/T/B/PV/2 J. E/PC/ T//B /PV/ 2
39
the Article, the Organization should be empowered to carry on with
the inquiry into these other related practices, rather than have
to go back to the original complainant and ask him if he would
authorise the Organization to go ahead with that. It just seems
commensense, when you are making an inquiry and there is another
practice which is forbidden in the Charter, to go ahead and
complete the investigation in that too. That is the purpose I
had in putting that in
Mr. R.P. TERRILL (United States): Mr. Chairman, I am happy
to report that an ambiguity of the English language has been
cleared up. The delegate of the United Kingdom called attention
to the possible meaning of the phrase "in any particular instance",
which the United States reviewed in Cocument 122. It is one that
is connected with the clause "in order that the Organization may
determined in any particular instance, whether such practices have
are
or/about to have any of the effects described".
The purpose of insertion "in any particular instance" was to
narrow down tho Organization's function ocyond equivocation. That
is to say, the Organization would not come out with the conclusion,
let us say, that suppression of technology is always bad. It
would be bad in this particular instance that it had under
examination as result of complaint.
I assumc that it has a limiting significance in that context
as well as in the context in which Mr. McGrergor use, it.
Mr. McGregor admits to being something of a cannibal, and he has
cannibalised my modest suggestion to put into his new edifice
which the delegate of France has described so adquately.
However, there might still be some ambiguity, and it has been
suggested to me by my learned colleague from the United Kingdom
that this could be removed by substituting the word "the" for the
word "any" in the phrase in question. It would then read "in
order that the Organization may determine, in the particular
instance,". I think his suggestion is entirely acceptable to the
United States. G
40 E/PC/T/B/PV/2
Mr. McGREGOR (Canada): Mr. Chairman, in denying the
American phrase I did not want to imply that I disliked the child,
I thought well of it. I am afraid, though, in yielding to the
influence of his next-door neighbour, the Delegate of the United
States has made it difficult for my child to live.
CHAIRMAN: No doubt all these alterations will be taken into
account by the Drafting Committee.
Mr. THILTGES (Belgiuzm) (Interpretation): I think that after
the discussion to find out the 'paternity', I partly agree with
the United Kingdom representative; and on the first point I am
particularly happy with the explanation supplied by the United
States re.presentative. Now as regards the extension of
investigations to related practices on which no complaint has
been lodged, I must make formal reservations on the part of my
Delegation, and my Delegation cannot agree with this new
procedure.
CHAIRMAN: There being no further comments, I propose that
this Canadian proposal be referred to the Sub-Committee.
Well, the time is getting late and I would just like to
deal before we close with the amendment proposed by the Delegation
of Czechoslovakia to delete the words "or to be about to have" in
line 7 of the New York text of paragraph 2.
Mr. MINOVSKY (Czechoslovakia) (Interpretation): The
Delegation of Czechoslovakia, Mr. Chairman, is of the opinion
that any investigation undertaken by the Organisation should bear
on facts only. If the words to which we object with regard to
practices - "or to be about to have" - are excepted, the result
may be that the Organisation will be engaged too often in a sort of 41 E/PC/T/B/PV/2
guesswork, and too many useless investigations may take place.
Also there is a danger that if these words are adopted
there will be too much room for wide interpretations of para. 3
of Article 39. We think that if it is our desire to have in the
future careful investigations conducted by the Organisation with
sufficient facts to support them, we must exclude any possibility
for investigations to be undertaken on the basis of imaginary
complaints, or misunderstandings, or perhaps even, in some cases,
of bad faith. If we were to call a fireman every time there is
the possibility of a fire starting, we would never have enough
firemen.
CHAIRAN: The Delegate of South Africa. -
Mr. Vi0 DER POST (South Africa): co this nnection I would
say that Article 2 as drafted in New York in effect forces the
ITO to pre-judge the c se, and, the words "or to be about"to havel
are not in my opinion satisfactory, and should be removed - the
words "to have or to be about to have"; but fortunately both
Amendments - that of the United States and of Canada - provide
for that improaement, End the Organisation will then be placed in
a position to decide what the actual positann is, emd not to pre-
JuAge it. Ls it originally reads it would. moreover, have to
assume-that that is the case and therefore provided and in that
respect, of course, I agree with the Delegate for Czecioslovakla.
But fortunately, as I eec thesL two prmposed Aeendichtc wht h our
Committee will consider, it removes that objection.
CH.IRMEN: These words occur in a number of different places,
and I think it will be the function of the Sub-Committee to consider
changes in these words whenever they appear. G.
E/PC/T/B/PV/2
Therefore, if the Commission agrees, I propose that the
amendment of the Czechoslovak Delegation be referred to the
Sub-Committee.
Agreed.
Well, I think we have come to the end of our labours. We
have not made as much progress as I had hoped. I wanted to see
us cane to the end of Article 39, and we have not been able to
do so; but I hope we will be able to work more speedily to-morrow
afternoon.
The next meeting of this Commission will be held at 3 o'clock
to-morrow. In the meantime, I wish to make an announcement with
regard to the composition of the Sub-Committee to which we will
refer the Amendments proposed by the Delegations of Canada, Belgium,
the United States and other questions which we referred to the
Sub-Committee this afternoon - that is, other than the question of
services.
We will therefore have two Sub-Committees - one will be
Sub-Committee No. 1; which we appointed earlier this afternoon,
to teal with the question of services. That Sub-Committee should
meet to-morrow morning. The second Sub-Committee, which I propose
to nominate now, should meet on Monday; as it may be overlapping
representation on the two Sub-Committees it would be desirable
for Sub-Committee No. 1 to finish its deliberations before
Monday.
The following are the Delegations which I propose to
constitute Sub-Committee No. 2: Belgium, Brazil, Canada, France,
United Kingdom and the United States.
The Meeting rose at 6 p.m. |
GATT Library | qs566pc7490 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Second Meeting of the Tariff Agreement Committee held on Wednesday, 6 August 1947, at 10.30 a.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, August 6, 1947 | United Nations. Economic and Social Council | 06/08/1947 | official documents | E/PC/T/TAC/PV 2 and E/PC/T/TAC/PV/1-4 | https://exhibits.stanford.edu/gatt/catalog/qs566pc7490 | qs566pc7490_90260005.xml | GATT_155 | 7,948 | 48,783 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/TAC/PV 2
6 August 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT
VERBATIM REPORT
SECOND MEETING OF THE TARIFF AGREEMENT COMMITTEE
HELD ON WEDNESDAY. 6 AUGUST 1947. AT 10.30 A.M.
IN THE
PALAIS DES NATIONS, GENEVA
Hon. L.D. WILGRESS (Chairman)
(Canada)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel: 2247).
Delegates are reminded that the texts of interpretations, which
do not pretend to be authentic translations, are reproduced for
general guidance only; corrigenda to the texts of interpretations
cannot, therefore, be accepted.
NATIONS UNIES CHAIRMAN: The Meeting is called to order.
We shall resume the Debate on the Report of the Tariff
Negotiations Working Party on the General Agreement on Tariffs
and Trade. I think that it would be of assistence in
clarifying the situation pertaining to the time-table if
Members in speaking on the general principles underlying the
Report of the Tariff Negotiations Working Party would give
some indication as suggested yesterday by the Delegate of the
United States as to whether or not they believe their Government
would be prepared to sign the General Agreement on Tariffs and
Trade on September 30th, presuming the Tariff negotiations be
completed by September 10th.
As we were adjourning yesterday, the Delegate of Chile
asked for the floor, and if he so de res I shall give him
the floor first.
The Delegate of Chile.
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Mr. F. Garcia OLDINI (Caile) (Interpretation): Mr.
Chairman, I would like to refer to the remarks I made yesterday,
to which you gave an answer before the closing of yesterday's
session. You ~told us that Articles I and II, as well as the
Article which reproduces Article 38 of the Charter, are
characteristic Articles which can be found in all agreements,
You are quite right, Mr. Chairman, but the difficulty lies
in the fact that we are to agree on these Articles before their
final form is decided and this, I submit, is precisely the
difficulty which we envisage. This plays an important part
in our present discussion.
As to my other remarks concerning the difficulty of the
provisional application of the Agreement, as well as my
remark that we provisionally reserved the position of our
Delegation, I want to observe that we would like to wait for
a further suggestion concerning the possibilities of surmounting
the difficulties which I pointed out and other difficulties which
have not yet been discussed.
CHAIRMAN: Perhaps the point which has been raised by
the Chilean Delegate, and which I think has
can be met if, after the general discussion of the Report of
the Tariff Negotiations Working Party - I hope that this general
discussion will be concluded this week - we first of all take
up the detailed consideration of Part III, because most of the
Articles of Part III do not reproduce Articles of the Charter
and we could only take up detailed consideration of Part I,
and afterwards of Part II,. at a later stage, by which time no
doubt the Preparatory Committee will have established a
definitive text of the Charter. I take it that this will meet
the point raised by the Delegate of Chile, and I hope that the
other Members of the Committee will be in accord with this
suggestion. S - 4 - E/PC/T/TAC/PV/2
The Delegate of India.
Mr. B.N.ADAKAR (INDIA): Mr. Chairman, we are trying to
think how best to deal with the two or three questions which were
posed yesterday by the Delegate of the United States. Like
Australia and other Delegations which expressed views on the
subject yesterday, we would also need some time to study the
General Agreemant as a whole after the main features of it are
decided,
It seemed to us, on a prime facie consideration of this
document which has been prepared, that if a country needs time
for consultation after the negotiations have been completed,
then it could, if its name is not mentioned in Article XXXII,
sign the Agreement at Geneva but take the necessary time for
consideration by delaying its ratification, because it would
appear from the wording of ArticXXXII that for any country
whose name is not mentioned in Paragraph 1 of that Article
signature would not involve the necessary undertaking to give
provisional application, It seems to us, however, that
although ArtiXXXII is worded in this way, it will still, in
fact, be necessary for every country signing the Agreement to give
provisional application. The need for that arises from the
fact that those countries which will give provisional application
will probably find it necessary, before they give that
application, to publish the General Agreement as a whole,
along with all the Schedules of tariff concessions attached to
the Agreement. If they do that, then they will be giving
publicity to the tariff concessions which have been agreed to
by countries which have not found it possible to give
provisional application. In that case, once the tariff S E/PC/T/TAC/PV/2
-5-
concessions promised by a country are published, it will be
very difficult for that country to delay bringing those
tariff concessions into efftect. Once the importers know that
a duty on a certain article is going to be reduced, it is
going to be very difficult to delay reduction of that duty
without completely demoralizing the trade, because it will be
in the interests of the importer to delay his imports until
the reduction comes into effect. ER E/PC/T/TAC/PV/2
-6-
Therefore, the fact that the provisions of this Article are
going to be given simultaneous publicity on a date to be determined,
actually leads us inevitably to the conclusion that that will be the
date on which provisional application will have to be given, not
merely by the countries mentioned here, but by all countries which
have signed the Agreement. Therefore, if any country needs time for
studying the Agreement as a whole, the maximum period of time that it
gets for study or consultation is the time between its signature of
the Agreement and the date that will be fixed for provisional
application, that date being the deadline for giving provisional
application. I quite understand that provisional application is
subjected to the proviso that it can be withdrawn at sixty daysr
notice. Even so, certain countries will find it necessary to have
time for study and consultation before giving application whether on a
provisional or definitive basie.
Well, that being the case, a country which needs time for study
and consultation cannot hope to get that time by delaying application,
because application is subject to a deadline. Therefore, it will be
necessary for a country in that position to have the necessary time
before giving its signature, because signature in fact implies
provisional application. Therefore, countries in that position will
find it to their advantage, if the facts are as stated, to delay that
signature and thus to obtain the necessary time.
India is in that position, and therefore, on this understanding -
if this understanding is correct, that, when the Agreement will be
published, the countries giving provisional application will publish
all the schedules and not merely the schedules relating to countries
which have agreed to give provisional application, but schedules of
all countries which are attached to the Agreement, which have signed
the Agreement - if that understanding is correct, then it is in the
interest of a country such as India to delay its signature to some -7 - -_ ., _,-- - _,-
such date as that indicated by the De.legate for Australia yesterday,
If, onn nathe other hand, tat understing is not co.rectjLnd
the countries which want to give provisional application will agree
to .ublish only those scheduntriwhich relate to other cour.:ies which
have agreed to giveping provisional application, keethe schedules of
countries which are not expected to give provisional application in
suspense, then the situation would be different. But I doubt
whether that procedure is at all practicable, because, from the point
of view of oublic.ty, and from the point of view of the psychological
erpixssion which it is interl^d to make on other countries not
represented here,rperhaps publicity of that so-t may not be
convenient.
The answer to the quesfion -oset. by the Delegate o the Uni-ed
States is that, like Australia, India would like to defer her
signatume so this Agreement until sore uuch date as that suggested
yesterday.
Thile I am speaking on thIs subject of the timetable, r would
like to offer one other suggestion. There are mary features in
this Agreemere which are particulandmentu.Ls concerning the amexllnt
and the witcdrawal of other clauses whiuh will create very grave
uncertainty in the mnds of the nations which will be assembled at
the World Conference as to whether beis Agreement will at all b6
substituted by an International Trade Organization Charter, when it
comes into effecm, or 'whether a whtchtion nay not arise in Wticn
this Agrmementmand the ITO Charter iay rerain simultaneously in
operation. That wiIL be a verydoncotvenient position. I QO no
wish to dwell ot those featureup perhaps Zhey will come U. for
d scussion in the course of- this debate, and perhaps those features,
howeper undesirbble they may ajpear, may De accepted by the
delegations here preshat as inevitable; bhut peri-ps the effec, - te
slightly un.leasant eefecr - created by those f atu:es might be
mitigated if the signatories to this Agreement agree beforehand that
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ER E/PC/T/TAC/PV/2
they will not give definitive application to this Agreement until
they see the result of the World Conference. I believe that this
is necessary in order that the nations/present at the World Conference
may not feel/that we are presenting them with an accomplished fact,
in order also that the main intention behind this Article XXXII on
Provisional Application, may be fulfilled. I have not been able
to discover anything in this Agreement which indicates definitive
delay until the end of the World Conference. The is, of course,
recognition in the Protocol, in paragraph 2, that the signatory
countries "gree that the objectives laid down in the preamble to the
Agreement can best be attained if the proposed United Nations
Conference on Trade and Employment adopts a Charter for the
International Trade Organization." I should think that it is
Implied in this undertaking that the signatory countries should agree
here, at this Conference, that they will not bring this Agreement
definitively into force until they see the result of the World
Conference, because, otherwise, the effect of paragraph 4 of
Article XXIV is that 30 days after acceptances have been deposited with
the Secretary General on behalf of territories which account for
84% of the total trade of signatory countries, the Agreement will
come into force. There should be some understanding here on that
point.
8
ER J. E/PC/T/TAC/PV/ 2
CHAIRMAN: The Delegates of New Zealand.
MR. J.P.D. JOHNSEN (New Zealand); Mr. Chairman, the position
of New Zealand is that an agreement cannot be made effective even
provisionally until ratified by Parliament . Although there has
been constant communication with the the Government in connection with
negotiations; there is a difficulty at t his distance, when
communications must be confined almost entirely to cables, of
keeping then fully informed on all points. Furthermore, full
details of items of interest in a multilateral Agreement which
will require to be considered in weighing up the proposals will
probably not be available until completion of the negotiations.
In the circumstances, my Government would, I feel sure, desire
to have an opportunity to consider the complete proposals in their
final form before coming to a decision regarding signature. In
that respect our position is much the same as that of Australia,
and a procedure along the lines of that suggested by Dr. Coombs
would probably be most acceptable to New Zealand.
We are in complete accord with the suggestion that the
Agreement should remain strictly confidential until published
simultaneously at a prearranged date by each party to the Agreement.
The date on which New Zealand might give Provisional Application
to the Agreement would be dependent on whether, at the time of
publication, Parliament happened to be in Session and was able to
pass the necessary legislation. In that connection, the point
raised by the Delegate of India - that it would be necessary to give
the Agreement Provisional Application as soon as possible after
publication- might give us some concern because I think that there
is the aspect that if provisional Application is delayed there
will probably be some disturbance of trude, and that is a matter
9 J. 10 E/PC/T/TAC/PV/2
which will give as some concern.
As to the question which has been raised as to whether at
this stage General Provisions should be included in the Agreement,
this necessarily involves the question of reservations to any
Article which it might be proposed to insert in the Agreement.
It would seem, therefore, rather premature perhaps at this point
to attempt to determine that matter.
Thank you. 11 E/PC/T/TAC/PV/2
Dr. J.E. HOLLOWAY (South Africa) Mr. Chairman, our
legislation requires ratification wherever duties are below
the intermediate column of our tariff, and as we have agreed
to numerous reductions below the intermediate column, the
General Agreement would have to be ratified by our Parliament
before it could be brought into force. Our Parliament
generally meets in January.
As for the Agreement, when the document is ready to be
signed or initialled, we propose to sign it ad referendum.
Our Government has had the Agreement in bits and pieces, and,
after all, Ministers are also human beings, and ought to be
given at least the opportunity of seeing what they have to put
their signatures to, especially as they are likely to be
criticised very severely in Parliament if they put their
signatures to something which an Opposition can criticise.
There is only one other point I wanted to mention: the
point raised by the Delegate of India. We are not at all
concerned with advance notice, though we agree there should
be simultaneous notice. On the contrary, when it comes to a
reduction in tariff we prefer to give advance notice so that
merchants can lay off their stocks of goods on which higher
duties have been paid before the new goods come in. If there is a
material reduction in duty, you may even cause very aevere
losses to, merchants by bringing in the reduction of duties
immediately. I do not know whether the Delegate of India
did not, perhaps, have at the back of his mind the position
that develops when there is an increase in duties, when, of
course, you want to prevent certain people from forestalling
you and making quite un justifiable profits at the cost of
the general taxpayer.
V E/PC./T/TAC /PV/2
CHAIRMAN: The Delegate of India.
Mr. B.N. ADAKAR (India): Mr. Chairman, may I add just
one word of comment to the question raised by the Delegate of
South Africa just now? It is quite true that when there is al
increase of duty it is necessary to give effect to it
immediately, in order to prevent forestalling. When there
is a reduction in duty, some advance notice may be permissible
in order to enable traders to work off their stocks; but the
point I was going to make was not that no notice should be
given, but that an unduly long period should not be allowed
to elapse between publication and enforcement in the case of
a reduction of duty, because if such a period is allowed,
stocks may be running low, and after the stocks have been
exhausted a situation of scarcity will develop - the importer
will necessarily defer importation till the reduction comes
into effect. Therefore, once publication is given to any
tariff reduction, a definite time limit should be established
as to when the tariff reduction is to be brought into effect.
12
V E/PC/T/TAC/PV/2
CHAIRMAN: Any other speakers? The Delegate of
Czechoslovakia.
Mr. STANISLOV MINOVSKY (Czechoslovakia) (Interpretation):
Our Delegation, Mr. Chairman, has already said in this
Conference that it was impossible for us to sign this agreement
without the approbation of our Assembly. In particular, if we
consider the case of Section II and of certain articles in Sections
I and III, these Articles may lead us into terrible difficulties;
and it is not clearly stated that the question here is of a
provisional signature. In fact, there is in this text a certain
provision which is not in agreement with our legislation. It is
not possible for us to sign it even for one day, and we consider
that it is impossible to put into practice this Agreement
before the end of the world Conference. In particular, if we
consider Article XXIX dealing with certain very particular
obligations of the Members, it is very difficult to accept
provisionally those obligations. Article XXIX says that the
contracting parties shall take all necessary steps to terminate
any prior international obligations with any non-contracting
party which are inconsistent with this Agreement.
I think that the fact of signing a Text including such
provisions may imply very great difficulties for our country,
and, of course, it may be said later on that we might come back
to this particular provision and say that we signed it by
mistake; but we consider it is not possible to submit a certain
text to our Parliament on a certain date and. come back with
another text later on.
Therefore, we believe that a detailed discussion of this
Agreement. should be postponed until a definite Text of the Charter
has been adopted.
CHAIRMAN: The Delegate of Cuba.
G
13 G 14. E/PC/T/TAC/PV/2
Mr. FRESQTUET (Cuba): In our case, Mr. Chairman, the
Agreement as a whole must be ratified by the Higher House, and
in the case of changes in the tariff they should be approved,
in ordinary law, by the whole Government.
The Executive Branch of our Government will do their best
to speed up the procedure, but, of course, we cannot commit
curselves to any fixed date to put into force the Agreement. 15
S E/PC/T/TAC/PV/2
CHAIRMAN: The Delegate of Syria,
Mr. Hassan JABBARA (Syria) (Interpretation): Mr.
Chairman, the Syrian Delegation is not represented here as
a Member of the Economic and Social Council but because it
has a Customs Union with the Lebanon. Moreover, Syria is a
Member of the United Nations and as such will be called upon
to examine the Draft Charter with the other Members of the
United Nations and adhere to it after the discussion and
examination of the provisions of the Draft Charter.
As far as the present agreement is concerned, we meet
with very much the same difficulties for its application as
those which have been mentioned by the other Delegates who
took the floor. We believe that these difficulties arise from
the fact that at the same time as the Draft Charter was being
examined it wes desired to provide for a multilataral agreement
which embodies the main provisions of the Charter, which is
still under discussion. This has resulted in an impasse.
If we sign the Agreement we automatically subscribe to
the Charter and find ourselves bound, although certain. points of
the Charter are not yet definitely agreed upon. In this
connection, Mr. Chairman, we submit a proposal which will
perhaps show a way out f- the present difficulty. The customs
agreement must, in our opinion, remain a customs agreement and
therefore ought not to include Section II of the Report, nor
ought it to include Article I of the present Report, which
reproduces Article 14 of the Charter, which is still under
there
discussion. Nor should we find/Article XXII, which reproduces
Article 38 of the Charter, which has not yet been finally adopted. S E /PC/T/TAC/PV/2
If we free the Agreement from provisions which are still
under discussion, and provision which will again be discussed
by all the Members of the United Nations in November, then
the situation will be clarified and it will be easier to find
a procedure for a provisional application of the Agreement and
so help world trade until the final provisions come into
force. If this point of view is not accepted by the Committee,
the Syrian and Lebanese Customs Union can only repeat their
reservations concerning certain Articles, which were reserved
by them and which are still under discussion, until the Charter
is adopted,
Moreaver, we are of the opinion that the provisions which
are embodied in the Agreement ought to be valid only until the
final adoption of the Charter and that all modifications which
might be undertaken at the date of the adoption of the Charter
should be automatically applicable to the Agreement t which will
be signed now.
CHAIRMAN: Are there any other speakers?
We have now heard from 14 Delegations on the question of
the time-table to be followed regarding the signing and bringing
into force of the General Agreement on Tariffs and Trade, and it
is clear that we cannot arrive at any conclusion at this stage,
because I have the impression that in a number of cases
Delegations wish to consult their Governments on various points.
Therefore I think it would be better to leave over the
further consideration of the time-table until we come to the
detailed consideration of Part III of the General Agreement
on Tariffs and Trade. That part includes the Articles providing
for the entry into force, also the signature of the Agreement,
and that would give another occasion on which to examine more
closely the time-table which will be adopted. I therefore E/PC/T/TAC/PV/ 2
suggest that the remainder of this general debate be now
devoted to more general qucstions in relation to the Report
of the Tariff Negotietions Working Party and that we take up
the question of the time-table, again when we consider the
Articloswhich will deal with the entry into force of the
Agreement.
I would like to take this opportunity of making an
announcement with regard to the submission of amendments on
Part III of the General Agrement. As I stated earlier,
Part III contains those provisions which are independent of the
the submission of
Charter and we can now fix the closing date for/amendments on
Part III. I would propose that this closing date for
amendments on Part III should be noon on Monday next, August 11,
That would then enable us to take up later in the week the
detailed consideration of Part III.
I shall be glad to know if this proposal meots with the
approval of the Committtee.
S
17 ER 18 E/PC/T/TAC/PV/2
Is that proposal agreed? It is agreed. Well, we will now
regard Monday, August 11th, noon, as the closing time for the
submission of amendments on Part III of that Agreement. The
debate will now be continued on the report of the Tariff Negotiations
of the Working Party.
Dr. H.C. COOMBS (Australia): Mr. Chairman, when I spoke
previously I confined my remarks exclusively to the timetable implied
by the General Agreement, but there are one or two other matters to
which I would wish to refer. It is not my intention to comment upon
the contents of this Draft General Agreement produced by the Tariff
Steering Committee, but there are certain problems raised by the
contents which I wish to refer to, so that it will be clear, when we
as to
come to consider the individual parts of the Agreement,/the point of
view from which our criticism will be directed. We have indicated
at various times, that we believe those two parts of those negotiations
to be very closely inter-related, not merely that the Tariff
Negotiations are closely interlocked with the discussions of the
Charter, but the proposal of the ITO and the various parts of the
Charter are, themselves, very closely inter-dependent and that it
would be, in our opinion, difficult, if not unwise, to accept
obligations in relation to the reduction of tariffs and in relation to
commercial policy unless we are confident that other countries are
simultaneously a cepting obligations of the kind embodied in the more
positive parts of the Charter, and that we are reasonably confident
that our position is carried out.
prefer
We would, therefore,/an arrangement which would enable the
tariff schedules and the Charter as a whole to be dealt with and
adopted simultaneously. We recognise that there are difficulties in
that approach; the difficulties may, in fact, be so acute that it is
impossible for them to be dealt with in that way; but we must make E/PC/T/TAC/PV/2
quite clear the fact that we may be prepared to accept a
programme which envisages the various parts of this whole being dealt
with separately, but they are none the less parts of a whole, and
that action taken at the outset is on the assumption that action will
be taken by other people on the parts which have to be dealt with
later. This is very important, when we come to consider the
contents of the General Agreement. It would best meet our
requirements if the General Agreement contained the whole of the
Charter in its present draft form, and if it were clearly understood
that, when the Draft Charter ceased to be a draft and became a final
document, it as a whole replaces the general Articles of the
Agreement.
Since it appears that some countries are not in a position to
adopt the whole of the Charter provisionally in the General Agreement,
at
we must look/what parts of the Charter as a whole are being
included and what parts are being omitted. The Steering Committee
on Tariffs has suggested the device of the Protocol for dealing with
those parts of the Charter which are not embodied in the General
Agreement itself, and I have payed tribute before to their ingenuity.
I agree that that is an honest attempt to meet our point, but I think
delegates will agree that it is not entirely a satisfactory answer to
our-problem, and that, if we accepted it, it would be in the confident
expectation that it will be replaced by complete action as early as
practicable. If we accept that, however; we come back to the
position that the contents of the General Agreement, so far as the
general articles are concerned, should be limited to the obligations
which are absolutely necessary to protect the schedules of tariff
reductions which have been negotiated. Otherwise, there is no
reason for including for any of the obligations in the Charter being
a
based on/different basis from those which at present are covered by
the Protocol. To include any of those obligations in the General
Agreement beyond what is absolutely necessary for the protection of
the tariff schedules implies a distinction between some of the
obligations in the Charter and others.
19
ER 20
J.
E/PC/T/TAC/PV/2
I have made this point, Mr. Chairman, because, to be perfectly
frank,we are not entirely satisfied that the Articles which it is
proposed to include in the General Agreement are only those which
are necessary for the protection of tariff schedules themselves.
We are not in a position at the moment to give details of our
doubts in the various Articles - we will do that when the detailed
discussion on the General Agreement is undertaken - but I would
wish to refer to one .article in particular, since this Article
is, to some extent, fundamental, and it is a matter to which I
referred earlier in the discussion of the Draft Charter.
I would like to remind delegates, Mr. Chairman, that when
article 14 of the Draft Charter was under discussion, that is,
the Most-Favoured-Nation clause, I said something to the following
effect:- It is not our intention, that is, the intention of the
Australian Delegation, to accept the obligations implied by any
one of the Articles of the Charter unless there is substantial
evidence that the other purposes of the Charter are receiving
attention which gives us reason to anticipate that agroed act :^
will be taken and will prove effective. It will,
therefore, not be possible for a final judgment to be made by the
Australian Government as to whether the unconditional Most-
Favoured-Nation principle should replace the preferential basis
on which its commercial policy has been construacted in the past
until we have made substantial progress,not merely in the
discussions of tho Charter, but in other parts of the work being
carried out in Geneva, and until other matters, which are
primarily matters of domestic policy of the countries concorned,
are determined. E/PC/T/TAC/PV/2
As I pointed out there, the acceptance of the Most-Favoured-
Nation principle is, for those countries which are members of a
preferential system, a fundamental change in the character of their
commercial policy. It is a change which in our opinion is
justified only by the whole content of the Charter, and the change
in commercial and domestic policies which are implied in all parts
of that Charte.
We will, therefore, be unwilling to accept the obligations
implied in Article 14 until the whole of the Charter is adopted.
It is not our opinion that it is necessary for as to accept the
Most-Favoured-Nation principle for other countries to be satisfied
that the tariff reductions which we have negotiated and which are
embodied in the schedule will be protected against abuse by other
aspects of Australian commercial policy. We are not convinced,
therefore, that it is necessairy for Article 14, the Most-Favoured-
Nation clause, to be embodied in the General Agreement on Tariffs
and Trade at All. To as, it is part of the general structure of
the Charter, which should be dealt with along with the other
parts of the Charter which are not regarded as absolutely
essential to protect the schedules of reductions.
The other point which I wish to deal with specifically,
Mr. Chairman, is the provision in the Draft Agreement relating to
the replacement of its general Articles by the Articles of the
Charter when the Charter is agreed to. The provision at present
is a strange one. We have understood that the purpose of thase
negotiations was to reach agreement about the content of the Charter,
and also to bring about reductions in tariffs, and that when both
parts of this job have been done the commercial policy provisions
would ba those of the Charter. It is proposed in here that the
21 J. 22
General Articles of the Agreement should be replaced by the Charter
only if two-thirds of the Members agree. Now, that seems to w;
to be a strange provision. In our opinion, the replacement of
the General Articles by the Charter ought to be automatic unless
there is good reason to the contrary. A more reasonable provision
would be to provide that the General Articles of the Agreement
would be replaced by the content of the Charter unless a substantial
majority of the Members agree otherwise.
The reason that I refer to this, Mr. Chairman, is that we are
somewhat concerned about certain elements in the Draft Generl
agreement which appear to us to imply some doubts as to whether
the Charter will, in fact, become operative, and correspondingly
there is a desire to construct the General agreement not a
provisional document which will be replaced by the Charter but as
something which will stand alone in the event of agreement failing
to be reached on the Charter.
Now, we have no objection, obviously, to the possibility of such
failure beirg provided for, or for a provision ueing included
which would permit the parties to the General Agreement to confar,
in the event of failure to reach an agreement about the Charter,
so that they could decide then what right replace on a permanent
basis the Charter. which we anticipated would form the casis for
this permanent agreement.
We are distressed at the suggestion that it is necessary to
establish here in the General Agreement, something which, by its
structure, appears designed to continue in the form in which it is
agreed upon hero rather than to be quito clearly regarded as
something provisional to fill in the gap between the time when it
is necessary to operate the tariff reductions and the time when we
have a Draft Charter which will act adequateIy and satisfactorily
as the General Tariff Articles of such ariffs Agreements.
E/PC/T/TAC/PV/ 2
J. E/PC/T/TAC/PV/2
CEAIRMAN: The Delegate of India.
Mr. B.N. ADAKAR (India): Mr. Chairman, we have listened
with great attention to the illuminating remarks made by the
Delegate of Australia. So far as the provisions of this
agreement concerning amendments are concerned, the Indian
Delegation had occasion in the past to draw the attention of the
Tariff Steering Committee to the sort of inconvenient situation
that is likely to arise if slightly more than one-third of the
contracting parties decide not to replace the General Agreement
by the provisions of the I.T.O. Charter, and the possible adverse
effect which this might have from the point of view of making
this Agreement and the Charter acceptable to the nations attending
the World Conference.
However, we recognize that this situation cannot be
altogether avoided, though it has to be modified somewhat. We
do not, therefore, for that reason asso ciate ourselves completely
with the suggestions made by the Delegate of Australia. The
Delegate of Australia suggested that one way of getting out of
this difficulty would be to provide that the General Agreement
should replace automatically the I.T.O. Charter unless a
substantial majority of the countries decided otherwise. We
would think that procedure extremely risky and dangerous.
We are signing an Agreement for a definite period of three years.
We should not be asked to make a leap into the dark. We should
not, therefore, be expected, at the time when we sign the
Agreement, to commit ourselves beforehand to accepting anything
without our own consent during the period of the Agreement.
If a provision, is inserted to the effect that the general
Agreement will be automatically replaced by the Charter, when we
V
23 V 24 E/PC/T/TAC/PV/2
do not know what the future Charter is going to contain, we
shall be accepting an undefined and vague commitment. It is
highly necessary that when we sign the General Agreement we
should know precisely what our obligations are, and if there is
going to be any change in those obligations, each change,
before it is applicable to us, should have our consent.
It is, therefore, necessary that we should maintain the
provisions which at present exist in paragraph 1 of the Article
on amendments (Article WAII ), and that the question of replacing
Part II of the General Agreement v, the corresponding provisions
of the Charter should not arise unless all the contracting
parties to this Agreement have accepted the I.T.O. Charter. G 25 E/PC/T/TAC/PV/2
That seems to us to be very necessary. If any country
does not join the ITO Charter but has signe. the General
Agreement, then any modifioation in the terms of the General
Agreement in order to bring it into line with the ITO Charter
should be carried out only in the process of the Amendment; and
as provided for in paragraph 2 of the Article on Amendments, any
such Amendment should be effective only in respect of those
contracting partics which accept the Amendment.
If any of the contracting parties chooses not to accept a
particular Amemdment, then that Amendment should not be effective
with respect to that contracting party. This is very fair, because
as I pointed out at the start, it is necessary for every country
that signs the agreement to know precisely what its position is
going to be through this period of three years; and it is
especially necessary, because there is no provission in the
Agreement at all whereby a country can withdraw from the
Agreement before three years. At the same time, I would like to
draw the attention of the Committee to a pravis ion which exists
in paragraph 3 of this Article on Amendments. In the second
sentence of this paragraph it reads, "The Committee may decide
that any contracting party which fails to accept an amendment
which has become effective other than an amendment to Part I of
this agreement, or to the provisions of this Article, shall cease
to be a party to this Agreement for such period as the Committee
may specify." That is to say, in the first place, in para 2 we are
giving the contracting party the right to decide which particular
Amendment will become effective with respect to his country, and
in para. 3, we take away that right by telling the country that
if the Amendment it does not accept becames effective, then the
country is liable to be dismissed from this Tariff clause. 26 E/PC/T/TAC/PV/2
The right to 2 is taken away by 3. It is highly
Desirable that a country signing the Agreement should not be
placed in that position. The country should know that nobody
has the right to impose fresh obligations on it, so it is not
likely to be dismissed. For that reason, we would suggest a
definite deletion of the second sentence of para. 3 of the Article
on Amendments .
One more word. Although India is a country which has in
the past given ant enjoyed preferences, although we have taken
due care in the course of the deliberations of this Conference to
safeguard the rights at present enjoyed both by India and other
countries to which India gives preferences to the extent to which
it was necessary to do so, we would not support any suggestion
that Article 14 be left out of the General agreement. We regard
the Most-Favouread-Nation principle as essential to, the success of
this Conference, and if Article 14 and the principles embodied
in that article are left out of the General Agreement, the
Agreement will lose much, in faot the whale, of its value.
We would. therefore strongly oppose the suggestion to leave
out Article 14. S 27 E/PC/T/TAC/PV/2
CHAIRMAN: The Delegate of the Netherlands.
Dr. R.S.SPEEKENBRINK (Netherlands): Mr. Chairman, as I
said on another occasion, when we discussed the Report of the
Tariff Negotiations Working Party with regard to the progress
of negotiations, the real difficulty with many of our negotiations
is that we do not know exactly which are the underlying clauses
of our negotiations. That shows quite clearly how much worth
we attach to a number of Articles of the Charter which are
necessary to protect the concessions we give with regard to
tariffs, and I think that is the reason why we must have a certain
number of these Articles in the General Agreement on Tariffs and
Trade; otherwise we shall have traded away certain safeguards
to our own economy without knowing that, on the other hand, we
shall have the advantage of stipulations which are intended to
free international trade from many of these obstacles.
We consider these particular Articles as absolutely
necessary for real agreement on tariffs and trade, so that I am
fully in agreement with the Delegate of India when he says that
to delete Article 14 for instance, from the General Agreement
on Tariffs and Trade goes too far. I consider that a very
sweeping change which might unbalance the whole thing. We
should therefore, in our opinion, decide which Articles really
need to be included in this General Agreement, and no doubt it
will be possible in this connection to come to an agreement amonst
ourselves. But to delete all these Articles and have only a
fsw provisions standing to put into effect these tariff
reductions at a certain date with no other safeguards at all,
would be unacceptable to us, I think. ER - 28 E/PC/T/TAC/PV/2
I will then come to another argument which has been made with
regard to Amendments - Article XXVII. Here again, our position
is that these Articles are a very important part of the General
Agreement on Trade and Tariffs, and we must see to it that we do not
adopt such a position that the World Conference will say to us:
"Well now, you have drawn the thing up in such a way that the only
thing for us to do is to take it, or leave it." I have always
regarded paragraph 3 of Article XXI Iin that light, that if we Ssa
that we can have no changes in Part II of the General Agreement we
do, in effect, without the consent eof ll the parties, what many of
the delegates have warned us against. I would, therefore, welcome
a clarification of the meaning of this clause, and I do not doubt
that we will come to an agreement there.
Then, there is a third point of greater importance which is our
whole position with regard to the General Agreement, and here I mean
the possible consequence of the Resolution of the Economic and Socail
Council with regard to the invitation of non-Members. I will not go
into that - I welcome very much the opportunity that tomorrow we will
hate a discussion of the Heads of Delegations and the report of the
Chair-mn of this Committee on this point, but the position is bEeig
studied at home, and I only would like to point out here that that
amendment might create very serious difficulties for us. J. 29 E/PC/T/TAC/PV/2
CHAIRMAN: The Delegate of the United States.
MR. W. BROWN (United States): Mr. Chairman, I simply want to
address myself to the first point made by the Delegate for
Australia in which he questions the desirability of including in
the General Agreement on Tariffs and Trade the principle of the
Most-Favoured-Nation Treatment. That principle seems to us to be
an absolutely fundamientaI principle which is essential to the
Agreement. We have been proceeding, I thought, on the basis that
that was our principle of approach in these tariff matters We
have recognised that there have been exceptions to it in established
preferential systems, but one of the objectives of this
Conference has been, by the process of negotiation to reduce or
are
eliminate the discriminations which/inherent in those systems. E/PC/T/TAC/PV/2
It seems to us absolutely essential that in this Agreement
we undertake to give each other most-favoured-nation treatment
with the exceptions which are provided for in Article 14 (2).
We regret those exceptions, but they are there and we all accept
them. But we would feel that if that principle were to be
omitted from this Agreement, it would be a tremendous step
backwards by the Conference, because it would amount to a
declaration by the nations represented hero that they did not
consider the principle of the most-favoured-nation treatment to
be sufficiently important to include in this Trade Agreement.
I should have thought that the point made by the Delegate of
Australia would be met by the provisions of paragraph 2, in
which the existing preferences which have not been modified or
eliminated by the negotiations here would be preserved. I
wonder if he would care to clarify that point.
CHAIRMAN: The Delegate of Australia.
Dr.H. C. COOMBS (Australia): Mr. Chairman, I am glad of
the opportunity to explain a little more a point I have made in
relation to the preferences. I agree that paragraph 2 of the
existing Article saves those preferences which come out of the
negotiations; but the Delegate of the United States will
realize that they are bound - not only the cm s which were
negotiated, but the others also. That is the difference.
The point I want to make on this matter is not an attempt
either to suggest that the most-favoured -nation principle is not
a very important part of the Charter, or that we would not wish
to accept it as part of the Charter, but that it is not
necessary to protect the tariff reductions negotiated here.
We agree that it is important, but it is no more important to us
V
30 V E/PC/T/TAC/PV/2
than the undertaking to maintain high levels of employment or
to take action designed for that purpose. We are leaving that
one to the Charter. Therefore, the importance of these Articles
is not the basis for deciding whether they go into the General
Agreement or not. The choice between whether they go into the
General Agreement, or whether they are left untill the Charter and
only covered in the meantime by the Protocol, depends upon whether
they are necessary to protect the tariff reductions.
Now if any Delegate, the Delegate of the United States, the
Netherlands, or the Delegate for India, or any other Delegate,
can show us how in the absence of the Most-Favoured-Nation Clause
we can evade or reduce the value of tariff reductions we have
negotiated here, we withdrew our opposition to the inclusion of
Article 14 in the General Agreement.
Chairman: The Delegate of Belgium. E/PC/T/TAC/PV/2
M. Pierre FORTHOMME (Belgium) (Interpretation): Mr.
Chairman, the Belgian Delegation simply wishes to affirm that it
fully associates itself with what has been said by the Delegate
for the Netherlands.
We consider that the provisions of the tariff negotiations
must have full effect in the framework which has been worked
out for the Tariff Agreement. We agree that the provisions
of the Charter might supersede the provisions of the Agreement,
provided they remain in the framework of this Agreement. We
do not wish to commit ourselves beforehand in this respect if
we do not have the assurance that the new provisions of the
Charter do not correspond to the framework of the concessions
which have been worked out for the Tariff Agreement.
(M. Forthomme intimated that he wished to make a
correction in the interpretation):
I would prefer to say, instend of "the framework", the
general set of conditions in which the concessions will be
operative. I would be willing for the provisions put into the
General Agreement to be replaced by the ones in the Charter,
on condition that the general set of conditions would be
similar and not afford less protection than the ones we have
agreed to here,
CHAIRMAN: We have now come to the time at which we
should adjourn so I suggest that we postpone the debate until
our next meeting. Unfortunately, it will not be possible
for this Committee to meet tomorrow. It has been decideed to
give right of way to the Sub-committee on Chapter IV, which is
the Sub-committee most behind in its work.
32
S S
The Secretariat have arranged, in consultation with the
Tariff Steering Committee, that we should have the right of way
on Monday next, It is therefore proposed that we meet on
Monday morning and also on Monday afternoon, which I think will
give us an opportunity to conclude this general discussion on
the Report of the Tariff Negotiations Working Party.
The next meeting will therefore take place at 10.30 a.m.
on Monday.
I should like to remind Members of the Committee once more
of the deadline which we have fixed for the submission of
amendments to Part III of the General Agreement. It will only
be possible for us to consider amendments which have been
submitted in writing when we cane to the detailed consideration
of Part III. Therefore all Delegations should submit amend-
ments before noon on Monday, August 11.
There being no further business, the Meeting is adjourned.
The Meeting rose at 1 p.m. |
GATT Library | zd961vp7938 | Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment : Verbatim Report. Seventeenth Meeting of Commission A held on Tuesday, 24 June 1947 at 2.30 p.m. in the Palais des Nations, Geneva | United Nations Economic and Social Council, June 24, 1947 | United Nations. Economic and Social Council | 24/06/1947 | official documents | E/PC/T/A/PV/17 and E/PC/T/A/PV.15/CORR.1-17/CORR.4 | https://exhibits.stanford.edu/gatt/catalog/zd961vp7938 | zd961vp7938_90240108.xml | GATT_155 | 14,217 | 85,937 | UNITED NATIONS
ECONOMIC
AND
SOCIAL COUNCIL
CONSEIL
ECONOMIQUE
ET SOCIAL
RESTRICTED
E/PC/T/H/PV/17
24 June 1947
SECOND SESSION OF THE PREPARATORY COMMITTEE OF THE
UNITED NATIONS CONFERENCE ON TRADE AND EMPLOYMENT.
VERBATIM REPORT
SEVENTEENTH MEETING OF COMMISSION
HELD ON TUESDAY, 24 JUNE 1947 aT 2.30 P.M. IN THE
PALAIS DES NATIONS, GENEVA
DR. E. COLBAN
(Chairman)
(Norway)
Delegates wishing to make corrections in their speeches should
address their communications to the Documents Clearance Office,
Room 220 (Tel. 2247).
NATIONS UNIES G 2 E/PC/T/A/PV/AYG
CHIRMAN: Well, it is a quarter past the time for the
opening of the Meeting, and although some Delegations have
not yet arrived, I wonder whether we should not start work.
I understand that we are in the middle of a discussion
on article 32, and that so far the discussion has dealt
indisoriminately with all the paragraphs of that Article.
The last speaker on the 20th was the Delegate of the
Netherlands. I understand that he has something to say about
his own Amendment, so I call upon him.
Mr. BOGAARDT (Netherlands): Mr. Chairman, during the
last Session I already defended the Amendment proposed by
the Netherlands Delegation.
I do not think I find much to add now. I made clear
that according to our point of view you have to distinguish
two meanings of negotiations about the maximum price margins.
The first one is on the bilateral base, on the same
meaning provided for in respect of tariffs.
The second one only applying to primary products ought
to be on a multilateral base, according to the procedure laid
down in Chapter VII. Our Amendment intended to make that
clear, and therefore we paid due attention to the procedure
laid down in the Article regarding subsidies, in which the
same definition is made.
CHAIRMAN: The Delegate of the United Kingdom.
Mr. SHAKLE (United Kingdom): I would like to say in
regard to this Amendment that our conception of this Article 32
looking at it in its existing form is that it is a counterpart - 3 -
of tariff negotiations. In other words, it is bilateral in
its conception, and we feel that it would be introducing a
a very considerable obligation if the procedure cf Chapter VII
- the multilateral procedure of Chapter VII - were to be
introduced in this place.
We feel it may call for a very definite procedure, and
for that reason we should prefer to see the Article maintained
on its simple, as it were, bilateral base as at present.
Thank you.
CHAIRMAN: The next speaker on my list is the Delegate of
South Afri ca.
Dr. HOLLOWAY. (South Africa): Mr. Chairman I would like
to make just one point in support of the U. S. Amendment.
The main object of this Article is to provide for
negotiation of State-tradling matters in the same way as we
have negotiation on tariff matters; but it seems to me that
having provided for that in Paragraph, the New York Draft
immediately proposes to limit the freedom of negotiation in
Paragraph 3 by dealing with one particular aspect of negotiation
and laying that down as a general rule. - 4 -
E/PC/T/A/PV/17
I do not think that any purpose is served when you get two
countries together to negotiate in limiting their procedure to
the sort of procedure that might be perfectly fair in one
particular instance, but might be entirely inapplicable in
another instance.
Paragraph 3 lays down the condition that the state trading
organisation should offer for sale,. and so on and so forth; but
the state trading organisation might be the only organisation
that is interested in the import, and therefore does not offer
it for sale to anybody. New, why a condition which does not
apply should be an essential condition--so essential that it
is written into the Charter--.I just cannot.see.
The American amendment,.gives more latitude, and I think
that,if two countries come together, the one that is
negotiating with the state trading country naturally goes out
for the best it can get, and the bigger latitude there is
for bargaining, the more prospect there is that one will get
liberalization of trade. As soon, on the other hand, as you
lay down an arbitrary condition that does not apply to the
particular trade, but is a condition enforceable under the
Oharter, you are undoing in paragraph 3 the very thing that
you set out to do in paragraph 1. M. C. IGONET (France) (Interpretation): Mr. Chairman, I would
like to state a concrete example in order to make quite clear what
we had in mind when we made that reservation last week, in support
of the caution which was advocated by my colleague from
Czechoslovakia. Well, this is the example which I would choose in
order to make our position quite clear, and it is drawn from our
experience in France. At present we have, in France, groups which
are called Groupements d'Importation et de Repartition, otherwise
groups for import and distribution. They are not state
institutions but groups representing different branches of our trade
and industry, and they benefit from importing monopolies for certain
categories of products. They were instituted at the beginning of
the war in order to meet the difficulties which prevailed at that
time in procuring some necessary supplies, and they are still
maintained because these difficulties have not been completely over-
come yet. Therefore, these groups are empowered to make purchases
both in foreign and, in some instances in domestic, markets,
and they are not entitled to any benefits under our present
legislation. Therefore, the re-sale price to the consumer on the
French market is approximately equal to the average purchasing price
of the same goods. We have, for instance, one specific Groupement
for nickel which make its purchases abroad and also in some cases in
France. Now, we have one nickel plant which cannot function over
a certain capacity for reasons which are not technical and which are
not connected with any currency problems either. The only reason is
that this plant needs a particular mind of nickel which is imported
from New Caledonia, and New Caledonia at present cannot produce this
nickel
type of/goods, because it does not receive a sufficient quantity of
coke from Australia. These, of course, are exceptional circumstances
because even if the currency was available the coke still could not
be procured. Therefore, this nickel producing plant has to work - 6 -
E/PC/T/A/PV/17
with a reduced activity and under very unfavourable conditions.
Cur desire is to maintain a moderate level of protection for
nickel in France, but at present we have a domestic price for
nickel which is abnormally high as compared to the price of nickel
abroad. In order to have an equal re-sale price to the consumer,
as our legislation provides for, we have to introduce an equalising
element. Well, this example that I have just stated may be useful
in explaining to some of my colleagues the difficulty there might be
in approving immediately and without any qualifications, the kind of
institution which is provided in Article 32. Of course, if might
be objected here that a solution might be fund in granting
subsidies to the national production which is at present under
difficulties, but we know from our own experience, that it is very
hard to obtain the said subsidies from our Parliament because they
are not regularly incorporated in any budget, and therefore it is
sometimes difficult to obtain them. The point I was driving at is
that it is necessary to provide some alleviating measure for the
temporary difficulties such as those I have just stated.
This is why, Mr. Chairman, I believe it is necessary to make
this kind of reservation to Article 32 in order to cover precisely
this kind of position, and I think my colleague from Czechoslovakia
might bear me out with some examples stated from their economy.
Mr . J.A. MUNOZ (Chile ): Mr. Chairman, at the end of our debate
last Friday we heard two very impressive speeches made by the--
delegates of the United Kingdom and Canada, against ethm aenedmnt
pro-
which the Utnied States delegation has/posed. Therefore, I am most
anxious to hear MrE. va'ns considereod pionnii n his answer. Inhe t
meantime, M r.Chairman, I would like to state briefly what ,we are
really considering in this articleW. e are particulary concerned
with istAh rticle insofar as it relateso t pexort monopolies, thats i
paragraph 1 and sub-paragraph (a). iWhle we do not objecto t the -7 - E/PC/T/A/PV/17
general principle set forth in this paragraph, we do feel that the
said provisions should only apply when a substantial proportion of
the monapolised product in relation to the total production is
consumed in the country of origin. That is, we consider that the
provisions of paragraph 1 (a) should not apply if the total exports
of the monopolised product exceeds 90% of the total output. If
such a high percentage as 90% of the total production of the
monopolised product is freely exported, we do not see how any member
having, a substantial interest in the trade of the product concerned,
could be affected if, as regards only 10% of the total production,
domestic users are given price protection. We therefore would
suggest that this proposal, which we consider entirely justifiable,
be given full consideration when the Sub-Committee meets. E/PC/T/A/PV/17
-8-
CHAIRMAN: The delegate of the Netherlands.
Dr C.H. BOGAARDT (Netherlands): Mr. Chairman, I want
briefly to reply to the observations made by the United Kingdom
representative. He described the Netherlands amendment as
having introduced a cumbersome element which would provide for
very lengthy and perhaps not very useful discussions.
I might point out, Mr. Chairman, that if you want to have
any negotiations at all as regards the maximum margin, I am
afraid you have to resort to the multilateral method of
negotiations. I mean this: all price stabilisation schemes
work like that - that you fix the difference between a world
market price and a stable inland price; that is to say that you
must know the amount of the world market price and you must
know your ow- stable inland price. If you do not know the limits
between which the world market price can rise and fall it is
absolutely impossible to fix your maximum margin.
I gave last session the instance of wheat. In this example
the wheat price rose in seven years from 85 cents to 3 dollars
a bushel. I think it is quite clear that it is absolutely
impossible to fix any margin in view of the fact that the world
market price is unstable like that, so I am afraid that, however
cumbersome this element may be, you cannot avoid resorting to
these means of negotiations.
CHAIRMAN: The delegate of the United Kingdom.
Mr. R. J. SHACKLE (United Kingdom) Mr. Chairman, if I may
add just one word on the point raised by the Netherlands delegate:-
In the first place we contemplate averaging over time. That is
contemplated by the last sentence of paragraph 1 of this Article 32
- "regard may be had to average landed costs and selling prices
of the monopoly over recent periods." We quite appreciate, of E/PC/T/A/PV/17
course, that that would not mean absolute stabilisation. It
would mean that your stabilisation would be a relative stabili-
sation by which, as the world price wont up and down, your
domestic price would, to some extent follow, but so to speak,
the curve would be very much flattened. That was the conception
we had in mind.~
CHAIMRAN: The delegate of Norway.
M. T. OFTEDAL (Norway) : Mr. Chairman, as stated on a
previous occasion the Norwegian Deleagtion feavours the New York
draft of Artcile 32 with a minor cahneg in paragarph 4.
Article 32 sets forth taht state monopolies should negotiate
maximum price margins for the products involved. Such negotiations
will have to take place on the same basis for all kinds of
monopolies, except that due eragrd should be had to the fact that
certain monopolies are established mainly ofr revenue purposes
s provided for in patagraph 4.
The Norwegian Delegation believes it to be of importance
that the provisions of Article 32 take into account that mono-
polies may be established for purposes which are different in
their scope. Some monopolies may be established solely for
protective reasons. Others may be established for purposes
which are of a non-commercial nature. The New York draft recog-
nizes one such category namely revenue monopolies, as I have
already mentioned. However there are others which should be
recognized also, for example, monopolie s established by a govern-
ment in order to promote its social welfare policy. The Norwegian
Delegation is of the opinion that separate rules should apply
to monopolies of a non-commercial nature and that appropriate
provisions should be included in article 32 to this effect. We
have therefore proposed an amendment where we suggest that mono-
polies established for cultural, humanitarian and social welfare
P. E/PC/T/A/PV/17
-10 -
purposes should be included in paragraph 4.
To illustrate our point of view I should like to mention
that we in Norway at present have two State trading enterprises,
one belonging to the first, the other to the second category.
They are the State Grain Corporation and the Wine and Liquor
Monopoly; both of which were established by Act of Parliament.
The State Grain Corporation has as its main purposes the
securing of adequate supplies and the protection of the domestic
producers. It may be mentioned in this connection that Norway
produces only about 20% of her consumption of bread grains and
is therefore more Dependent on grain imports than most countries.
The protection to the domestic producers is afforded through
paying them a higher price for their grain than the world market
price. Another feature of the Corporations activity is to
stabilize the price of grain and the price of flour to the
consumer and thereby also bread prices. The Grain Corporation
has worked to cur full satisfaction. However, we concede that
the Corporation is protective in nature and we are prepared to
negotiate for an average protective margin in accordance with
the provisions of Article 32.
The Wine and Liquor Monopoly, on the other hand, cannot be
regarded as a commercial protective measure as it was established
for and is operated mainly for social welfare reasons.
There seems to exist in the Northern European countries a
somewhat different attitude towards alcoholic beverages than in
countries of milder climates, an attitude which other countries
may have difficulty in understanding. - 11 -
L. E/PC/T/A/PV/17
The free sale of alcoholic beverages created so many serious social
problems that it became necessary to regulate the sale in some way
or another. For the past twenty years such regulation has been done
through the price policy of the Wine and Liquor Monopoly. If we
should negotiate the price policy of this monopoly in accordance
with the provisions of the New York draft, it would mean that the
social welfare policy of Norway would be subordinated to its com-
mercial policy, which would not be in the spirit of the Charter.
The solving of social welfare problems is very much in the
foreground in the political life of the northern countries. I am
speaking only on behalf of Norway, but when I refer also to the other
northern countries it is because practically identical conditions
prevail in Sweden, Iceland and Finland.
The Norwegian delegation raised the same question at the first
session of the Preparatory Committee. What we propose is a minor
change which as far as we can see would not weaken the Charter in
any respect. To us this change is important, and the Norwegian
delegation trusts that the Sub-Committee, which this section probably
will be turned over to, will give the Norwagian proposal careful con-
sideration.
CHAIRMAN: Before we hear the United States delegate I would
like to say this is somewhat outside the discussion. I would like
to finish the discussion of paragraphs 1, 2 and 3 Article 33.
before eventually taking a discussion on paragraph 4, where also the
Czechoslovakian delegation has made a proposal.
. L. . - 12 - E/PC/T/A/PV/17
Mr.aOHN W. EVANS (United St.es): In asking for the floor,
I inteeneded to stik to the Nqh&lands ame ndment on paragraph 4,so
tt I shall. e very glad to wait until lclater if you wish to dLr
up the earlier paragraphs.
dMlAg ?M The iclet of Canada.
MrXJ jEDUTSH (ICanada): 1 wated to speak also on the
points raioseedi by the Nrwgan and the Netherlands delegates.
CAIPAU e Are thore ay further orators on paragraphs 1,
2 and 3? J. e . . - 13 - C A/P 1/P}/T/4-l2V/l7
KLEM. R.J. ZIh (United IKindom): Mr. Chairman, I am not
an orator, but I have a few things to say.
Inthe first plmace, I aiinclined to think after listening
to this debate that 3Article 2, particularly paragraph 1(b), may
be rather too tightly drawn at present. It may be too narrow and
too detailed ein its trms, and I would therefore like to suggest
cfor theoosideration of tchme sub-giittewee that vmight consider
some rather broadera formultion whseich, esntially, would run to
sometheing lik ethi'.
We might start s oingff byay, ratheer in th terms of the
openi pfart ol he UnSiateseamd dm6tt~.ieat,ce tht oaain arrangements
shall be negotiated feor th purpose of limiting orc rgeduin the
protection affordeodg thruh, the operation ofm the onopoly to
domestic ceprodurs of rtduche pote. On would then go on to say
that for that purpoMesee mbrs shegalla notite on the relatioanshi
between the lanrdced pie eof th product eand, itheer on of two
things - the price at which the product is re-sold to the home
mcons.r, or the seconde.alt native is the price paid to thme hon
producer.
That gsbrin v .suggestion whichi .h was made by the Canadian
delegate on the last occasion when wscussed die tmhis atter: that
the epric to the home producer might b e aenaltrneativ test to the
price charged to thme,e h consumer.
I woulde lik to suggest that the sumb-comittee should think of
some simplified formulation with those anlteratives. I think we
might very well omigt a reat deal of detail ifd we o that - details
about subsidies, about profim,rgat insa, nd so on. I would like to
mmerecond thatgf suenstio teo th csumb-omiitte.
There is just on other point tIhat would like to manke ad
that relates to paragraph 3. The poointa f paragrph 3, as I - 14 -
understand it, is not a rule for negotiating at all. It is a rule
to be observed by the monopoly, and the idea of it is that the
monopoly shall, broadly speaking, satisfy domestic demand. The
point of that, as I understand it, is that if the Monopoly does not
satisfy domestic demand it will be in a position, as it were,
automatically to apply quantitative restriction. It does not
need to do anything beyond that. Therefore, I think it is
necessary, if your are to prevent a kind, of quantitative restriction
being applied almost automatically by monopoly, to lay down that
the monopoly shall satisfy domestic demand. That is how I
understand paragraph 3, and I do not read it as bearing upon the
process of negotiation. Thank you very much.
CHAIRMAN: The delegate of Canada has asked to speak. Is
that on the same point?
MR. J.J. DEUTSCH (Canada): Yes. Mr. Chairman, at our last
session it was thought by some that the requirement of article 32,
paragraph 1, where you have to negotiate the margin between the
buying price and the selling price, was somewhat too restricted,
and in that connection I suggested at the same time that we might
include also the margin between the buying price and the price
paid to home producers. I felt that if that addition were made
it would take care of many of the technical difficulties that are
associated with negotiating the margin between the buying price and
the selling price, and for that reason I very much support the
definite proposal that has now been made by the Member for the
United Kingdom.
I, like him, feel that with that addition the provisions
of this paragraph will take care of the technical difficulties that
have been raised, and I, like him, agree that this matter should
E/PC/T/A/PV/17 -15 -
E/PC/T/A/PV/17
be closely examined by the sub-committee.
In saying that, I realise that this does not include a number
of the provisions of the American proposal, namely, the negotiation
of the total quantity, or the negotiation of any other method, and
that it is not including Mr. Shackles proposal. It is those two
aspects which I took particular objection,to, and I still maintain
my objection to the introduction of the negotiation of quotas in
this section for the reasons stated the other day. Mr. Shackle 's
proposal would retain this paragraph as an exact parallel, or a
parallel, to the tariff negotiations, which is what we should try to
do here. Mr. Shackle 's proposal would maintain that parallel. G - 16 - E/PC/T/A/PV/17
Furthermore, in respect of paragraph 3, I also agree
that in this we have a paragraph containing the principle
enunciated here -State-trading organisations could automatically
use quantitative restrictions by simply adjusting their
purchases according to the quantities which they wish to
import.
That means that they are at liberty to use what is
equivalent to a quantitative restriction.
Now quantitative restrictions are rule out with respect
to items in which State-trading does not take place. That is,
rule out in so far as the exceptions are not applied; and
we feel that if the proper balance is to be maintained in the
Charter, the use of quantitative restrictions must apply
equally regarding State-trading enterprises. For that reason
we also feel we need something along the lines of the present
paragraph 3.
Thank you, Mr. Chairman.
CHAIRMAN: The Delegate of Australia -
Mr. Mc CARTHY (Australia): Mr. Chairman, the problem one
fines in examining this particular Article or Section is the
endeavour to introduce something which will take the place of
the negotiations on tariffs in the one case, and the
quantitative restrictions in the other; and we feel that in
Article 32 the best that can be done pretty well has been done.
We can see that in certain transactions it will be possible to
negotiate margins, that is, margins between the landing cost of
the imported goods and the price at which they are distributed
- the values at which they are distributed relative to the
values of the home-produced goods; but in others it will be - 17 -
extremely difficult, and the more detail you put in, and
the more criteria you endeavour to set down, we think the
greater difficulty you will have in getting a result.
I think it is quite conceivable, in the case of wheat, for
instance, or sugar, or butter, that a long-term contract between
sellers, or a seller and a State trader importing, could be
negotiated pretty thoroughly, even though the mixing of the
home produced product with the imported product is, quite
extensive. There you have got a standardised criterion
and it will be possible to trace the margins, identify them, and
then possibly negotiate them; but there are other products
which after landing go through various processes and where the
actual capacity to compare those products with the competitive
products within the country is extremely difficult.
Meat, I believe, would be quite Difficult; because
you have got different classes, you have got the different
processes, and the replacement of some form of comparison
between the states which the meat goes through between the
imported product and the home product, or the replacement of any
such processes by other processes, would be extremely difficult;
so therefore we rather take the view that Article 32 should
stand with certain Amendments on the lines of making clear to
the objectors.
If it is states clearly what is desired to do, to actually
replace any other protective measures that stand in the case of
a private transaction by such an examination as will enable the
margins of difference to be negotiated, then I think it will be
found, according to the different products, that a quite
different process of examination will be imposed, and you will
be in the position of doing the best you can. G. - 18 - E/PC/T/A/PV/17
Now the suggestion of Mr. Shackle and Mr. Deutsch -
the comparison of the imported price with that of the home
produced article - would be, I think, quite applicable in some
cases. In. others, it would be four difficult.
Also, the other point mentioned, that of, I think, the
prices at which the product is re-sold to the home consumer,
would in some cases be easy and in other cases difficult.
The next other point we wish to mention is the suggestion
by the American Delegation: the total quantity of a commodity
which the Member maintaining a monopoly shall agree to import
from all sources. We find difficulty in seeing the point in
that, and in seeing that it would be of any great value, unless
you have a thorough-based arrangement on quotas.
The interest of a untry selling to an importer would
be in the quantity which he wished to sell himself, if he were
dealing in quantities. If he were able to sell all that he had
to sell, he would not be very interested in the total imports
of that country. If, however, the importing country said,
Well, we cannot take any more from you than the hundred
thousand units or whatever it was because of the requirements,
or the quantities that we want to take from somebody else, the
seller then would be interested in saying, "But what are your
total imports?". The next point would be, having arrived at that,
what has happened to the balance; and the balance would be that
sold by other countries. So there I think you would depart
entirely from the bilateral element, in the transactions visualised
in this, and go into the multilateral field. E/PC/T/A/PV/17
That take you to the Netherland idea of employing the
provisions of Chapter VII. There, I think, you are undertaking
something which would have to be very carefully worked out.
Chapter VII, as it stands now, would, to my mind hamper very
much the activities of state traders: so much so, that I think
it would be found that they would either have to depart from
their state trading or declare their inability to meet the conditions
of ChapterVII. It does not follow at all that there is not
something in it. In fact, the negotiations which recently took
place on wheat indicate how far state trading can be introduced
into/Chapter VII agreement, but, without going into the details,
it would take a long time.
I think it can be said that wheat is an exceptional case. It
is exceptional in its susceptibility to an international arrangement,
and in the fact that, at the present time, importers are more eager
than they normally are to commit themselves so far ahead; but the
arrangement which was recently discussed and carried well forward
in draft form would really amount to a multilateral state trading
transaction. However, the detail that was covered in those
negotiations indicates that, it would not be practicable to cover
many state trading transactions by a multilateral agreement under
Chapter VII.
Our conclusion, then, would be that this suggestion which is
in the American proposal to negotiate totals does involve rather
closely the negotiation of quotas over a number of countries, and
that could not be done except by a detailed multilateral negotiation,
which we think is not contemplated under this Chapter and would not
be practicable. If it were introduced into Chapter VII, then
Chapter VII would have to be amended to remove or adjust some of
the conditions already laid down.
CHAIRMAN: There are two speakers on paragraphs 1, 2 and 3,
and three speakers on paragraph. 4, and we must finish our work
today, so I hope all the Delegates will be as short as possible.
The first speaker is the Delegate of China.
VI ER
- 20 -
Dr. T.T. CHANG (China): Mr. Chairman, we have not yet taken
up the Chinese proposal in connection with paragraph 1, Article 32.
Do you think we could discuss it now? If so, we shall proceed with
the explanation of our Proposal, which is to delete, in the first
lines
sentence of sub-paragraph (a), part of line 13,/14, 15 and part of
line 16, which read: "to limit or reduce the protection afforded
through the operation of the monopoly to domestic users of the
monopolised product or... " We propose to delete these words be cause
we feel that it is already provided in this paragraph for arrangement,
designed to assure export of the monopolised product in adequate
quantities at reasonable prices. It should be equally sufficient
for our proposal here, and there appears to be no need or justific-
ation to interfere in matters of purely domestic concern, as more
of that will only complicate matters and make negotiations between
the members concerned considerably more difficult. Therefore
we think that the lines in question are not necessary, and that it
is desirable to delete them. Now, may I say a few words in
connection with the question of margin. Much was said last Friday
and today both against and for the inclusion of the margin in this
Article. Just now I do not have very strong views on this question.
However, should it be finally decided to retain these lines in this
Article in connection with margins, we would like to see a reference
made regarding a margin of profits. In the London Session it was
considered desirable to make allowance for a reasonable margin of
profits, and we would like to see the London position maintained.
Mr. L.C. WEBB (New Zealand): Mr. Chairman, I think this is an
appropriate time to say that we support the Czechoslovak delegations
draft of Article 32, because it seems to us to have the benefit of
establishing a procedure which is in conformity with/economic reality
and administrative reality. We feel that this attempt to establish ER
- 21 - E/PC/T/A/PV/17
here an exact parallel to the tariff negotiations is pursuing the
idea of equity to a rather unreal extreme. We seem to be in the
position of people who built a stable to accommodate horses and were
suddenly faced with the problem of accommodating elephants, and we
decide that equity is the only way to treat the elephants the same
as horses. It seems to be ignoring the facts of life. We feel
that in some case the procedure of negotiating margins may be
possible. It is equally demonstrable that in other cases it is
just not possible. In connection with Article 32, we are also
worried by another point and it is roughly this, that very often
where you have state trading monopolies the operation of those
monopolies enters very intimately into domestic policy, and the
instance we have in mind concerns (a) in Paragraph 1, which imposes
an obligation in the case of an export monopoly to negotiate
regarding the protection which may be afforded to the operation of
a monopoly to domestic producers of the monopolised product. New
we have certain export monopolies which both export and supply the
local market, and we also have an overall system of price control
which is particularly designed to stabilise the cost of living, and
on that policy or basis of stabilising the cost of living we base a
wages policy, and on the whole it works very well. Now, it seems
to me that we will be involved in a negotiation which may have
serious consequences on our whole domestic stabilisation policy and
our Wages policy because the principle which operates throughout
price control with us, is the principle that the producers of the
commodity for the local market are entitled to the cost of production
in a reasonable margin, and we feel that there would be very great
difficulties in any system which involves - as this system seems to
involve - the price of the commodity on the local market following
overseas prices, even though, as Mr. Shackle said, the curves in the
case of the local market might be somewhat flattened. In many cases
since the abandonment of wartime price controls, prices in the world
market for certain commodities has gone up to somewhere about three
times the domestic price of the commodity in New Zealand. P.~~~~~2 -
22 -E/PC/T/A/PV/1 7
an we would find it very difficult to contemplate a stcep whia
would in effect involve allowing fluctuations in overseas prices,
very often very violent fluctuationsp, to uset our whocle prie
stabilisation policy.
I would like in conclusion just to ask one question,
Mr. Chairman, and that is a question in relation to Article 31.
I merely wish to ask whether it is proposed, as apparently it
was originally proposed, that this Commission should discuss the
joint draft of Article 31 which I undersstand i being prepared
by the Czevchosloak and American delegations, or whether it is
proposed to send that directly to the Sub-Committee without
further discussion here.
ANC.I, In reply to that question, I would say that this
oint proposal has not yet been sent to the Secretariat and, as-
we shall probably not have time today, even if we had it distri-
buted, today, to discuss it, I propose that it should go direct
t the Sub-Committee, but should be distributed to all the
delegations as an ordinary Preparatory Committee paper, so as
to enable any onoe f them who might be interested to appear before
the Sub-Committee when the question is discussed there.
The delegate of thee Ntherlands.
DR. C.H. BOAGD.RTN (etherlands): Mr. Chairman, I associate
myself with the words omf y New Zealand colleague when he said
that thiAs rticle constituted a very considerable interference
in internal affairs.
The Netherlands, just like New Zealand, has a stabilisation
scheme which attempts, by controlling inland prices, to control
the cost of living and wages. Therefore, Mr. Chairman, I think
thAe ustralian delaegte is wrong when he said that the procedure
i^Qdown in Chapter TVI would prove extremely difficult for
stat -trading countries. I cited the instance of the Wheat P.
- 3 _
E/PC/T/A/PV/17
Agreement we tried to conclude in London. One of the main
items of the Wheat Agreement was to stabilise the wheat price
at certain level. Therefore, if we had succeeded in coming
down to an agreement we should have contemplated fixing a
maximum margin, that is to say, to fix tho difference between
the world market price and the stabilisation inland. Netherlands
price. Furthermore the Australian delegate remarked that only
for wheat would the multilateral negotiations and commodity
agreement prove successful. I wish to draw your attention
to the Agreements on tin, rubber and sugar. The Sugar Agreement
contains many provisions which you can find, also in Chapter VII,
Moreover, the Netherlands and the overseas territories, both
state-trading territories, participate with much pleasure and
much success in the operation of that agreement.
As regards the provision about average landed costs, to
which my British colleague referred, I think that as long as
the limits between world market prices are so wide, it is not
worth while to fix a maximum margin, which must reflect this
fluctuation on the world market.
Moreover, we advocate that a study of the roots of the
causes to which this excessive fluctuation is due should accom-
pany these negotiations.
This all can be embodied in commodity agreement which
provides for reasonable prices for consumers and producers alike,
I think that the ,troubles of this unhappy world are caused
by Instability of prices and economy which has reflections on
all aspects of human life. One of the means to alleviate this
burden, we have in the commodity agreements. The commodity
agreement disposes, at one and the same time, of all questions
about subsidies, countervailing duties and so on.
To finish, may I once more draw your Attention to the same
procedure as proposed in our amendment, laid down in Article 30. E/PC/T/A/PV/17
CHAIRMAN: I call on the delegate of Chile. We have one
more amendment to take and I hope it will be the last.
Mr. J.A. MUNOZ (Chile): I could like to add a few words only.
I understand the sub-committee on Chapter VII is dealing with this
question of the reference. of Section E to Chapter V. We are even
playing with the idea of eliminating any reference at all to the
section in Chapter V; I therefore think we should discuss here the
nuance between these two things, and it would be much. better left to
the sub-Committee to see what happens after the deliberations of the
sub-Committee on Chapter VII,and what conclusion they arrive at.
CHAIRMAN: The delegate of Czechoslovakia has something to say.
Mr. B.J. BAYER (Czechoslovakia): As at the previous meeting of
this Commission I gave a broad outline of the general position of my
country with regard to Article 32, I do not wish at this stage to
make a long comment and go into many details which otherwise might
be desirable in order to support the amendment we submitted in docu-
ment no, W/187. On the other hand, I wish to say that the provisions
contained in Article 32 are very important for my country. That is
why we have gone into them, and that is why we want to have the
provisions contained therein as clear as possible, and in the first
place, more adjusted to realities, and more fitted to face the
present problems.
It has been pointed out earlier in this discussion that under
many circumstances it is not practicable to negotiate a margin
between the landed costs and the selling price. I will mention only
the reasons the delegation for the Netherlands and the delegate for
New Zealand gave this afternoon. We are facing the same problems
with regard to negotiating the margin in those articles which are
L. -25-
E/PC/T/A/PV/17
subject to a price stabilisation policy at home.
I will point out some other difficulties. We have, for in-
stance, a monopoly on cinematograph films in my country, I can hard-
ly imagine how a monopoly of films could negotiate a margin in between
the landed costs and what might be the price of the tickets to the
consumers, the visitors to the performance.
Wo have amplified the text of Article 32, a text which consists
primarily in the provision to assure export or import of the mono-
polised products in adequate quantities at reasonable prices. We
have also in this connection drawn the attention of the Preparatory
Committee to a statement made recently by the International Chamber
of Commerce:
"This Article, by attempting to establish principles for
the price policies of State monopolies of individual products,
enters into a very difficult and controversial field, and estab-
lishes rules which will inevitably become the object of future
controversy . The International Chamber of Commerce considers
it preferable to limit the Charter's provisions concerning the
behaviour of State monopolies: of individual products to simple
general rules leaving the detailed interpretation and administra-
tion at those rules to the I.T.O. itself.."
You are very well aware of the difficulties which may arise in the
future and the possibilities of controversy.
We have studied the amendment submitted by. the United States
delegation, and although we are not in a position to commit ourselves
at present as to our position with regard to the whole Article 32 as
proposed by the united States, we may say that we are in favour of
the substance contained therein, because the underlying idea is the
same as the idea which governed our own amendment. -26-
J. E/PC/T/A/ PV/17
I may take this opportunity to answer the question raised by
the New Zealand delegate with regard to the proposed joint
amendment of Article 31. We have discussed Article 31, but we
were not so far able to submit a complete draft. We thought that,
with the permission of this Commission, we may submit it to the
sub-committee as you, Mr. Chairman, said it would be distributed to
all the members of the Preparatory Committee.
CHAIRMAN: This closes the discussion on Article 32,
paragraphs 1, 2 and 3.
MR. J.W. EVANS (United States): Mr. Chairman, 1 am sorry but
earlier I asked for the floor and relinquished it because I thought
that paragraph 4 had not yet been reached..
CHAIRMAN: We have not reached it yet.
MR. J.W. EVANS (United States): I am sorry, but I thought you
said we had finished the discussion on article 32.
CHAIRMAN: No, only paragraphs 2 and 5. We now pass on
to the consideration of paragraph 4 and the first speaker is the
delegate of the United States.
MR. J.W. EVANS (United States): Mr. Chairman, under the
circumstances, I should be extremely embarrassed to re-open the
discussion on earlier paragraphs, so that some remarks which I
would have made about recent discussions on the American amendment
I will reserve for a later date.
I do want to speak though to the Netherlands delegation's
proposed amendment to paragraph 5. It seems very difficult for us
to see what part Chapter VII could possible play in the kind of
negotiation which is contemplated in Article 32. As we understand - 27 -
Article 32; its intent is to set up an obligation on the part of
the country which maintains a state trading enterprise to
negotiate in a manner which would be comparable with the negotiation
required of a country with private trading with respect to tariffs.
Presumably, that visualises a situation in Which a exporting Member
would like to see the conditions in the importing country for the
import nation of his products improved ;...
It soto us teo bc a ituation which is definitely bilateral;
situation in which the principle supplying country has sotme hing
to ask of the importing country concerned. The only difflicuty
involved, presumably, isetho difficulty created by any empmei ant
which the impongii; country ray have placed on the free imtor ation
of the product of the exporting country.
That does notemeoa to us to be at all the kind of difficulty
that is contemplated in Chapter VII, nor does theocercceur3 of
Chapter VII involve a very long drawn oat ;ndaeliboeato procedure
for developing the interesas ;ndetho views all_11 exporting
cunteics anall2.mii.orting countries of the cmomrdity concerned.
It does not smea to be in any way appropriate for the tepo of
negotiation contemplated hero.
Our difficulty, though, im iore than miLply that logical one,
If there ia _n obgae;tion on eho part of the importg .cosu ntry to
negotiate, it seems to us that that obligation would be very
seriously diluted and impeded if, by the simple device of suggesting
procedures under Chapter VII, the importing country could postpone
doing anything for an mlnost indefinite length of mein.
'j feel,ufarermoiero, that in those cases wherc there is a
genuine problem of ehki,dn. for which Chapter VII has been drawn up
there is no necessityo far ny mention of it in the State Trading
"ticles of the Chratvr. Chapter VII, internally in its own terms, - 28 -
E/PC/T/A/PV/17
would permit the opening of the kind of discussion which apparently
the Netherlands delegation has in mind.
Therefore, the United. States delegation would object to the
introduction, not only of this specific amendment suggested by the
Netherlands delegation, but to any variation on that amendment
which would tend to transfer the negotiation contemplated in
Artiole 32 into the procedures contemplated in Chapter VII. E/PC/T/A/PV/17
CHAIRMAN: 'The Delegate of the United States said some
time ago he wanted to speak on the Norwegian proposal.
Mr. EVANS (United States): If I did, Mr. Chairman, I think
I must have misspoken, and had in mind the Netherlands
Amendment.
CHAIRMAN: I thought so.
The Delegate of Canada also wanted to speak on the same
subject.
Mr. DEUTSCH (Canada): I wanted to speak, Mr. Chairman; on
the Norwegian proposal. That is in order?
CHAIRMAN: Please.
Mr. DEUTSCH (Canada): I think the Norwegian proposal is
in principle a logical one, and. for my part I would support it
in principle and hope that the Sub-Committee will look into the
matter of the exact wording.
I am not entirely happy about the exact wording here, but
I think the main point he wishes to make is acceptable to us.
CHAIRMAN: Does the Delegate of Czechoslovakia want to speak
on the same paragraph?
Mr. BAYER (Czechoslovakia); Mr. Chairman, I do not want to
add much to what has been said with regard. to the proposed
amendament of paragraph 4, in the light of the amendament made by
the Delegation of Norway.
I may say that we have been led, more or less by the same
considerations in submitting our own Amendment, In our view, the
paragraph 4 does take due regard of the fact that some monopolies
G
: - 29 - - 30 - --, -,/--,
that have been established are being operate maheinly for t
purposes other than economic. We think, therefore, that
besile the revenue purposes, which are the collection of taxes
Sir, other purposes - dith regarC to culture, national health,
ant so forth - might be puat on the sme level.
Of course, we are aware of the fact that the final outcome
of paragreph 4 might depend upon the solution of the first
three paragraphs.
Thank you.
CEIIRMAI: The Delegate of the Netherlands.
DMr. BOG.1JT (Netherlands): Mr. Chairman, peyhaps I mae
refer very briefly to taedNetherdapnts amenlment, I know that
you closet the Discussion, but I hope you will give me the
opportunity to answer very briefly.
I fut deny, maMr. Chairr, very strongly, that our
Delegation tries to obstruct the nnegotiatios about tariffs.
1 think it is a more or less serious charge against our country,
which tries to conform as much ad it coul5 to the rules of
procedduwnre laid o for tariff negotiations.
We are peafectly hippy to negotiate, but we find. it
impossible to negotiate about price margins, which cannot be
define;, because one of the necessary factoks is lacding.
This factor can be provided bdia commo.-ty agreement
Furthermore, negotiations on a bilateral base imply a tremendous
lot of negotiations, as not only the principal supplier but
all suppliers have to negotiate about a margin, as all prices
have to be increase to the existing general inland prices.
COLIZ : The Delegate of the Uniteo. Kingdam.
A//P/1T I'PV A7
G. G. - 3l - E/PC/T/A./PV/17
Mr. SHACKLE (United Kingdom): Mr. Chairman, I would just
like to say a word about the Norwegian Amendament. It does seem
to us in its object it is entirely right. It does occur to us
that possibly ihe same Amendment rather bears on article 37 -
the Exceptions Article - which already has some except ions
concerning the protection of public health and morals, and
that that might conceivably be more appropriate than this
Article; but we think the obvious principle of the Norwegian
Amendament is certainly right.
CHAIRMAN: The Delegate of Chile.
Mr. MUNOZ (Chile): Mr. Chairman, I concur with the remarks
made by the Delegate of Canada. As regards the Norwegian
Amendment, I think it is a very good and useful one, but again
I feel it could be left very safely in the hands of the Sub-
Committee. V
- 32 -
E/PC/T/A/PV/17
CHAIRMAN : - This., I think. terminates the examination of
Articles 31. and 32, and I propose, after having heard the
views of certain Delegates, that we should appoint an ad hoc
sub-Committee for these two Articles alone and another
sub-Committee for Article 33. As members of this sub-Committee
for Article 31 and Article 32, I would suggest the Delegations
of Czechoslovakia, the United States, Canada, Norway, France
and the United Kingdom ; and I would like to add that everyone
who feels interested in the work of the ad hoc sub-Committee
is, of course, free to attend and to explain his viewpoint in
the sub-Committee.
The Delegate of Czechoslovakia.
M. B.J. BAYER ( Czechoslovakia): Mr. Chairman, I-understand
that the New Zealand Delegation is interested in the provisions
of Articles 31 and 32. May I suggest that this Delegation,
if it wants to, be added to the list of members of the
sub-Committee?
CHAIRMAN: The Delegate of Chile.
M. J.A . MUNOZ (Chile): Mr. Chairman, I do not know whether
I am in order or not, but we have presented an amendment to
Article 31, paragraph 3, and we are really also very interested
in both Articles 31 and 32. Therefore , I am sorry, but I
would like to propose ourselves to be on the sub-Committee;
otherwise it is going to very difficult for us.
CHAIRMAN: Well, I have, of course, no other interest than
to keep the sub-Committee as restricted in membership as possible;
but, on the other hand, I quite appreciate the desire of those
who have presented amendments to be members of the sub-Committee. V. -33 -
With regard to New Zealand: the New Zealand Delegate is
particularly interested in Article 335 and if I should then be
in the Chair I will certainly propose his Delegatior as a
member of the sub-Committee for Article 33. Whether the
New Zealand Delegate has any real interest in being a member
also of the sub-Committee for Articles31 and 32, I cannot tell.
His Delegation will, of course, always be entitled to send some-
body to attend the sub-Committee and to express his views on
a footing of complete equality with other members. My own
conclusion in order to keep the sub-Committee down to reasonable
limits, would be to add the Delegate of Chile, but not the name
of New Zealand, for the reasons I have explained. May I ask the
Delegate of New Zealand whether that suits him?
The Delegate of New Zealand.
Mr. L.C. WEBB (New Zealand): Well, Mr. Chairman, you
put me in a difficult position. I would say immediately that
we are very keenly interested in Articles 31 and 32 for the
obvious reason that practically the whole of our export trade
is conducted by the method of state monopoly. However, I
realise the extreme difficulty you are in, and I would like to
make just one observation which I think might, perhaps, find
a way out.
I have had some experience of acting as an observer at the
proceedings of a Committee, and I hope it will not be inter-
preted as a criticism if I say that, in fact, although we receive
every possible assisstance from the Chairman and the members of
the Committee and from the Secretariat, nevertheless the way
most Committees are functioning at the present time, I think,
it has to be said that an observer under present circumstatces
E/PC/T/A/PV/17
- 33 - V. - 34 - E/PC/T/A/PV/17
is at a very considerable disadvantage, owing to the over-crowding
of the rooms and the frequent fact that full supplies of papers
are sometimes available to members of the Committee but not always
readily available to observers; and I was wondering whether, in
view of the very keen interest there is in this particular
article, it could not be arranged for the Committee to meet in
rather more comfortable circumstances. To mention just one
point: observers at a Committee meeting usually have to sit along
the wall, they have no table to work at, no table for their papers.
I would be suite happy if those physical disadvantages which
affect the work of observers could be overcome.
CHAIRMAN: The Delegate of New Zealand said that I was in
a rather difficult position. I am not, because I am in the hands
of the Commission, and if the Commission will, as an exceptional
measure, agree to set up an ad hoc sub-Committee that is somewhat
larger than usual, I think it would be very easy to add the name
of the New Zealand Delegate to the list of regular members. we
may defend it, because really this has proved to be a very
important and very difficult matter. We have discussed it at
the whole of the meeting of the 19th, the whole of the meeting
of the 20th, and now for two-and-a-half hours today, so I think
that is justification enough for setting up a sub-Committee on
which all the most interested Delegations are represented.
Is that agreed? (Agreed)
We now pass on to Article 33. E/PC/T/A/PV/l7
-35-
The Chair was now taken by M. MAX SUEPENS (Belgium) in place of
Dr. E. COLBAN.
CHAIRMAN (Interpretation): Now we pass on to the discussion o:
Article 33: Expansion of Trade by Complete State Monopolies of
Import Trade. I will remind the Commission that the Drafting
Committee did not discuss this Article at the First Session in
London, but left it for a later stage. We have th. > amendments on
this Article; by the United States delegation proposing to delete
this Article; by the Czechoslovak delegation; and finally an
amendment by the New Zealand delegation. I will give the floor in
succession to these three delegates. First of all the delegate for
the United States.
Mr. JOHN W. EVANS (United States): Mr. Chairman, our proposal
that Article 33 be deleted is necessarily closely related with our
proposals for Articles 31 and 32. The Canadian and the United
Kingdom delegates have indicated, with a good deal of force, a great
many objections to the negotiations of global purchase oommitments
in individual products, and it has been our feeling for some time
that those arguments can be applied even more forcibly to the sort
of negotiation that was contemplated in the draft of Article 33,
the negotiation
and that was by the importing country of all of its imports from
member countries. We felt that it was not a practical provision
net one that could be very useful. I think, judging from the
discussion of our amendment to Articles 31 and 32, that there will be
very substantial changes made particularly in Article 32, some of
which at least, I am sure, will be proposed by ourselves. But if
Article 32 retains one basic principle which we attempted to write
into it, andthat is a provision for some additional sort of
negotiation, at least an additional negotiation different from the
one on marginal mark-up, in those cases where the nature of the E/PC/T/A/PV/17
jmporting countries and the nature of their economy is such as to
make the .marginal mark-up unworkable and rediculous, then we feel
that there is no further necessity for an Article 33.
Mr. B.J. BAYER (Czochoslovakia): Mr. Chairman, we have actually
made no amendment with regard to the proper text of ArticIe 33. We
had already the opportunity to state that we are not having the
complete monopoly of foreign trade and our domestic economy is not
concerned by the text of Article 35. At the same time, we expressed
our view that the text of this Article might be delt with at a time
likely
when the countries complete monopoly of foreign trade and
-. *.\. ;t;,'.: mbers of the Organization, might be present. I wonder,
Mr. Chairman, whether I should comment now on the amendment which
is listed in the document 198; page 12, or should I refer to it
later or .
CHAIRMAN (Interpretation): I would prefer that the
Czechoslovak delegation make their comments now on the text of their
amendment.
Mr. B.J. BAYER (Czechoslovakia): Mr. Chairman, we suggested
that, in connection with Articles 31 and 32, the following lines be
added: "If representations according to Article 35 are made in
respect of state trading operationst), the ember may withhold
confidential information, relating to its national security or which,
if disclosed, would materially damage the legitimate interests of the
enterprise concerned". As the delegates will remember , there is
nothing which has not been discussed in the course of the Sessions.
It was talked over in London, and first of all it was included in
Article 31. It was during the conference of the Drafting Committee
in New York that it was decided to transfer it from Article 31
to Article 35, and finally it did not remain fully in Article 35.
I can only say we feel very strongly about its inclusion. - 37 - E/PC/T/A/PV/17
CHAIRMAN: I call upon the delegate for New Zealand.
Mr. L.C.WEBB (New Zealand): Before I state the case for our
amendment, I would like to refer to the suggestion of the United
States delegation that Article 33 be suppressed. We opposed that
suggestion but not because Article 33 is one on which we have chosen
to 'hang our hats'. Our chief delegate, Mr. Nash, referred to this
matter in a speech which he made before the Executive Session, and I
can only say that our view is that this Charter should make it
perfectly explicit and not merely inferential, that a country which
maintains a complete State trading monopoly is a country which may
enter the International Trade Organisation.
As to our own amendment, it is obviously the most important
amendment which the New Zealand delegation has to propose at this
Conference. Before his departure, Mr. Nush explained in general
the nature of our problem and the nature of our economy, and the
sort of accommodation we desired in the Charter. I wish toadd some
words to that.
In its present form the Draft Charter has in our view serious gaps,
At the one extreme it provides for a system called liberal trade,
and at the other extreme it provides for a complete monopoly of foreign
trade. In between it provides for nothing. There is no provision
in the Charter for a country like New Zealand-which desires to plan
its trade according to its own desire,-to establish a complete State
monopoly. We have been told the reason for that is that controls
are of their nature restrictive, and that of all controls the quanti-
tative restriction is the most restrictive. There are two answers
to that proposition. If this is true, we ought to be consistent and
shut out a country which maintains a complete monopoly of its foreign
trade, because there is quantitative restriction operating in its most
extreme and complete form. L . - 38 - E/PC/T/A/PV/ l7
The main argument that the proposition is inherently restrictive
is not true; it is merely an analysis of cause and affect.
Quantitative restriction came in during the economic depression of
the thirties and was the result and not the cause of that depression.
Furthermore, this Charter not only admits, but says that control can
be used for the expansion of world trade. The whole of the Chapter
on International Commodity Agreements is a Chapter providing for the
expansionist use of controls, or, at any rate, it contemplates the
expansionist use of controls. In particular, it contemplates the
expansion and use of the method of quantitative regulation.
We believe, and our belief is supported in Chapter IIIof this
Charter, that the volume of world trade does not depend primarily on
whether tariffs are high or low, or on the method by which States
organise their trade. It depends on whether the peoples of the world
want to buy goods and can buy them. In the language of the Charter
it is "effective demand which determines the volume of world trade",
and if there is a collapse of effective demand then the abolition of
trade barriers, as they are called, will have no effect whatsoever.
The key Article in this Charter is, after all; Article 4, paragraph
1 of which says: "Each Member shall take action designed to achieve
and maintain full and productive employment and high and stable levels
of effective demand within its own jurisdiction through measures
appropriate to its political, economic and social institutions."
I want to call particular detention to the method by which the
Charter enjoins us to maintain effective demand. In Article 3,
paragraph 2, we agreed that the maintenance of effective demand must
depend primarily on domestic measures and later we say that those
measures should be appropriate - indeed, we say they must be appropriate-
to the political, economic and social institutions of the Members con-
oerned. L.
- 39 -
E/PC/T/A/PV/17
This seems to me to mean,and I think it should mean, that Members
pledge themselves to attempt to reach certain objectives, and are left
free to carry out their pledges by the methods suited to their
particular circumstances and internal organisation, provided these
measures do not injure the interest of other Members. That seems to
me to be sensible and to support a statement made by Mr. Wilcox which
has been discussed before at these meetings, the statement that the
I.T.C.does not impinge upon the sovereignty of Member States.
But when we come to examine the practical effect of the Charter,
we find that in the case of certain economies - and our own economy
is an example - the liberalism of Chapter III as to methods is com-
pletely contradioted. A country which sets out to achieve high
levels of effective demand and full employment by planning its trade
is told that it must abandon that system or not join the international
Trade Orinisation. Yet we are told that the International Trade
Organisation has no powers which impinge upon the sovereignty of the
Member States. Now there can only be one valid reason for the
Charter's absolute rejection of quantitative regulation as a normal
instrument of economic policy. That reason could only be that when
a. country uses that method, they are in fact using a method which
makes it impossible for them to achieve the objectives of the
Charter. - 40 -
Then, if anyone is prepared to maintain that point, we would
ask to be judged by results. New Zealand was practiging and
preaching the theory of full employment and high levels of
effective demand before this Charter was even a project. We have
gone further in the application of that theory, we believe, and we
have learnt more about the practical problems which are involved
in carrying out that theory than most countries which are represented
here. I do not say that as a matter of. self congratulation, it
merely happens that very often a small country has much better
opportunities for carrying out social experiments than large-
countries. Controls are, on the whole, easier to administer, and
the effects easier to observe. I would say that as far as the
commitments of the Charter concerning effective demand and full
employment, which I think most of us recognise to be the critical
commitments in the Charter, are concerned, we know, Mr. Chairman,
that we can carry out those objectives.
If we turn to the other main objective of the Charter, which is
the promotion of international trade, then I have only one thing to
say:- In proportion to our size, we are the worlds best trader.
In setting out the objectives of this Charter, we have rightly placed
first the achievement of higher standards of living, full employment
and conditions of social and economic progress, and we feel
entitled to say that our type of economy is already making a
contribution to the realization of those objectives, and it seems
to us that it is going to be a very strange and, indeed, a
devestating irony if this Charter is going to be so framed as to
exclude us.
Now, it has been suggested, Mr. Chairman, that we are being
a little difficult in forcing this issue in this particular way.
We have been told that if we would look at the escape clauses we would find that, in fact, we are accommodated, and in particular we
have been invited to look at the balance-of-payments provisions in
Artical 26. Now, we have looked very carefully at Article 26 and
we have come to the conclusion that this is not our approach, We
have rejected that approach because it does not seem particularly
honest or in the best interests of the International Trade
Organization. The balance-of-payments provisions do not
accommodate, I think, except by subterfuge, an economy of our type,
and on that point I would refer to the London Draft on page 12,
where the objectives of Article 26 are quite clearly set out.
Mr. Chairman, we desire to come into the International Trade
Organization by the front door, We do not desire to climb in
by a back window which is sometimes rather insecurely locked. That
is why we put our amendment where it logically belongs, into that
part of the Charter which provides for the type of economy whose
trade is completely in the hands of the state, and in seeking a
place for ourselves there, we have kept in mind, as we believe the
idea that has very often been enunciated here - that in this
Charter we must have a balance of obligations.
This amendment would impose on economies which control their
foreign trade completely, the obligation to expand this trade in
accordance with the purposes of the Charter, and what we, mean by
that is made clearer in the later clauses. Briefly speaking,
states who wish to avail on the selves the provisions of this
amendment must pledge themselves to make available for imports in
any given period the whole of the balance of the current proceeds
of their external trade, after making due allowance for what are
called invisible . We provide further that there must be
consultation with the Organization is to the period. We have said
that we would be willing to take a period of a year, but we think E/PC/T/A/PV/17 r/,i
V . - 42 - /=wI lf S~vr .V
that it would be, persaps, oiger to spdciWy aome lunEer perio%. e;
have alsolagreed that there shou.d be consultation with the
Organization in order to determine wha is a reasonable level. of
monetary reserves. Finally,gahere is a provision a63inst
disorimination and the sources of uaply of imports, cand. Llso a
reqcirementitgat LMembers oontrollln6 the r foreign trade should. have
due regard for Mhe interests of other Yembers. paragraph 2(b)
makcs clear tgat a Member oonsiderin6 it self adversely affected by
the operation of these controlA inctee terms of this ,rtiOlo can
avail itself of the very adequatedremedies which are lait down in
Artiole 35.
Now, Mr. Chairman, we regard hese obligations - and. particularly
2( a)ii) (U)
an ose in paragraph 2t id sub-par-meaphs -d of our a mndment
as being weigWey obligations. ;. theng that they ;are woijhtier
than most of the obligations which are imposed in other parts of
1his Charaer, We thigk th;t they are weiihtier than the
obligations imposed. on countries which, through their persistently
favomrable blanee-of-payients, are creation difficulties for world
traded in general.
5e believe, also, that an exoansion in the use 1f controls,
such as is cmantmmplated in ouc axndrent ineconjunotion with tho
other obligations asIImed under Chaptyter tiI, can be a ve
powerful factor in the expansion of world trade.
I.T G E/PC/T/A/PV/l7.
Now it has been objected that the provisions which we
seek to insert in the Charter are capable of misuse and will
open a way for other Members to escape from the obligations
which they have assumed.
Now I do not believe that is true. But I will confine
myself for the moment to one observation.
This Charter is not a set of iron-clad rules. There are
escape clauses all though it, there is not a single general
rule which has not a string of escape clauses attached to it;
and any State which joins the Organisation in bad faith will
if it wants to find a way of evading its obligations, If the
Organisation does succeed, it will not be because it can compeI
Members to obey the rules of the Charter. It will be because
the great majority of the Members realise that by carrying out
their obligations they are, in fact, promoting their own best
interests. I would say this in conclusion. We have come
deliberately, and as a result of experience, to the conclusion
that the objectives which have been written into this Charter.
which have been also for years the objectives of our own national
policy - that is, full employment, high levels of effective
demand and economic development - seem to us to require some
degree of State planning of economic activity.
Now I do not presume, Mr. Chairman, that this Conference
would consider writing into the Charter a complete veto on all
forms of economic planning. If we did that we would make
ourselves absurd, because we would be doing something which runs
clean counter to the whole trend of economic development
throughout the world; but I suggest to this Conference
that we are doing something even more absurd, or in
danger of doing something, even more absurd, than writing in a G E/PC/T/A/PV/17
-44-
complete ban on economic planning.
We seem to say in this Charter - we do say in this Charter
as now drafted - that it is permissible to plan your economy as
long as you stop short of planning your external trade, and
I believe, Mr. Chairman, that that is an absurdity which ought
not to be tolerated, and will not be tolerated.
Thank you. ER
Mr. B.J. BAYER (Czechoslovakia): Mr. Chairman, in the course
of the immediately preceding meetings of this Commission, we already
had the opportunity to explain in broad details the objectives we
are having in mind, while looking for a solution of the problems
contained in the whole Section E of Chapter V. We did not want to
hide the fact that the way we shall be able to solve them is of
great importance to us as we have to consider them fundamental for
our economy.
In our mind, the constructive work of the Preparatory Committee
can be seen in the common aim of all of us to achieve a universal
draft of a Charter, a document which would have full regard to
various economic structures, problems and systems of all countries.
There is, therefore, the general intention of all of us to make the
Charter a perfectly balanced document, a document which would
harmonise the various interests of the members and thus make it
acceptable to all of them. We think that this is the only way to
create such an instrument for the conduct of the world trade in the
future which we all desire to have. It seems to us, therefore,
quite clear that the Charter should be such as to enable all states,
whatever their political, economic and social structure might be, to
co-operate peacefully and, through the expansion of foreign trade as
well as through the other means contained in the Charter, attain the
purposes -which, as we all know, are stability in world economy, high
and still rising levels of living and full employment of inhabitants.
Having this in mind, we think that the Charter should neither
impose excessive burdens upon any country and thus force it to
fundamental charges in its economic or social structure, nor bring
about unjust advantages to other countries. It is for this main
underlying idea of the Charter, that we consider the amendment made - 46 -
by the delegation of New Zealand a very good contribution towards
the improvement of the Charter with regard to the aim we have
already mentioned, and which is to create a well-balanced document,
fair to everybody and liable to survive for years to come. We think
that this amendment deserves that a special attention be given to it
when all its aspects, in full details, will be discussed in the
particular Sub-Committee.
While dealing with this amendment in the particular Sub-Committee,
the Czechoslovak delegation will be glad to give all the necessary
explanation with regard to its own views on the merits of the New
Zealand amendment.
Mr. JOHN W. EVANS (United States): Mr. Chairman, the Brazilian
delegate has mentioned the reason for choosing this particular part
of the Charter for the introduction of their amendment. I confess
that I am still puzzled as to the precise effect of the proposed
amendment in this place. It clearly does not relate directly to
state trading, but I gather it has been placed in Section E because
of the certain analogy between the countries which completely control
their trade and a similar control which could be exercised by
countries which carry out all of their commerce through state
enterprise. I think, though, that our understanding of the proposed
amendment would be improved if it were considered in connection, not
the
with/state trading section, but rather with the quantitative
restriction portion of the Charter to which it seems to be more
closely related. If I have understood the amendment correctly, its
intention seems to be to set up a complete exception in the case of
a country which completely controls its trade to the provisions
relating to quantitative restrictions - an exception which would not
be parallel like the other, with any similar exception for a country
E/PC/T/A/PV/17 ER
E/PC/T/A/PV/17
which only controls part of its trade through quantitative
restriction. Perhaps I have misunderstood the intention of the
amendment, and if I have I should like very much to have a further
explanation from the Brazilian delegate. Assuming that I am right,
however, it seems to lead to a very serious difficulty. It seems
to me that it vitally effects the entire balance of the Charter as
it has been drawn to date. Mr. Webb, I think, with considerable
eloquence, has pointed out that it may be that the greatest value
of the Charter lies in the influence that it will have over members,
and in the fundamental desire of the members to go on co-operating
with each other, rather than in the specific obligations laid down
in the Charter. - 48 -
L . . E/PC/T/A/PV/ 17
That certainly is a reasonable approach. There are one or t wo
approaches which necessarily had to be considered when the first
draft of the Charter was prepared. One approach was to include
in the Charter various specific obligations; the second approach
was the one chosen for better or for worse - I believe for
better . But it is quite clear that if at this stage of the game
we decide to depend simply upon the general desire of Members not
to injure other Members in their trade, instead of to specific
obligations in the Chapter, we have very radically altered the basis
on which the Charter has been drafted up to this time.
In this connection. I am sure most of us will remember the
address given by Mr.Wileox very recently before this Commission,
when he considered the Paper which had been submitted by the Belgiun
delegate concerning the progress of the Conference and the develop-
ment which had taken place in the Charter. During that debate Mr.
Wilcox said a great many amendments has been submitted; some of
them were fairly important to the countries submitting them, but did
not fundamentally destroy the structure of the Charter. On some
it was a question of compremise; he added,"there are, I believe,
certain amendments which if passed would destroy the whole adifise
we have sought to construct and against these we must stand like
a wall of stone, "
In saying that the New Zealand amendment is the sort of amend-
ment Mr. Wilcox was speaking of, I feel I ought to make it clear that
when I criticise an amendment because of its possible result, I am
not criticising the motives of the country which is submitting their
amendment. I say that because I feel the Netherlands delegate mis-
understood an earlier remark of mine. I am sure it isnot the
intention of the New Zealand delegate to destroy the structure of
the Charter; I am sure they have as much desire we have to make
the Charter work, but I to think it is necessary to analyse the
effect. L.
- 49 -
E/PC/T/A/PV/17
I find it hard to escape the conclusion that the exception which
I gather New Zealand would take to the quantitative restrictive
Articles of the Charter, would make possible a complete development
of the protection of all domestic industries, with the only restraint
on that development resting in the will of the country which con-
trols its trade. A comparable provision to cover countries who do
not completely control their trade, would, it seems to me, be an
exception which would leave theprovis ions of Article 15 on internal
regulations, Article 24 on negotiation of tariffs, -. Articles25,
26 and 27 on quantitative restrictions, and Article 30 on subsidies -
would leave the interpretation of those obligations clearly up to
the Member who had undertaken the obligation, and in fact would
relieve him of any obligation whatever under those Articles unless
he should decide that they injured the interests of other Members
of the Organisation.
I have no intention of carrying on the analysis indefinitely, but
it seems clear that there is set up here a complete exception to the
specific obligations of the Charter, an exception which does not
exist anywhere in the Charter for any of the other Members. The only
logical situation if we accept it, would be to strike out all of the
Chapters in the Charter with the exception of Chapter VIII and
possibly Article 35, and simply establish the Organisation to do what
it could in the future for the stimulation of world trade. That is
an approach which is not acceptable to the United States.
I sympathise with the delegation of New Zealand when it feels
that the Charter should be written in such a way as to permit New
Zealand to be a Member of the Organisation. I sincerely hope that
we have drafted such a Charter. The United States delegation will
certainly consider very sympathetically any specific proposals to
correct any difficulty in the draft of the Charter which makes
that impossible, but we still feel the Charter must be drafted in such
a way that the United States could become a Member, and I do not
believe that would be possible if the amendment were accepted. J. E/PC/T/A/PV/17
CHAIRMAN (Interpretation): Before oontinuing, I would like
to know whioh delegates wish to speak today, because if there are
many, it is obvious that we will have to provide for an extra
meeting tomorrow.
Seeing that there at least five speakers plus Mr.Webb, who
will obviously want to answer them, it will be necessary to hold
a meeting tomorrow.
I will however give the floor to one more speaker now, namely,
Dr. Holloway. G. - 51 - E/PC/T/A/PV/17
CHAIRMAN : The Delegate of South Africa.
Mr. HOLLOWAY (South Africa): I think I must join issue
immediately with the representative of the United States when he
says that the New Zealand Delegation's Amendment would tend to
destroy the whole structure of the Charter as drafted .
Maybe the Charter as drafted seeks to cover too wide a
field, but as it stands the New Zealand Amendment is a good
deal less drastic than is the Article 33 that we have now.
So we may be trying to cover too big a field. We admit that
a country may protect its industries, but it must protect
them on the principle of non-discrimination. Non-discrimina-
tion is the main purpose of the Charter. At the same time we
do not want to exclude any important trading countries on the
ground of their own political philosophy.
Now it may be that they cannot be brought under the same
cover as non-discrimination, because non- discrimination postu-
lates whet I may perhaps call in a special sense, the rule of lae.
Other countries are toId beforehand exactly where they
stand and what they can rely on, and when you have an
authoritarian system which depends on planning - on giving
preference to certain things - very naturally there cannot be
non-discrimination, because the very element of the thing is
discrimination.
But I contend that the Charter as drafted tries to get
something, of both concepts in by compromising between the
two: by saying, in effect, " We shall not push the principle
of non-discrimination to its logical conclusion, which will
throw out authoritarian systems, but we will try to get as
much as we can of both systems, so as to keep one unity in - 52 -
world trade by following the principle that where non-
discrimination cannot be fully applied we shall seek some other
limitation. We shall seek some other limitation on the
countries which cannot give us the full benefit of non-
discrimination" .
Now when you get to applying that, first of all, complete
non-discrimination, then subsidies - where you have to put on
certain limitations, certain conditions under which subsidies
may be applied - when you come to State trading, mixed up with
other things you lay down certain rules there. When you come to
quantitative restriction you lay down certain rules. In all
those cases you find some way of limiting the method in which
those things can be used.
Now the proposal of the New Zealand Delegation no doubt
as Mr. Evans has said goes a bit beyond all those. Those rules
which I have laid down there cannot be applied except with the
goodwill of the country applying the New Zealand system; but
it still lays down a limitation.
The country itself would be limited to the conditions which
are given in the New Zealand Amendment, conditions which make
it possible for other countries to test, as a matter of fact,
whether that country is, although it is applying discrimination,
doing as much as it ca-n to improve international trade; and
when it does that inside the limit left over it can still apply
non-discrimination.
That goes a good deal less for article 33 as it stands
here. Now it is true that the United States Delegation has
proposed the elimination of Article 33; but the elimination of
Article 33 has been suggested by the U.S. Delegation on the
grounds that article 32 can be so drafted as to cover Article 33,
E/PC/T/A/PV/17. G -53 - E/PC/T/A/PV/17
not because they are in disagreement with the idea, but you
must still try and make it possible for all trading countries
to play ball in this game that we are trying to play.
In Article 33 the country can do what it likes. It has
a complete State monopoly of its foreign trade, it can apply
discriminations and quantitative restrictions - there is very
little that the Organization can say to it except that it can
say, "You must do a certain amount of trade".
The other Members are not protected nearly to the sane
extent as the New Zealand proposal proposes to give them
protection.
In Article 33 as it stands now, whereas under the New
Zealand Amendment there are certain objectives, if we apply
the rule throughout that there is a limitation of the freedom
to use any particular device, which is the idea that has been
followed throughout the Charter, in order to make all
countries come in, the New Zealand proposal seems to me to
be much nearer the main objective than 33 as it stands. And
it has this further advantage, that comparatively few countries
can apply it except by going very much further. It requires
a fairly simply economy with the export trade limited to
a comparatively small number of Articles, otherwise it breaks
down - otherwise control it not enough. You have got to go in
for a complete monopoly, like you do in a completely
authoritarian system.
Thank you, Sir. - 54-
CHAIRMAN (Interpretation): Gentlemen, we shall
adjourn our discussion until tomorrow at 2.30 p.m. The
first speakers on my list are the representatives of Canada,
Australia, and the United Kingdom; but before we adjourn
the Meeting I have two announcements to make. Commission A
(that is, our Commission) will convene on Saturday morning
in order to examine the Report on Technical Articles.
Commission B will convene on Monday, 30th June, at 2,30 p.m,
to examine the Report of the sub-Committee on Chapter VII.
This means a simultaneous Meeting with Commission A, which
will examine on the same day Articles 25 and 26. For this
decision, gentlemen, I need your approval. It is deplorable
that both Commissions must sit simultaneously. However, this
cannot be avoided, since the experts on Chapter VII must leave
Geneva for Paris on 31st June in order to attend the Rubber
Conference. Do you agree, gentlemen? (Agreed).
The Meeting stands adjourned.
The Meeting rose at 6.40 p.m.
E/PC/T/A/PV/17
V. |
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